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Fareed Zakaria GPS

Can China Change Its Economic Course?; Assessing the U.S. Economy; Should College Football Be Banned?

Aired July 21, 2013 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

FAREED ZAKARIA, CNN 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.

You hear all the talk of paralysis and partisanship, but underneath all that clamor, is America back? For most of this year, markets have been going up, debt and deficits down and growth is steady.

So why are so many people still unemployed and what about the dangers to growth from abroad, from Europe, from China? I've got a great panel and they don't agree on much of this.

Also, American football starts in just two weeks and the celebrated thinker and writer Malcolm Gladwell has a controversial proposal. He says we should shut down college football, just end it across the country. Why? Because he says it is damaging students' brains.

Plus, one of the world's most popular presidents faces the end to his honeymoon. I'll explain.

Finally, how do you showcase the mood of an entire nation, especially when it's a nation of over 1 billion people? Here is one beautiful idea.

But, first, here my take: We are all going to watch over the next year or two one of history's great political experiments. It will test the proposition does authoritarian capitalism work?

For the past few decades, the Chinese economy's meteoric rise, faster than any large economy in human history, has dazzled the world. It has made many people wonder if China's model of a pro-growth dictatorship is the best path for developing countries.

Some have questioned whether Western democracies, with their dysfunctions and paralysis, can ever compete with China's long-range planning.

Now, as its growth slows to almost half its pace in 2007, its political system faces its most significant test.

Over three decades, China's growth has averaged 10 percent a year. Crucial to Beijing's success has been its ability not to pander to its people to gain votes or approval.

You see, unlike most developing nations, China spends little subsidizing current consumption, food and fuel subsidies for example. Instead, it spends massively on export-free zones, highways, rail systems and airports.

It is also investing in education and training and soon will turn to health care. No developing democracy has been able to ignore short-term political pressures and execute a disciplined growth strategy with such success.

But the Chinese model is no longer working that well. Partly, this is the product of success. China has become the world's second- largest economy; its per capita income is that of a middle-income country. It cannot grow at the pace it did when it was much poorer.

But growth has dropped faster and deeper than many had predicted and it could slow further because the truth is, China's authoritarian system has made significant mistakes in recent years.

When the financial crisis hit in 2007 and growth began to drop from a giddy 14?percent, Beijing responded with a huge expansion of credit and a massive stimulus program. As a percentage of gross domestic product, it was twice as large as the 2009 stimulus bill in America.

These two forces have created dangerous imbalances. To economists, the solution is obvious. Stop favoring state-owned behemoths and exporters, open up the economy, encourage the Chinese people to spend more money at home.

But all the subsidies to companies over the past decade have created entrenched industries and sectors that will resist any change. Can Beijing turn off the tap in the face of opposition from economically powerful groups, many of whom are politically well- connected, even related to members of its Politburo?

Now, to be fair, the above critique could have been made by China's new leaders. Li Keqiang, an economist who became premier in March, has given several surprisingly frank and critical speeches.

The reforms he outlines in detail would open important sectors of the economy to market, reduce the state's role and provide incentives for domestic consumption. The question is whether these goals can be met and whether the reforms will be implemented after opposition gathers, as it surely will.

Reform is hard in any country as can be seen from Italy to Brazil to India. Countries are very reluctant to impose short-term pain for long-term gain. China had been the exception to this rule, but now it faces its biggest test.

Success will suggest that there is still life in its unique brand of authoritarian capitalism and will extend the power of its ruling Communist Party. And if it fails, well, China becomes just another emerging market with a model that worked for a while. For more, go to cnn.com/fareed. There is a link to my column in the Washington Post this week. Let's get started.

When we look around the world, the emerging markets are slumping, Europe is stagnant, Japan is finally moving, but it could be another false start, the one place that does seem to be growing steadily is the United States of America. Why?

I've got a very smart panel who will tell me if that's true and, if not, explain everything. Glenn Hubbard was Mitt Romney's chief economic advisor. He is the dean of the business school at Columbia and the author of "Balance: The Economics of Great Powers from Ancient Rome to Modern America."

Rana Foroohar is Time's Assistant Managing Editor in charge of economics and business and CNN's Global Economic Analyst.

Ed Luce is the Washington columnist for the Financial Times and Zachary Karabell is the president of River Twice Research and writes "The Edgy Optimist" column for Reuters and The Atlantic.

All right, Zach, tell me, is this a story of kind of American resilience and bounce back?

ZACHARY KARABELL, PRESIDENT, RIVER TWICE RESEARCH AND WRITER, THE EDGY OPTIMIST, REUTERS, THE ATLANTIC: Well, first of all, it's a story of an economy that is essentially muddling through.

