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Downturn 2.0?; Inside the Muslim Brotherhood; Interview With Nathan Myhrvold

Aired June 5, 2011 - 10:00   ET


FAREED ZAKARIA, HOST: This is GPS, THE GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

We've got a wonderful show for you today. First up, fears of a double dip, debt wars in the U.S. and in Europe, and much more. A debate between two great economists, Jeffrey Sachs and Kenneth Rogoff.

Then, everyone is worried about an Islamic takeover in Egypt, about the imposition of Sharia and Islamic caliphate. Well, we got to one of the leaders of the Muslim Brotherhood to ask what would they do if they did win the elections?

Next up, Germany and Switzerland are shutting down their nuclear plants. So what is the future of nuclear energy? I'll talk to brilliant inventor Nathan Myhrvold about that and about why America finds itself losing this race to innovate.

We'll do a lot more on innovation tonight at 8:00 P.M. Eastern and Pacific in a special report with "Time" magazine called "Restoring The American Dream - How To Innovate." Set your alarms, your DVRs, maybe even your VCRs. Come to think of it, if you have a VCR, you're not being very innovative these days.

Anyway, here is my take. All the talk these days in the United States and in Europe is about deficit and debt. In Washington, the battle over America's debt ceiling continues. But let me tell you about the real crisis we face in America, and Europe has its own version of this, a crisis that could cripple America's economy and its society and would make the debt problem much, much worse. It is America's jobs crisis.

The number of Americans who are unemployed has roughly doubled since the financial crisis and recession hit, and though that number is declining, it is doing so very slowly. Most new jobs are for part- time work, at wages that average $19,000. That is half the median income.

The official unemployment number does not include the millions who have stopped looking for work or are working part time. So, if you add these numbers together, the actual number of Americans without a real full-time job is closer to 24 million.

Everyone is expecting that the normal pattern of growth and job creation will start up soon, except that it hasn't. Two years into the recovery, growth is stuck at about two percent and job creation has reached 250,000 a month, which might sound high but is actually barely enough to keep pace with all the new workers entering the job market for the first time. If unemployment doesn't drop a great deal fast - and it shows no signs of doing this - problems proliferate in all directions.

The most significant impact is on the lives of the unemployed. Studies show that after a few years of not working, people lose their talents, their skills, the work habits that make it possible for them to work productively and to be productive citizens. They risk becoming a lost generation, lost to their country, their communities, their families.

The new normal of slower growth and lower job creation also means lower tax revenues, more unemployment and health benefits to be paid out, therefore, a much larger deficit.

President Obama's budget assumes that the economy will create 20 million jobs over the next 10 years. That will be a dramatic acceleration. Over the past 10 years, it has produced only 1.7 million.

Congressman Paul Ryan's plan envisions unemployment dropping to 50-year lows to make his budget numbers work. That would require magic at this point. If you assume unemployment stays high, the deficit and debt become unimaginably higher in 10 years.

So, what to do? Well, there are several things we could do to spur job creation. I wrote about them last week in "Time" magazine. You can find them on But, briefly, create a regulatory and tax climate that helps small businesses since they create most of the new jobs, revive manufacturing by focusing on research, technical training and apprenticeship, help growth industries like entertainment and tourism to expand and, perhaps most urgently, rebuild America's dilapidated infrastructure and put millions of people in the construction and housing industries back to work.

The crucial point here is that if you care about America's economy, including and centrally including the deficit, you need to get people back to work, being productive, spending money and paying taxes. And we need to do this fast.

Let's get started.


ZAKARIA: It was a week of almost all bad economic news - bad housing data, bad job numbers, bad news from Europe, and bad days for the financial markets. The battle over the debt ceiling continues, as does the deadlock over deficit reduction.

So, what to make of it all?

On my left, and the left, I suppose, is Columbia University's Jeffrey Sachs. On the other side of the table, and I suppose the political spectrum, Harvard University's Ken Rogoff. Welcome, gentlemen.

UNIDENTIFIED MALE: Thank you (ph).

