tv Fareed Zakaria GPS CNN January 3, 2016 7:00am-8:01am PST
eastern only on cnn, and tomorrow on "new day," donald trump, he's going to be chris cuomo's guest. you want to watch that 7:00 a.m. eastern, and then at 4:00 p.m. eastern jake tapper sits down with dr. ben carson to talk about his campaign shake-up. that's all for us. thank you so much for spending why your sunday with me and everyone here. i'm dana bash. fareed zakaria gps starts right now. this is "gps" the global public square. welcome to all of new the united states and around the world. happy new year. i'm fareed zakaria coming to you live from new york. we will spend much of the hour talking about the year ahead and what it might bring. in the battle against isis and the struggle to find new homes for refugees, in the american presidential race and its swirling controversies, in the
west, chilly relations with russia. in the united states and the world's economies, china, india, africa, much more. also, do you need a little nudge to pay your taxes? a push to not spend all your money? a little help being honest? well, the u.s. government is here to help. is that good news or is it big brother? we will explore. and women waging peace. why the way to end much of the fighting, the battles, the skirmishes around the world may be the almost 50% of the population that has more interest in peace than war, women. but first, here is my take. 2016 will bring with it the usual share of surprises and new trends, but there is a striking piece of social science research unearthed last year that will
continue to shape the conversation next year and beyond. we've had one of its authors on the show recently, the 2015 nobel laureate in economics angus deeton authored a now famous paper with ann case. as you know, for decades people in rich runts have been living longer lives, but deeton and case fount that over the past 15 years one group, middle-aged whits in the united states, are dying in increasing numbers and things look much worse for those with a high school diploma or less. "the washington post" notes people who make up this cohort are largely responsible for donald trump's lead in the race for the republican nomination for president. now, there are concerns about the calculations, but even a leading critic of the paper has acknowledged that however measured, the change compared to other countries and other groups is huge.
the key question is why. why is middle america killing itself? exploring it provides answers that suggest that the anger shaping american politics will only get worse. the main causes of the increase are as striking as the fact itself, suicide, alcoholism, and overdoses of prescription and illegal drugs. as deeton told me here on "gps," people seem to be killing themselves slowly or quickly. these circumstances are usually caused by stress, depression, and despair. the only comparable spike in deaths in an industrialized country took place among russian males after the collapse of the soviet union when rates of alcoholism skyrocketed. a conventional explanation for this middle-class stress and anxiety is that globalization and technological change have placed increasing pressures on
the average worker in industrialized nations, but the trend is absent in any other western country. it is an exclusively american phenomenon, and the united states is actually relatively insulated from the pressures of globalization having a vast self-contained internal market. trade, for example, makes up only 23% of the u.s. economy compared with 71% in germany. part of the answer, deeton believes, is that in the united states, doctors and drug companies are far too eager to deal with physical and psychological pain by prescribing drugs, including powerful and addictive opioids. but why don't we see the trend among other american ethnic groups? while mortality rates for middle-aged whites have stayed plat for risen, the rates for hispanics and blacks have continued to decline significantly. these groups live in the same country and face greater economic pressures than whites.