And in a world that four years go thought that it was going to implode, muddling through and having the space to kind of constructively think about future problems is not a bad thing.

It's not the economy that Americans dream should be their economy. It's not this world of endless prosperity opening up like a funnel going forward and that sense of limitations I think is kind of a cultural issue.

But we need to separate the cultural issue which is we don't have the economy we had 30 years ago, with the structural issue which is that we have a very stable system that has lots of flaws and problems.

But is certainly not going to implode, is likely modestly expand and should at least give us the space to deal with all these issues of health care and immigration reform and wealth inequalities.

ZAKARIA: And it shows you that the American private sector is really extraordinarily resilient. I mean it manages to adjust its balance sheet. It sheds -- you know, it sheds jobs when it needs to, it adjusts.

RANA FOROOHAR, ASSISTANT MANAGING EDITOR, ECONOMICS AND BUSINESS, TIME MAGAZINE AND GLOBAL ECONOMIC ANALYST, CNN: It does. You know, if you actually stripped out the government and the public sector, you would be closer to a 3 percent economy right now.

And the private sector numbers have been great. The last -- last month's job numbers were really stellar. That said, I think it's a really bifurcated recovery.

There are jobs at the top. There are a lot of jobs at the bottom. Eight out of the 10 fasting growing categories of jobs tend to be low-paying.

So, you do still have this problem in the middle and you're still, as Zachary says, in a rather sluggish recovery. This recovery has taken longer than any of the past three, any since the 90s and it's going to be 15 months more until we reach pre-crisis job creation.

ZAKARIA: Glenn, Bernanke addressed this issue of stripping government, you know, out of this. And for first time, I thought, was pretty clear that the government -- federal government's cutbacks, the sequester have been bad for the economy.

He said, if not for this -- if government spending were what at sort of what it should be, there might be a percent or maybe a percent-and-a-half more growth.

So he's saying, we're growing at 2 percent, we could be growing at 3.5 percent. It strikes me as a pretty tough critique of the Republican Party which has been insistent on all these cuts.

GLENN HUBBARD, AUTHOR AND DEAN OF THE BUSINESS SCHOOL, COLUMBIA UNVERSITY: Well, it is a tough critique and I think it's a fair one from Chairman Bernanke. We have a fiscal policy that's oriented toward near-term austerity, but not about solving long-term problems.

I think if you really probed what Ben was saying to the Congress, it was look at the long-term. Let's get things right. Don't be so obsessed about the near-term and Congress please act and stop asking me to do all the acting.

The economy's sluggish and we could be doing better.

ZAKARIA: Ed, you had a column in which you took this even one step further and said, "This whole obsession with debts and deficits that started with Simpson-Bowels might have been completely wrong."

That Simpson-Bowels -- I mean one way I read your column was to say if Simpson-Bowles had had their fantasy and their plan had been enacted, it would have been a terrible thing.

EDWARD LUCE, WASHINGTON COLUMNIST, FINANCIAL TIMES: Not necessarily I mean for the long-term. There is a long-term -- medium to long-term debt problem in the U.S. Don't get me wrong.

But the impact of short-term austerity here in the last 18 months, particularly this year with sequestration and with the expiring of the payroll tax cut, has -- I mean we're in danger of all agreeing here, but has slowed this recovery unnecessarily. It's taken a point off it.

And that, of course, has a deleterious impact on the deficit so it's self-defeating. KARABELL: I mean I would suggest that there's a degree to which some of that government cutting is actually a very productive thing done ineptly in that, you know, why we should have a defense spending geared towards to wars in a world where no one is even attempting to fight one conventional one.

So, there's some cutting that could be done there. And the fact, as Rana said, is so much of the U.S. economy is within the non- governmental sector much less than in Europe and that remains fairly vibrant.

So I think this may look optically bad i.e., it detracts from this thing called economic growth, GDP, but it may be structurally quite constructive.

FOROOHAR: I think what we need to see right now are two things. We need to see are private companies going to start investing more strongly and you're starting to see that in certain areas like shale gas, like the energy sector in American which is going to create a boom in manufacturing as well.

I think also housing is going to be very, very important because most Americans still keep most of their wealth in housing.

ZAKARIA: But is it going to go up?

FOROOHAR: Is it going to go up is the question. I think that the next couple of months you may see a little bit of a pullback as a result of mortgage rates going up.

But now that Bernanke has spoken ...

(CROSSTALK)

HUBBARD: Point here because in order to get investment, we really have to improve business confidence. There's plenty of profits. They're plenty of wealth to support higher investment.