ZAKARIA: So Jeff, when you look at these job numbers, if you do the - the math, we're creating about 250,000 jobs a quarter. That barely takes into account the new entrance to the labor market. I think - I did a back of the envelope calculation, it will be 12 years before we get to seven percent unemployment.

JEFFREY SACHS, COLUMBIA UNIVERSITY: Of course, there is a lot of uncertainty right now, but I think what is clear is the economy is dragging, the unemployment is - is high and likely to remain so for the foreseeable future. And, of course, the headline unemployment number hides a lot of suffering of people that have withdrawn from the labor market or are working only short hours because they have to.

So, this economy is - it's still sick. It is not showing dynamism, and we have some very serious problems ahead, without a functional Washington.

ZAKARIA: Now, what do you do about this problem of unemployment? Because if the unemployment numbers don't go down, Ken, the reality is that even the deficit projections are all off in the sense that they assume - I mean, the president's budget assumes that we'll create 20 million jobs over the next 10 years. Paul Ryan's budget assumes that we're going on to an unemployment rate we haven't seen in 45 years.

If - if you put today's unemployment rate into those budget projections, the deficit is, you know, 50 percent bigger.

KENNETH ROGOFF, HARVARD UNIVERSITY: Yes, but I don't think having the government solve everything is the answer. That's not what -

ZAKARIA: So what is the answer? How do you - I mean, all I'm saying is if the unemployment numbers don't go down, the deficit goes up substantially.

ROGOFF: It's going to go up if we don't grow faster. That's a key -


ROGOFF: -- to how well we do. I mean, I'm cautiously optimistic that over the medium term we will start to grow faster. Very, very hard to know how soon. We have a lot of debt hanging out in the economy.

I actually think that's the major headwind at the moment. Public debt, private debt are just piling it on, piling it on. Instead of talking about a bad year, we could be talking about a bad decade.

ZAKARIA: But what's the evidence that the public debt is the headwind when we are able to borrow more cheaply now than we were - that we've ever been able to, I mean, in history? ROGOFF: Well, I mean, there's a lot of evidence, looking at historical data on public debt and growth, that when you start getting up into the territory, we are, at some point, it hits you. You may not have a crisis like they're having in Europe, but you have to do something quicker than you'd like, raise taxes, cut spending, and that slows growth.

So, it's sort of pay now or pay later. I'd like to smooth it out.

ZAKARIA: So, what should we do about Europe? Because Europe is an interesting case where they face these problems, and probably in Europe they have no option. They had to cut some spending because the deficit was ballooning. They weren't able to - Greece wasn't able to borrow money.

But now, the rescue package that has been provided for Greece does not - does not seem large enough. German officials are talking about maybe let the Greeks restructure. On the other hand, there are other European officials who say, no, no, no, this will be another Lehman Brothers. It will - it will cause a run on all European banks.

What's the right answer?

SACHS: The problem in the very southern debt tier periphery countries, especially Greece, is that they have a lot of debt now, and in order to pay that debt, they would have to make great austerity measures, which are socially disrupt - very disruptive and very, very large.

Greece is kind of a borderline, because the burden of this debt, more than 100 percent of national income, means that the interest payments each year, several percent of GNP, is - really gets them. So, on the one hand it's no small thing to pay this debt off, or even to service it. On the other hand, simply defaulting could be, you know, devastating for the Greek economy and could have very big repercussions.

I've been in the view that they should take the austerity measures, they should try to pay the debt that they haven't yet demonstrated, yes or no, whether it's possible -

ZAKARIA: Don't let Greece default, in other words? That would -

SACHS: That has been my view.

ZAKARIA: Would you agree with that?

ROGOFF: I don't. I mean, first I want to say, they're still getting money. They're not paying net interest. They're getting more money than they're having to pay back, so it really hasn't been tested what they're willing to do. I just think -

SACHS: But the budget cuts are real.

ROGOFF: The budget cuts are real, but a lot of them are projected -


ZAKARIA: Do you think that - that it's just inevitable that they (INAUDIBLE), they can't pay back these?