why are they not in similar despair? the answer might lie in expectations. princeton anthropologist cheryl lynn rouse suggested in an e-mail exchange that other groups might not expect their income, standard of living, and social status are destined to steadily improve. they don't have the same confidence that if they work hard, they will surely get ahead. in fact, rouse said that after hundreds of years of sheriff ray, segregation, and racism, blacks have developed ways to cope with disappointment and the unfairness of life through family, art, protest speech, and above all religion. the hispanic and immigrant experiences in the united states are different, of course, but minorities by definition are on the margins. they do not assume that the system is set up for them. the united states is going through a great power shift. working-class whites don't think of themselves as an elite group,
but in a sense they have been compared with blacks, hispanics, native americans, and most immigrants. they were central to america's economy, its society, indeed, it's very identity. they are the world of the greatest generation, but the world has changed. the economy has changed. america has changed. donald trump is talking to this demographic when he promises that he will take charge and make them win again, but he can't. no one can. and deep down they know it. for more, go to cnn.com/fareed and read my "washington post" column this week, and let's get started. so how in the world would the wild story of the 2016
presidential campaign end? will trump or clinton be the next leader of the free world or somebody else entirely? will isis be defeated in 2016? the iraqi p.m. says his forces will do just that in the coming year. also events in the last due days suggest tensions between iran and saudi arabia will ratchet up in 2016. will that cold war become a hot one? and speaking of cold wars, what of the u.s./russian relation, will they further sour or improve over syria. emery slaughter, she and richard hass are former directors of policy planning at the state department. he is, of course, now the president of the council on foreign relations. and ian bremer is the president of the eurasia group, an international risk consultancy. richard, let me ask you, the big trend it seems to me, certainly, you know, one of the dominant trends, i would argue maybe ends up being the big trend of 2016
is going to be the continued weakness of oil prices, the collapse of commodity prices, and what this does in the world. i mean, the last time you had such a dramatic decline of oil, the soviet union collapsed and the cold war ended. what's going to happen this time? >> well, first thing to say is it's likely to endure for the year. the one exception, and you mentioned it in the introduction, could be major instability involving saudi arabia. we'll get back to that later i expect. assuming it does last, it obviously is an uneven effect. it hurts the producers, the saudis, iranians, venezuelans and so forth. for other countries like india, it's a boon. it contributes to the economic growth. for a country like china it should help but it really doesn't because china has its own internal economic problems about adjusting its economic model. blessing.d states it's a mixed on one hand, it's probably a bonus of $1,000 nearly to every american family. on the other hand, big parts of the country, which are dependent
on oil production and the smik spillovers are hurting. for the world it's a major down per. it's hurting africa, latin america. all things being equal, it's a major blanket on world economic growth and as a result it probably feeds into political uncertainty. >> and what, ann marie s that political uncertainly? what happens, for example? brazil could implode with the collapse of commodity prices. venezuela could implode, and then you have the middle east where iran needs high oil prices, iraq needs high oil prices, saudi arabia needs high oil prices. >> i'll start with the middle east and actually with an optimistic prediction because i think we are going to see a settlement of the syrian civil war this year. >> wow. >> we got a little opposition -- disagreement, but i really do think that russia and europe and the united states and the parties in the region will get a settlement, but i'm going to
predict that turkey is going to be a bigger obstacle to that settlement than russia because the only way to get a settlement is to have a fed rated syria where effectively the kurd have their region, the sunnis have their region, and others and for turkey that's going to be a huge problem. so we need the kurds, the united states needs the kurds and others do to defeat isis, but at the same time if you give the kurds too much autonomy, that's a huge problem but i'll start with that. >> this is fascinating. so the big problem in settling syria will not be iran, our enemy, but turkey, our ally. >> absolutely. because the turks really are caught here. if the kurds in syria get as autonomous, essentially a protoe state, then they have a proto state in iraq already and then in syria and erdo wan's relations with the kurds in turkey which started out well have now completely nose die ed and he's got a huge problem with the kurtsds finally close to having kurdistan which is what they always wanted. >> what do you think is going to