ROGOFF: Well, you can never say can't with a country because so much of it's about politics and willingness to pay. But I can say that if you look at what they owe foreigners and what they owe domestically, it's at a scale where it's very, very rare to dig your way out, unless you grow like China. If they grow like China, it's going to be great. They'll have a lot of income, but their fault (ph).

ZAKARIA: Do you think you can - you can avoid a crisis? In other words, do you see some way of muddling through? Would - this has been the European approach so far, because they don't want another potential Lehman Brothers.

SACHS: I've been involved in many, many debt restructuring circumstances, but usually the countries end up in a - or not end up, they're already in a very, very deep mess and even after the restructuring it takes some time to get out of. So, I'm weary of it, for all the reasons you're saying.

I can't guarantee that there is a way out. I just wouldn't rush into it, and even though austerity's painful, these are developed economies. These are not people living at the edge of extreme poverty. These are countries that can do better and should do better.

And all of it is very, very tough. There's no question about it. But the muddling through at this moment, I think, is actually still the best - very imperfect, but the best way forward.

ZAKARIA: I got to ask you. I think I know what Jeff feels on this (INAUDIBLE) finally. Republicans and the debt ceiling. Does it make sense to play - to play with this? Does it make sense to play a game of brinksmanship on the debt ceiling issue?

ROGOFF: I'm not very happy about it. I mean, I understand in politics, you know, there are no holds barred. You have to do what you can to exercise power to get your way, but it seems like a very unattractive way to run things. Mind you, the Democrats have voted against the debt ceiling, you know, when they were in the other position.

It sort of telescopes all decisions into this one big day where you make all these decisions, and I don't think we're really coming out with smart decisions at the end. We need tax reform, not just tax hikes. We don't just need spending cuts, there are areas we need spending increases. We need to rethink the government in a positive way.

We are in trouble if we take 15 years to figure this out. We're not Greece, but, you know what? In 15 years like this, we will be.

And we can have growth. We can do things better, but I don't see it happening.

ZAKARIA: On that note, Ken Rogoff, Jeff Sachs, thank you very much.

We will be right back.



ZAKARIA: You know that many people think of the Muslim Brotherhood as believes in political Islam or violence or extremism or jihad. What do you say to people like that?



ZAKARIA: When you hear people talk about the dangers of political Islam, wittingly or not they're thinking of the Muslim Brotherhood, This is the largest organized political movement in Egypt, probably the most important Islamic political party in the world.

It was founded in 1928, with its slogan, "Islam is the solution." It promises to make the Koran and its teachings the sole reference point for ordering the life of the Muslim family, individual, community and state.

It has officially been against violence, but has had breakaway groups and members who have advocated and practiced jihad. It has been banned as a political party in Egypt for decades, a ban that was lifted only this year in the wake of Egypt's democratic revolution.

But even if it is nonviolent, how would it impose its religious views on Egypt? Is Islam compatible with democracy?

When I was in Cairo recently, I sat down with one of the Muslim Brotherhood's senior leaders who also serves as the group's spokesman, Essam el-Erian. He is generally regarded as the moderate face of the Brotherhood, and many Egyptian seculars and liberals told me that they were worried that this was the message that the Brotherhood wanted to get out publicly, but that it might harbor more radical intentions privately.

We'll follow that carefully, but, for now, a rare opportunity to hear from the Brotherhood itself.


ZAKARIA: Dr. el-Erian, thank you for joining us.


ZAKARIA: You are the face of the Muslim Brotherhood. You are the spokesman. You are very senior in the organization. So let's start by just introducing you today to my viewers. What do you do?

EL-ERIAN: I'm a physician, earning my life from hematologist and as laboratory man.

ZAKARIA: So, you're a hematologist?

EL-ERIAN: Yes, I am - I'm still hematologist and lab.

ZAKARIA: And yet you are a senior figure in the Muslim Brotherhood, and the Brotherhood has been band for many, many years, until recently, of course. Did you spend any time in jail?