happen? >> there's no question that at the end of 2016 the trajectory of u.s./iranian relations will be better than the trajectory of u.s./saudi relations. iran will not be perceived as the biggest thorn in the region. in order to get syria resolved you have to have leadership, people that actually care, and you need to have the ability to coordinate. we lack in various capacities all three of those things. the americans still don't care enough, the europeans are still much more focused on their own individual and national problems, and in the region as we see very violently right now, the iranians and the saudis could not be farther from each other either in syria or anywhere else in the middle east. so while i agree that there's going to be more headway on a political process to talk about what a fed rated syria might be, the ability to actually execute and get the powers in the region to come to terms with each other, which would be required, we're going to be much farther away from that in 2016 than we are in 2015, and your issue on
oil prices being under pressure, that puts the middle eastern countries, all of these governments, under so much internal pressure, more likely to play nationalism, more likely to focus on their own intern yam security. none of those things bode well for peace in the region. >> richard, you said you thought the most underpriced risk in the world today is saudi arabia, meaning i presume that with this weakness of oil prices, worst saudi arabia to start having kind of instability, all bets are off. >> i agree. it's low oil prices. the saudis are basically doing what i would call their vietnam and what they're doing in yemen, major case of strategic overreach. you've got simmering or worse than simmering rivalries inside the saudi royal family. you've got structural problems inside saudi arabia. now the beheading of the sheikh, a prominent shia cleric. the reaction has poisoned what already was a terrible
relationship with iran. it's exacerbated the saudi position in bahrain. go on and on and on. but i have to tell you, fareed, i almost feel like we're seeing a fuse lit in the middle east, and i disagree with anne-marie about syria. i wish she was right, i'm afraid she's not. i keep use the metaphor of the 30 years war. i think we're seeing elements of, it and i think we're going to see isis possibly rolled back a little bit in iraq. i don't think they're going to be rolled back in syria, but they're going to, i believe, see saudi arabia as an extremely ripe target. so my guess is saudi arabia could become the next major battlefield of this larger play, so you could have the shia/sunni flikt and the persian/awsaudi conflict. >> can i just ask you, you can respond, we've got a minute, is russia going to be more looiike to do a deal in syria in your view because oil prices are going to pressure russia and will that affect ukraine? is russia going to be playing
nice? >> i do think russia is going to be playing nice but not just because of oil prices, but because russia can't handle casualties. as the casualties rise, putin really -- >> in syria. >> -- gets in trouble domestically. first in ukraine and he's made a deal and then in syria. i've been the one who has been the cassandra on syria for the last three years saying it's going to get worse, it's going to get worse. i've agreed it's like the 30 years war. two things that are different are refugees and isis. so europe, for instance, is now completely focused on getting a settlement because of the refugees, and everybody else is focused on isis and knows we have to solve syria to be able to fight isis. >> on that cheery note we'll come back with this great panel and we'll talk about the 2016 presidential race. ok, we're here. here's dad. mom. the twins. aunt alice... you didn't tell me aunt alice was coming. of course. don't forget grandpa. can the test drive be over now? maybe just head back to the dealership?
don't you want to meet my family? yep, totally. it's practically yours, but we still need your signature. the volkswagen sign then drive event. zero due at signing, zero down, zero deposit, and zero first months payment on a new jetta and other select models. i am a lot of things. i am his sunshine. i am his advocate. so i asked about adding once-daily namenda xr to his current treatment for moderate to severe alzheimer's. it works differently. when added to another alzheimer's treatment, it may improve overall function and cognition. and may slow the worsening of symptoms for a while. vo: namenda xr doesn't change how the disease progresses. it shouldn't be taken by anyone allergic to memantine, or who's had a bad reaction to namenda xr or its ingredients. before starting treatment, tell their doctor if they have, or ever had, a seizure disorder, difficulty passing urine, liver, kidney or bladder problems, and about medications they're taking. certain medications, changes in diet,
or medical conditions may affect the amount of namenda xr in the body and may increase side effects. the most common side effects are headache, diarrhea, and dizziness. he's always been my everything. now i am giving back. ask their doctor about once-daily namenda xr and learn about a free trial offer at namendaxr.com. it takes a lot of work... but i really love it.s. i'm on the move all day long... and sometimes, i just don't eat the way i should. so i drink boost® to get the nutrition that i'm missing. boost complete nutritional drink has 26 essential vitamins and minerals, including calcium and vitamin d to support strong bones and 10 grams of protein to help maintain muscle. all with a great taste. i don't plan on slowing down any time soon. look for savings on boost® in your sunday paper. spending the day with my niece. that make me smile. i don't use super poligrip for hold, because my dentures fit well. before those little pieces would get in between my dentures