EL-ERIAN: I spent about seven years, 10 months in jail. I was charged by managing and affiliating to Muslim Brotherhood, which was an outlawed organization.

ZAKARIA: So, it was just the fact that you belonged to the Muslim Brotherhood, and that you managed -

EL-ERIAN: Only. No charges of any activities except political, social and educational activities.

ZAKARIA: Now, you know that many people in the Western world, particularly, think of the Muslim Brotherhood as an organization that is - believes in political Islam or violence or extremism or jihad. What do you say to people like that?

EL-ERIAN: I say to them, you must go to Islam itself to understand Islam. Islam is Islam, and I think Islam is a very peaceful religion. It's the way of life. It is cooperating with all others, respecting all religions, respecting humanity, respecting peace and prosperity, working for peace in the world.

ZAKARIA: What did you think of the - of the assassination of Osama Bin Laden?

EL-ERIAN: We as Muslim Brotherhood condemn violence from any side. We were waiting for a trial for Osama Bin Laden because we want to know a trust (ph) about everything which was directed, charged by Osama Bin Laden himself. And also, we are against any intervention, mainly by force, by violence, which violates sovereignty of any country, especially Pakistan.

And we asked in our statement, after killing Osama Bin Laden, that it is a time to withdraw troops from Afghanistan, after destroying the country, and also from Iraq. Mr. Obama promised his voters, not us, that he is going to end such war, which was killing more than who killed in 11th September. There maybe now millions were killed.

ZAKARIA: Do you think terrorism is ever justified?

EL-ERIAN: Nobody can justify terrorism at all. Killing innocent people is condemned in all religions, in any law.

ZAKARIA: Do you believe that a woman is worth half a man? Because the Sharia says a woman's testimony counts as half, a woman would inherit half as much as a man, a man can divorce a woman but a woman cannot divorce a man.

EL-ERIAN: But Sharia also said woman is equal to man. And these cases you mentioned must be explained and understood in the whole context of the Sharia. Women, in some cases, inherit more than men, and women in such cases - in some cases may have equal to the man. And, in such - in many - in some cases, can have half of the men. It depends of every case.

ZAKARIA: One of the questions that lots of people have - and this is not just Westerners. This is Egyptians who tell me, ask him, what does he want to do? What does the Muslim Brotherhood want to do if they do a chief power, if they get power in Egypt? What is their vision for Egypt?

And so, what would you change? Would you like to see stricter interpretation of Sharia? Would you like to see women given subordinate right - rule - roles? What is it that your vision is?

EL-ERIAN: I would like those Egyptian people to ask me face to face, not via media. And we are -

ZAKARIA: You can't talk to 18 million Egyptians, so I'm -


EL-ERIAN: We can - we could - not all Egyptians watch CNN. But they are facing (ph) us everywhere.

And, first of all, I'm not going to catch power in Egypt.

ZAKARIA: But what would you try to - what would you change about Egypt today?

EL-ERIAN: We are going to have independent democratic civil country. This is our main goal now. And I think this is gaining a very national consensus between all Egyptians. The people are the main source of authority. The only source of authority is the people themselves.

ZAKARIA: So, would you support a - the kind of civil law that Egypt has now rather than a religious law?

EL-ERIAN: In Islam, you don't have a religious law. In Islam, you have the civil law. Civil law means that the people have decision in their parliament after keeping in mind the visions of Sharia, a reference (ph) of Islam -

ZAKARIA: Would non-Muslims have the same right as Muslims?

EL-ERIAN: Non-Muslims, even infidels in an Islamic state or civil state but with a background of reference of Islam Sharia have equal rights and equal duties.

ZAKARIA: The kind of program you're presenting sounds very moderate, sounds very modern. Why do you think people are still so suspicious? And I say, again, in Egypt, lots of people tell me their intentions are not fully democratic.

EL-ERIAN: Because the people are facing the unknown. Unknown is democracy, not Muslim Brotherhood. Unknown is state of law, not Muslim Brotherhood. The whole chance now, it is the first time for them to have the power by themselves, and to elect a parliament by themselves and to - to appoint a president by themselves. This is the first time for both since two centuries.

So they are facing unknown, suspicious not towards us only. It is towards everything.

ZAKARIA: What is the action you want to see from President Obama?

EL-ERIAN: We ask, stop supporting dictatorships, stop neglecting the Palestinian rights, stop the war on terrorism which damage the Islamic world and, unfortunately, he never done so.

ZAKARIA: Essam el-Erian, thank you very much.

EL-ERIAN: Thank you.

ZAKARIA: And we will be back.



BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We must stand with those who want to build Pakistan.

HILLARY CLINTON, U.S. SECRETARY OF STATE: Providing this assistance is not only the right thing to do, but we believe it is essential to global security and the security of the United States.



ZAKARIA: Now for a story that will get you thinking and might even make you rethink some firmly-held views.

First, some facts. Since 9/11, a decade ago, Washington has given the government of Pakistan more than $20 billion in aid. Two- thirds of that has gone to the military to fight the war on terror. The other third, about $6 billion, has gone for development of Pakistan's civilian economy and society.

The theory behind many of those billions of dollars is that by bringing Pakistan's poorest out of poverty and despair, fewer young men will be seduced by radical Islam.


SEN. JOHN KERRY (D), MASSACHUSETTS: They rely on assistance in order to be able to wage this fight with us.

OBAMA: We must stand with those who want to build Pakistan.

CLINTON: Providing this assistance is not only the right thing to do, but we believe it is essential to global security and the security of the United States.


ZAKARIA: An admirable approach for sure. It's a strategy the U.S. uses all over the world, from Baghdad to Bali and back.

But what if you discover that aid money does not necessarily make Pakistanis less likely to turn to terror? What if you learn that there's actually no correlation between being poor and supporting Islamic extremism?

Well, that's what a new serious academic study seems to prove. It's a robust survey by four academics from Princeton, Georgetown and the University of Pennsylvania that conducted extensive field research in Pakistan, interviewing 6,000 people across a broad spectrum of income groups and geography, and their findings could challenge the way we approach fighting terror, not just in Pakistan but around the world.

First, they find that in general Pakistanis don't like militant groups. Not just al Qaeda, but the other ones like the Pakistani or Afghan Taliban. Second, contrary to conventional wisdom, poor Pakistanis dislike militant groups more than the middle classes. Third, the people who hate militants the most are the urban poor, probably because more than any other group they're the ones who are impacted by terror attacks - bombs in subways or cafes or whatever.

It's an interesting conclusion. The people we've long considered the likeliest candidates for extremism are actually the ones most against it. The study points out that this goes against most of the existing policy literature on the subject. It cites both the U.S. State Department and the U.K.'s Department for International Development as saying poverty motivates people to extreme violence.

Now, giving aid to poor people is good in and of itself. But if we've been doing that to prevent them from becoming Islamic fundamentalists, then this study suggests we've been aiming at the wrong target. Perhaps our focus should be on the middle classes or on secular education.

Research shows that members of the IRA in Northern Ireland or Hezbollah militant ring are more likely to come from economically advantaged families and with a relatively high level of schooling.

These are important issues for Washington to consider. Who doesn't want to give economic aid to? What exactly is the best way to create a climate less conducive to extremism? Those are long-term issues.

For now, what I want to say in the short term is, let's at least focus on accountability for this aid - for both hard and soft aid. We need to demand results. What is the money achieving?

A CNN poll from last week shows that nearly half of all Americans think all aid to Pakistan should be stopped. Another quarter thinks it should be reduced. It seems like 10 years and $20 billion later, the American people understand basic lessons in accounting, that Washington has been learning the hard way. Pentagon documents now show that we are rejecting nearly half of Islamabad's claims for expenses over the last two years.

But the more important question is, will the Pakistani military in return for all this money, finally move against the terror organizations like the Haqqani Network and Lashkar-e-Taiba that they claim to be willing to battle? It's long delayed, but it is the right message that we should be sending. American purse strings are important and necessary from Afghanistan to Zimbabwe, but they don't have to remain open at all costs.