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haass, and ian bremer for our predictions panel. who is the democratic nominee going to be, the republican nominee, and who is going to win? ian? >> not trump. i didn't believe it before, i don't believe it now. 2015 was the year of trump, i don't think we'll say that in 2016. his ability to channel media excitement is unprecedented in american history, but ultimately as you say in your "washington post" column, he's going after the losers, and historically in the united states losers don't vote, and there's no question that, you know, that the fact that they're being depressed, the fact that the middle class is eroding makes it more likely anger will rise to the top but not enough to get the nomination. ultimately these people can't just be angry, they can't just do ratings, they have to go to the poll. i don't think that's going to happen. it's either cruz or rubio on the republican side. i'm leaning a little more cruz than rubio but not much and on
the democratic side i don't see any challenge to hillary. >> and who wins? >> i think it's too far away. for me it's kind of a coin flip. i think there's so many mistakes to be made, so many scandals we still haven't heard about. hillary is very competent, more experienced, but also a really horrible candidate and we don't know who the republican side is going to be, and so for me it's a coin flip. >> anne-marie, you obviously want hillary clinton to. you work for her. >> personally as the head of my organization, i'm nonpartisan, but, yes, i think it's going to be clinton versus cruz. i think it will be clinton winning. i think the worst the world gets, the wmore people really d want someone who knows the names of these leaders, who projects competence if not excitement. i think a cruz/clinton election a good for the soft power. it's like the new "star wars"
versus the old. suddenly america's election is between a woman and a hispanic man and regardless of what you think of their specifics, what the world sees is a new america. >> what do you think? >> again, on the democratic side, likely to be hillary clinton, but if you look at the most recent fund-raising statistics for bernie sanders, how distributed it is, it suggests to me the democratic race could be longer and tougher than the conventional wisdom. i still think hillary clinton prevails. the word might be prevail rather than win easily. on the republican side i'm not known for my 340desty, fareed, i have been wrong more often in the last six months than i've ever been. obviously, i would say cruz, trump, rubio are the three most obvious but that leaves out bush, christie, and kasich. i think there's room for one of them. new hampshire has become the turning point in the republican -- >> you mean one non-trump. or you mean --
>> one moderate. >> one someone who is quote, unquote, centric. new hampshire has now become the place where it's all going to be determined, and there's probably two or three other tickets out of new hampshire to face up against cruz in south carolina and the other states. so i think it's probably rubio. i think it's probably trump, and i think it's one other, christie, bush, or kasich. >> and what happens in terms of, you know, looking at growth and america's prosperity. for all its problems the united states has really dominated the recovery since the great depression. somebody pointed out to me that the stock market under barack obama has compounded at 14% a year almost, which is -- it may be the longest, strongest bull market in history. i haven't double-checked it but certainly very, very strong. it can't quite go on. it's been six, seven years. you normally have a recession. china is in recession. europe is going nowhere.
the emerging markets that are oil producers are off a cliff. what happens to growth in 2016? >> well, i mean, i think that growth -- the imf just reduced their 2016 expectations for growth a couple ticks and that's not a surprise. and there's going to be a lot of fat tails geopolitically that will have market -- >> imploss in places like brazil or -- >> or saudi or whatnot. i think if you look at where economic growth is going to be in 2016, you have many larry summers and others saying recessions come every six to seven years on average. we're kind of increasingly due, but china is the big mover here. it's the most volatile, it's the most uncertain. it's also the country where the government has by far the most tools to kick the can down the road if they want to, and they do. they really want to forestall that instability. what you're going to see coming out of china is much more state
intervention if markets start looking softer, which means that globally we should actually expect that six to seven year average becomes longer but when recessions hit, they get much longer. >> we'll muddle along. 90 seconds each of you. what do you think on china and the world. >> i think that is the world the transpacific partnership will go through. and the reason is because, again, it's going to be seen in more of a security context than an economic context. isis helps there. china is maneuvering in the south china sea helps there. i think we're going to see that go through. i also think the dollar is just going to rise and rise and rise. china instability, the euro, who knows what's going to happen with the eurozone, so strong dollar and trade going through. >> 30 seconds. >> i think that's a better prediction than your syria prediction. i think we have a better chance on ttp. i think one piece of good news in the united states is speaker
ryan and the ability to get a budget through. 2015 ended on a positive note in the substance and appearance that the united states can at times function. and i thought that was an important reality and an important message to the world. >> amazing at the end of the day the united states always somehow muddles along and kind of looks better than everybody else even though, you know, we beat up on it all the time. thank you. fascinating panel. next on "gps," should the u.s. government be in the business of nudging its citizens using psychological tricks to get the american people to do what it wants? well, believe it or not, it is doing just that. is it big brother or good government? we'll explore.