And we will be right back.



NATHAN MYHRVOLD, FORMER CHIEF TECH OFFICER, MICROSOFT: The world has little over 400 nuclear plants right now. There are people who predict China will build 400 just in China within the course of the next 30 years.




ZAKARIA: Last Monday, German Chancellor Angela Merkel made a rather stunning announcement that her nation's nuclear power program would be phased out entirely by 2022. Remember, Germany gets almost a quarter of its power from nuclear energy today. Germany's neighbor, Switzerland, has said its own power grids would be nuclear-free by 2032.

Both decisions can be traced directly back to the nuclear meltdowns in Japan following the earthquake and tsunami in March. Is this rational? That's what I wanted to get to the bottom of.

So, I've asked one of the most brilliant minds I know, who is trying to create a safer nuclear power plant with new technology, Nathan Myhrvold.

Myhrvold's story is amazing. He had a PhD by 23. He studied Physics under Stephen Hawking. He was Chief Technology Officer at Microsoft. He's also a paleontologist who has discovered nine T- Rex's. He is a master chef and his company holds 30,000 patents. All in a day's work, right?

Welcome back to the program, Nathan. MYHRVOLD: Great to be here.

ZAKARIA: When you saw what was happening in Japan, what was your reaction?

MYHRVOLD: Well, I think the first thing to understand, this is a slide rule-era plant designed in the 1960s and designed with a bunch of design decisions that you just have to question. As was typical of plants of that era, it's unsafe if the electricity every goes off. You needed to pump coolant through the plant at all times. You should never have the electricity off.

So the strategy was to say, final, let's have some diesel generators as backup. And to put the diesel generator essentially at sea level in an area that gets tsunamis. The problem is that the - the water from the tsunami flooded the diesel generators. And at that point, they were pretty much screwed.

But things got worse sort of from that point onward. The response to the disaster, you know, in Washington that we say the cover-up is worse than - than the crime. Well, in a disaster, the disaster response or lack thereof can be worse than the disaster itself, and that's what happened in this case.

ZAKARIA: But, with all that said, what I'm struck by is, not one person has died as a result of the nuclear power plant's failings. One person died because a crane hit - hit that person. What does that tell you?

MYHRVOLD: Well, you know, it shows how concerned people are about nuclear technology. That you have - no one knows fully yet, 10,000, 15,000 people die in the tsunami? Essentially no one dies because of the radioactivity?

Yet, from the coverage, you'd think the radioactivity was the primary issue. The fact is, living near the sea shore in Japan is dangerous. And with probability one, there will be a tsunami.

Now, in this case the plant was not designed very well for that. They never should have had those generators as low as they did. Today's plants aren't designed that way at all. A typical modern generation plant doesn't rely on electricity. Our plant is designed to even a level above that. Literally, if you just cool - shut the coolant off, the plant's fine. And unless you sucked all the air away from - from that, in which case we would probably have bigger problems.

ZAKARIA: What about people who say the problem with nuclear power is not so much it's dangerous, it's really expensive that commercially it really isn't justified. The only way it works is because of massive government subsidies.

MYHRVOLD: Well, nuclear is really expensive in this country and in Europe. In part because of the way that the relatively undisciplined way that we've built them in the past.

ZAKARIA: What does that mean?

MYHRVOLD: Well, most plants were built one-off separate different each plant. It was like every home was an absolute custom home where nothing had been done quite the same way before.

ZAKARIA: So - so you don't have the economies of scale that you get from -

MYHRVOLD: Exactly.

ZAKARIA: -- having a single - a kind of template that is then -

MYHRVOLD: You know, in China, the - all of the indications are that they are building nuclear plants for the same price or cheaper than coal plants.

ZAKARIA: Wow. So, your technology, why is it a real step forward?

MYHRVOLD: So - you know, I think the first thing you have to do is say, what energy problem are we trying to solve? And in my view, the energy problem for the 21st century is this - how do we get developed world per capita energy to every citizen of earth?

If you look at the developing world, if you look at China and India and Brazil - and the whole world wants our per capita energy level. So that means we're talking about a energy pie that's maybe a factor of 10 bigger than we're talking about today. Now, that's a very different problem.

ZAKARIA: Your nuclear technology tries to solve the problem that says, with the growth of the emerging markets, you're going to need to consume massively more energy than you're consuming now and this is why this - this works.

MYHRVOLD: That's right. That's right. So, as an example, the world has a little over 400 nuclear plants right now. There are people who predict China will build 400 just in China within the course of the next 30 years. I mean, doubling the - the total just in that one country.

So, to do this, you need to have an energy technology that scales. We also have the - the possibility that we can burn nuclear waste as fuel. So, we can take spent fuel rods from other reactors or we can take the depleted uranium waste that comes from separating fuel and we can burn that as fuel.

Now, that's an amazing thing, because that would allow us to run the whole U.S. economy for more than 100 years just on stuff we've already dug up and is costing taxpayers money guarding it as dangerous nuclear waste.

ZAKARIA: And how close are you to actually being able to build a power - build a plant using your technology?

MYHRVOLD: So, we're in the process of doing a plant design. But then there's all the technical and regulatory issues, because the plant has to be built somewhere. It has to be in someone's backyard. And if everyone is on not in my backyard mode, you're kind of stuck.

Because of the Fukushima situation, this has not been the best six months to be out there trying to convince people to build a new nuclear technology. Fortunately, there's parts of the world that realize that there is this energy crisis coming. And that's mostly what we're talking.

ZAKARIA: We're going to come back and talk more with Nathan Myhrvold. When we come back, we're going to talk about the challenges from China, from South Korea to American innovation.



AUSTAN GOOLSBEE, CHIEF ECONOMIST, PRESIDENT'S ECONOMIC ADVISORY BOARD: -- been working. We have been adding jobs significantly over the course of this year. We faced a stiff headwind and this was - this was a tough month, but I don't think that we should abandon the idea that what we need to do now is get the private sector stood up.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: You can see my entire interview with Goolsbee at noon Eastern on "STATE OF THE UNION".

More violence amid the transfer of power in Yemen. Military officials and witnesses say gunmen have attacked the presidential palace in the country's second largest city. It comes a day after President Ali Abdullah Saleh left the country for medical treatment in Saudi Arabia. Yemen's vice president is now the acting head of state.

A very tense situation to like - today along the Syrian/Golan Heights border. Syrian TV is reporting that six pro-Palestinian protesters were killed and dozens wounded by Israeli troops as they tried to cross into the Golan Heights. The protests are marking the anniversary of the 1967 Six Day War.

Those are your top stories.

Up next, more FAREED ZAKARIA GPS and then "RELIABLE SOURCES" at the top of the hour.



ZAKARIA: And we are back with Nathan Myhrvold, former Chief Technology Officer with Microsoft and polymath inventor.

One of the things you've talked about is when we talk about nuclear power, you keep talking about, well, the Chinese are doing this. The South Koreans are doing this. They're - they're actually doing better than we are in many - in many areas. How worried are you that the United States is no longer going to be the place that invents the future?

MYHRVOLD: I'm very worried. You know, current course and speed, we're very good at inventing, but we're also undermining our ability to do that in lots of ways. In the case of nuclear, we decided as a nation to stop building nuclear plants 30 years ago. Pretty hard to have good innovation on new plants if you stop building them.

ZAKARIA: And what about in other technologies?

MYHRVOLD: So, you know, the trouble is when you get successful, it's easy to get fat, dumb and happy and lazy about things. And, unfortunately, as a nation, we often tended to do that.

China recently announced that it's going on a big policy push to have - file more patents and have the strongest patent system and the largest number of patents in the world. While they're getting serious, we tend to fiddle while Rome burns.

ZAKARIA: Do you worry about funding for basic research and science if you look at the - ?