now for our "what in the world" segment. corporate america has spent decades studying human psychology to get an edge in the marketplace, whether it's placing junk food at the grocery store checkout line or placing ads on tv at just the right time of day, but what if government could use similar strategies to improve how it operates? to help more students get into college, improve services for the military, or get more people to sign up for health insurance. in fact, the obama administration has a new group that's trying to do just that, the social and behavioral sciences team, a group of experts that's leveraging
psychology to make government work better. it's a variation of britain's behavioral insights team, the nudge unit, all inspired by new research in behavioral economics. the team which started in 2014 launched a series of trials over the last year or so to see what tricks of their trade might help uncle sam, and their results were released this past fall. most were successful by the group's count showing smart ways to improve government at little to no cost. for example, as the report points out, around 1 in 5 students in urban areas who are accepted to college don't actually end up going in the fall simply because they don't fill out the necessary paperwork. so the white house team had specially designed text message reminders sent to students and their parents. the message worked. according to the group's analysis, enrollment among the more low-income students increased by almost 9%. another way to persuade people to get something done experts
say is to show them a concrete set of steps to follow. e-mails using that approach to encourage the military to sign up for a workplace savings program nearly doubled the enrollment rate. another effective way to motivate people is to have them agree to a specific time to complete a task. messages using that strategy spiked enrollment in the federal health insurance marketplace over seven times as much as the e-mails that did not include a time frame. smart psychology can even improve our government's integrity. a signature box was added near the top of an online payment form that government contractors have to fill out to confirm the accuracy of their sales reports. that small tweak led to over 1.5 million additional dollars in self-reporting fees collected in a single quarter. these initiatives may be relatively small so far, but applying behavioral sciences to government has enormous
potential. psychology is relevant anytime americans do business with their government, notes mya schunker the white house agency's senior adviser. in september president obama signed an executive order encouraging agencies to get closer to the behavioral sciences research community and recruit experts to join their ranks. some were concerned that such government efforts to manipulate people's minds smack of george orwell's big brother. richard that i ler, the co-author of "nudge" and an expert on such practices agrees we should be wary of that possible, but as long as the nudging is transparent, easy to opt out of, and good for our welfare, he says, we should embrace it. using psychology to improve government is a smart and cheap idea, one that should easily get bipartisan support. now all we need is some psychological mechanism to nudge politicians to be less partisan in washington. next on "gps," as we learned in
the first half of the show, peace is in short supply around the world these days, so just what can we do to change that? well, how about bringing more women into the peace process? it works. my next guest will give you the evidence that it works. re watch, i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? ugh! heartburn! no one burns on my watch! try alka-seltzer heartburn reliefchews. they work fast and don't taste chalky. mmm...amazing. i have heartburn. alka-seltzer heartburn reliefchews. enjoy the relief.
the face, and the answer is half the world's population, women. sawny hunt was appointed ambassador to austria by president clinton in 1993. at the time the nearby balkans was ablaze. hunt was a key player in america's diplomatic efforts to find peace there. she hosted two rounds of negotiations at the embassy wondering why the parties were having such problems coming to the. then on a trip to washington, ambassador hunt had a revelation. i'll introduce you to hunt's colleagues in a moment, but she picks up that story right here. >> we go to the white house, and it's time for the signing, and in comes the presidents, and i turn around and i look in the auditorium and it is a sea of gray suits. now, the interesting thing is that i, who care a whole lot about the importance of women, i didn't see it. >> you didn't notice it until then. >> this is a failure story.
and i thought how on earth -- and it's because i was looking through a lens called security. i wasn't looking through gender, so i completely missed why these negotiations, these peace talks turned out to be really flawed, so i went to the u.n. for a meeting and i asked this u.n. official, why aren't there any women in the peace talks in these different countries in africa, and the u.n. official said to me, you know, master hunt, the warlords won't agree to have women, and i said, well, why not? and he said because they're worried the women will compromise. >> interesting. >> and a lightbulb went off in my head, and i discovered after gathering 100 women from ten conflict areas that, in fact, they told one story after another after another of how they were working across lines. >> in fact, it was true. the women would compromise. >> that's right. but the problem is we're so used to negotiations where let's bring together the killers and
they'll put the guns under the table and you can have the diamonds, you can have the oil, you can have the timber, and that's called a peace agreement put together by people who have no experience or even interest in having peace. so if you add more chairs, you have to have them around the table, add more chairs, have the women, have others in the community who wouldn't be allowed, and you get a different agreement that lasts. >> ambassador hunt brought to our studios two women who personify what she calls women waging peace. first i want you to meet allahm orrabib a canadian born woman of libyan heritage who is being trained as a medical doctor in libya in 2011. that's when the nation revolted against ma mar gadhafi's regime and then had to put itself back together. the only problem was women were not at the table. >> we noticed women saying,
listen, we've been systematically excluded. we're not being invited to the talks. our conversations are not being listened to. our opinions on priorities for the community. we say schools, they say no, it's the oil infrastructure. that was very, kre sler to us. we began to lobby on a national scale with our then-government and we started talking about the religious manipulation that was causing a lot of divisions and a lot of conflicts and i say manipulation -- >> explain that. so you look at the religious violence, the jihadi culture of all these fanatics, and you say this is not -- this is not a natural outgrow. this was being fomented and stoked and encouraged by some people. >> exactly, for their own gain. and i think it's the most interesting thing is when you talk to women, as early as 2011-2012 women were saying we're having more difficulty driving alone. i'm having difficulty sending my daughter to school. they want to segregate the
classes. they want women to dress in a specific way. women were recognizing these signs before the rest of the population even was. before they were weapons with these particular groups. what we found was by talking about that narrative, by saying, listen, this is not religion, this is a manipulation of faith -- >> and the reason you could say this is not religion is you noticed the gangs who were pushing this stuff were not particularly religious. >> not at all. not at all but they definitely benefited from it, and i compare it -- i always compare it to my medical career. when you're in a hospital and you're telling a family very bad news, you notice immediately people pray. even a nonpraying person finds god in the time of severe need, and the same thing happened in libya. in the time of the conflict, when you have nothing else to look at, when political apparatuses don't exist, when security is diminished around you, when you don't know if your baby will eat that night, the voice of god, whoever is telling you that's his voice becomes so much stronger and more important to you, and it's a very easy way to manipulate societies.
>> also joining us was esther ebanga nigerian poster who grounded a group called women without walls who tells the story of bringing women of two religions together to fight one common enemy. >> for the past two decades, our city has been embroiled in religious conflict. five years ago about 530 women were killed by religious fundamentalists in a village that's less than three kilometers from where i live. as a christian pastor, i just felt enough was enough. we've got to do something about this. i organized a march of christian women, about 100,000 came to the streets protesting against the killings and demanding for our government to bring the perpetrators to justice, and when we did our march, the
muslim women responded and say, hey, our people were killed as billion, which was true, so they had the muslim march, had a christian march, and the killings continued, and then together we led a march as both christian and muslim women demanding for the release of the girls. and since then we formed this coalition and the organization women without walls like you mentioned, and we're been working in all the volatile communities that are prone to violence and talking with the young people to sheath their swords and refuse to be used by politicians. we want to put pressure on the government, we want our voices to be heard, and we habiter want to hit the streets and say we're still advocating for the release of the girls and boko haram has to come to an end in nigeria. >> rwanda is a good story, a story of female empowerment that has been made a difference. >> 64% of the parliament is women, half the supreme court,
half the cabinet, and that's extraordinary. no one has ever seen a country that has leapfrogged as fast in terms of indicators in education, in health care, et cetera. absolutely there are problems. no question. there are political problems. there is all kinds of intrigue, but you know what? the corruption hardly exists, and women are considered less corrupt. in fact, huge difference when you have that many women. a country that has just 35% women in parliament has almost zero chance of falling back into violent conflict. >> thank you very much, all of you. >> thank you very much. >> next on "gps," the 2016 republican candidates don't agree on much, but here is something they are nearly universal on. the government needs to shrink and get out of the economy. but what would happen to the american economy if it did? my next guest, a distinguished
economist, says it would be catastrophic. when we come back. caring for someone with alzheimer's means i am a lot of things. i am his sunshine. i am his advocate. so i asked about adding once-daily namenda xr to his current treatment for moderate to severe alzheimer's. it works differently. when added to another alzheimer's treatment, it may improve overall function and cognition. and may slow the worsening of symptoms for a while. vo: namenda xr doesn't change how the disease progresses. it shouldn't be taken by anyone allergic to memantine, or who's had a bad reaction to namenda xr or its ingredients. before starting treatment, tell their doctor if they have, or ever had, a seizure disorder, difficulty passing urine, liver, kidney or bladder problems, and about medications they're taking.