MYHRVOLD: Absolutely. It's - you know, a lot of the prosperity that the United States got in the tech sector was due to fundamental investments that DARPA and other government agencies made through the '60s, '70s and '80s. They're not making the same kinds of investments now.

In part, say, hey, the industry is there, industry will take care of it, but industry can take care of a class of things. Really basic fundamental needs still have to come from the government.

You know, one that's striking me historically is the United States became the world's inventor at a stage when we were a developing country. OK? The 19th Century, America primarily an agricultural nation, starting to move into heavy industry.

But even by 1850, we had invented things like the telegraph, the cotton gin. You know, Thomas Edison came and invented tons of other things. We became the world's inventor and we were the equivalent of the Brazil today. And if you think about that, that's a very remarkable transition.

So we've got the spirit. We have the ability to do it. You just got to make sure the government and policies and other things don't get in the way of it. And if we can manage to - to not get lazy, I think we can play a very important role as the world's inventors for a long time to come.

The combination of innovation and change and thoughtfulness and risk taking, that's been unique here. It wouldn't be unique forever and we can't be cavalier about that.

ZAKARIA: Nathan Myhrvold, pleasure to have you on.

MYHRVOLD: Thank you. ZAKARIA: If you find this stuff as fascinating and important as I do, you wouldn't want to miss a special edition of GPS tonight at 8:00 P.M. Eastern and Pacific. It's the next installment of our "Restoring the American Dream" Special and this one is called "How to Innovate."

We called upon some of the greatest minds in innovation today to talk about how to solve the rather dire situation Nathan Myhrvold just talked about. We'll also show you amazing recent innovations. Don't miss it tonight at 8:00 P.M. Eastern and Pacific.

And we'll be right back.




ZAKARIA: Our question this week from the "GPS Challenge" is - to conserve power after the recent nuclear meltdown, what are Japanese authorities asking their reluctant citizenry to do? A, dress casually; B, shower communally; C, sleep outdoors; D, turn off all gadgets.

Stay tuned and we'll tell you the correct answer. Make sure you go to for 10 more questions. While you're there, make sure you check out our website, the Global Public Square, where you'll find smart interviews and takes by some of our favorite experts. You can also follow me on Facebook and on Twitter.

Now, I hope you will indulge me. This week's "Book of the Week" is my book, "The Post American World." It is out in a special 2.0 edition. The original version was published more than three years ago and since then we have had the global financial crisis and President Obama's election, so I have updated it to try to take into account these rather large phenomenon. Now, whether you read the original or not, I'm sure you'll get a lot out of the new version.

Now, for "The Last Look." You remember on President Obama's recent visit to Europe, his car hit a bump on its way out from the U.S. Embassy in Dublin. A minor blip for the vehicle, we've come to know as the Beast. Well, it turns out that the car ran afoul of another hurdle - London's infamous congestion charge. Cars that travel in the city center are charged for that privilege. Turns out President Obama has to pay, too. About $16 for the Beast and the same amount for each and every car in his motorcade.

It also turns out this charge is a bit of a sticking point. London's Lord Mayor Boris Johnson is said to have told the president at the state dinner at Buckingham Palace that the U.S. government owes him nearly $9 million in congestion charge fines. The U.S. Embassy in London disputes that. It says the charges are a type of tax and by law, diplomatic missions are exempt from taxes. London contests this.

Is anyone exempt from these charges? Actually, yes, the Pope, at least sort of. Johnson says the Pope Mobile was not slapped with the tax during last year's Papal Visit to London because all the roads were closed for the day. Sounds strange to me.

The correct answer to our "GPS Challenge" question was, A, the traditionally buttoned up office workers of Japan are being asked to dress casually this summer. No ties, no jackets, so companies can turn down the air conditioning. The effort is called "Super Cool Biz," quite a slogan.

Go to our website for more. Don't forget, tonight at 8:00 P.M. Eastern and Pacific, a special edition of GPS "Restoring the American Dream: How to Innovate." Don't miss it.

Thanks to all of you for being part of my program. I will see you next week. Stay tuned for "RELIABLE SOURCES."