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thank him for it, but my next guest, mariana says i should not be thanking steve jobs or even apple for it. she's the author of a book just out in the united states called "the entrepreneurial state: debunking the public versus private sector myths." she's a professor at the university of sussex. she joins me now. it's a fascinating book. would you say the technology i was referring to was not invented by apple. >> it's not that steve jobs wasn't a genius or apple is not a wonderful company. of course steve jobs was great. the problem is that the mare tiff we tell around both himself as an individual and the company completely misses this public intervention. so the story is basically that every technology that actually makes an iphone smart and not stupid was publicly funded. so the internet, gps, touch screen display, even siri, the voice activated system that never works for me, were all funded by different type of
public sector institutions in the u.s. where is that story? >> and you argue this is actually part of a pattern, that you can go into industry after industry and you'll often find that the basic -- some of the key basic innovations, much more than people realize, were publicly funded. >> absolutely. and what's really interesting is it wasn't just about the basic science. this intervention which was strategic, courageous, mission-oriented, and direct, not indirect through say tax incentives, occurred in the basic research, the applied research, and even the early stage financing for companies themselves because, let's be honest, most venture capitalists are very exit driven. they want that exit to happen in three or five years or the death valley phase for many of these innovative companies can last 10 to 15 years. >> and 9 government has the patience. >> absolutely. this is patient, long-term, committed fns. there's a myth that for example we have a credit crunch or not enough finance. there's plenty of finance, just not the right kind of finance for innovation.
>> you're turning on its head everything people think about government, which is government can't pick winners and losers, gets it all wrong. >> right. >> yet you're saying the historical record is saying the government actually has picked lots of winners. >> absolutely. all those technologies were picked, the biotechnology sector was picked. and again private companies, of course, were important but they basically surfed that wave and we've got plenty of surfers out there, just not that wave fo folk -- for example in the green tech. >> what about solyndra. >> for every success you have eight or nine failures. that's fine. what the private venture capital industry has had which the public investors have not is an ability to actually reap something from the upside to cover the downside, so tesla,
tesla s car received a similar amount of moneys a solyndra did. $465 million guaranteed loan. had tesla not been the success we know it is, that money would have been bailed out by the taxpayer. as they have to bail out sa lynn dra. the population doesn't realize this is what happened and they only see that solyndra lost. they only hear that story, but also we haven't been wise in terms of actually treating this like a portfolio. >> that's fascinating. you're saying two identical investments, one lost, one has gained massively, but we wrote off the one that lost. we didn't gain anything as taxpayers for the one that succeeded. >> exactly. >> israel, however, their government investments, they take a piece of the action, right? >> absolutely. so through their public venture capital fund they actually retain royaltieroyalties. they can get a bit of the upside to cover the inevitable
downside. in this country we think that means socialism. first of all, we do have all this government investment and where will the return come from? xhibss often think it will happen through tax. we know that many of these companies, including google, whose algorithm behind google was funded by the national science foundation don't pay much tax. does apple pay the tax they actually owe? does amazon? there's not just that though. tax rates themselves have fallen immensely. so nasa, people will be shocked to hear this, but nasa, the national space agency, was founded in a year that the top marginal rate was 93%. this was -- >> eisenhower. >> he was not a communist. now, the point is not to go back to that era. that's a by gone era. however, could we get a bit more real in terms of sometimes retaining equity. >> universities do this. >> for example, the money that's actually made -- well, you know, nasa for example is not allowed to make any money. they can only get money from the
budget appropriations committee. why? just look at the privatization of space today. so you have the elon musks of this world through spacex or richard branson through galaxy making use of this publicly funded infrastructure for free. why? that would be fine, by the way, if nasa didn't have another big project like going to mars but where will the money come from for the new missions. i always say if we don't want the state to get involved, fine, step back, but that would mean as you said before, throwing away your iphone and not having the teslas of this world, but if we want that kind of strategic intervention we really have to be asking where will the money come from. >> fascinating. thank you so much. >> thank you. >> next on "gps" we know literacy can improve lives but we'll tell but a book that could save lives. it's a real page-turner, when we come back. this is claira. to prove to you that aleve is the better choice for her she's agreed to give it up. that's today? we'll be with her all day to see how it goes. after the deliveries, i was ok. now the ciabatta is done and the pain is starting again.
>> fascinating. all these stops to take more pills can be a pain. can i get my aleve back? for my pain, i want my aleve. get all day minor arthritis pain relief with an easy open cap. spending the day with my niece. that make me smile. i don't use super poligrip for hold, because my dentures fit well. before those little pieces would get in between my dentures and my gum and it was uncomfortable. even well fitting dentures let in food particles. just a few dabs of super poligrip free thank you so much. so you're more comfortable and confident while you eat. so it's not about keeping my dentures in, it's about keeping the food particles out. try super poligrip free.
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the imf recently approved china's yuan as one of the world's reserve currencies. it brings me to my question of the week, other than china's how many currencies have been granted world reserve currency status? two? three? four? or five? stay tuned and we'll tell you the correct answer. this week's book of the week is "midnight at the par a palace: the birth of modern istanbul" by charles king. it's the terrific story of the slow collapse of the ottoman empire and the rise of modern istanbul. a story of politics, war, passion, sex. and now for the last look, which
is sort of another book recommendation. it's called the drinkable book. at first glance it looks like an average book with information about sanitation. but let's just say you wouldn't want to buy the kindle version of this book. you see the pages themselves are water filters containing silver th nan know particles that kill bacteria. tear out a filter, place it in a filter box and pour contaminated water through it. the result according to the book's developers is safe, clean drinking water, something the world health organization said 663 million people around the world still do not have access to. wat water-borne illnesses killing 1,000 children every day. the drinkable book is relatively inexpensive to produce and the pages are reusable. a page can filter 26 gallons of
water, so an entire book can provide a person with clean water for up to four years. up until now a small number of books have been made in the kitchen of a church in pittsburgh, but the book's inventor, dr. terry dankovich and her partners hope to scale up production to contribute books to many communities around the world. they hope to include cartoons and teach those who cannot read in the languages available about water safety. stephen king once wrote, books are a uniquely portable magic. well, this book certainly is. we toast to it and to more ideas like it in 2016. the correct answer to the "gps" question of the week is four. the yuan will join the u.s. dollar, the euro, the japanese yen, and the british pound in the basket of special drawing right currencies when its new status goes into effect october of this year. the imf said this was a, quote,
important milestone in the integration of the economize economy into the global financial system. thanks to all of you for being part of my program this week. i will see you next week, and happy new year. this is cnn breaking news. >> good morning. happy new year. i'm brian stelter and it's time for "reliable sources" you're weekly look of the story behind the story. and we have a lot planned this hour but let's start with breaking news out of oregon where an armed group which some are calling a militia have taken over the headquarters of a national wildlife refuge in rural eastern oregon. this is federal property managed by the u.s. fish and wildlife service, so this has a potential to become a big very, very combustible story. on twitter it has been a top trending hash tag all night and all morning. the hash tag being utesed a oregon under attack with some people laubling these men extremists and e