What there's not is the confidence of business leaders and I think that requires this long-term move. I agree that the near-term deficit news is welcome and positive, but, frankly, the long-term news is still bad.

KARABELL: I think business confidence is one of the great canards that business leaders use as a way of saying this is why we're not spending. A few years ago, it was impasse in Washington that was why they're not spending.

The reality is I think there's less investment because businesses are making a lot of money and they're fully capable of making the kind of profits they're making without investing either heavily in infrastructure or in hiring.

FOROOHAR: I think that's a crucial point. The growth prospects of America's top companies are disconnected in some ways from America itself and that's very important to note. ZAKARIA: Because they can find demand around the world. They can ...

FOROOHAR: That's right. They're globally hedged.

HUBBARD: But U.S. demand could be improved, too. I think that's ...

FOROOHAR: It could.

HUBBARD: What business leaders are saying.

ZAKARIA: All right. We've got to take a break. There's lots more ahead.

Malcolm Gladwell is on the show today and he makes the case for something that might strike you as crazy, boycotting college football. It's a pretty compelling argument.

But, up next, more with our panel, we've talked about the U.S. economy. Now, we'll look at about how the rest of the world is doing and how it affects us here. Right back.

(COMMERCIAL BREAK)

ZAKARIA: And we are back with Glenn Hubbard, Rana Foroohar, Ed Luce and Zachary Karabell.

China, is the Chinese economy going to slow even more than it is and won't that have huge ripple effects? Zach, you used to run a China fund. Because it seems to me that China is basically the world's manufacturer and it is the world's exporter of commodities.

So, you take those two forces and you say you're going to suddenly slow those down. There's going to be much less importing of all these commodities around the world, bad for Brazil, bad for Australia and much less export of manufactured goods. What happens?

KARABELL: Well, first of all, some of that is absolutely happening and will happen, but it's also happening by intent and by design. It's not as if the model ran aground and suddenly the Chinese are going we're not making what we should be making and the system is falling apart.

This is a managed transition from an economy driven by exactly what you mentioned i.e., exports and manufacturing and infrastructure largely to an economy that's supposed to be grounded on the activity of billions upon -- well, 1.4 billion Chinese consumers.

And that transition is not going to happen as if you flip a switch and you're going to go from one economy to the next, but you have to assume that either it's going to implode, which a lot of people think, or that the technocratic leadership in China is, in fact, capable of managing that transition just as they managed the transition to the economy you mentioned. And while that may put pressure on various aspects of the world, look the reality is Brazil's got to find a sustaining model ex-selling iron ore to China, as does Australia, as does Canada, Peru, Chile.

And the Chinese need to have a self-sustaining domestic base of consumption in order to succeed long-term.

ZAKARIA: So, you're not as worried? You think they will manage this transition?

FOROOHAR: You know, I think it's the most important moment since the 1980s when they opened up markets. I was in China reporting recently and I was cautiously optimistic.

I would say two things strike me, the fact that they're not jumping in with a big stimulus plan right now is actually ironically a good sign because it means they're willing to take some short-term pain in order to make this transition.

There are also other things happening. There's reform of the migration system, more rights are being given to migrant workers. So, there are steps that say we are trying to get to a consumption economy.

ZAKARIA: What does your book tell you about China?

HUBBARD: Well, I'm much more nervous about China. The transition that's being managed would be much better in a "resilient economy" like we were talking about before the break, where individual financial institutions and entrepreneurs were managing it.

The history of governments managing difficult transitions like this is somewhat mixed and I think there's a real risk in the Chinese financial system.

(CROSSTALK)

LUCE: I think an important -- one important point to stress is Xi Jinping has been in -- president ...

ZAKARIA: A new president ...

LUCE: Since March, is just how much more dynamic figure he is than Hu Jintao, who he replaced. I've talked to a lot of Chinese who know him and the circle around him.

And it's very clear that they've diagnosed what the problem is. They know what needs to be done. He has 10 years in office. He knows he has 10 years in office.

This is one sort of process that works and is predictable in China is term limits. And he's got 10 years to turn -- to structurally transform this economy and that's a good place to start.

KARABELL: And the other thing that Xi needs to do which is very difficult is what you were saying that financial reform because one of things in order to create a domestic consumption economy is you have to give Chinese the ability to take their excess income and spend it on something other than real estate, stocks and Macau gambling.

(LAUGHING)

And that requires financial service reform, it requires banking reform, it requires dealing with (inaudible) interest.

ZAKARIA: Let me ask you about Europe. This is the dog that hasn't barked in a sense. Everyone has assumed Europe will collapse, the euro will fail, but somehow they sort of muddle along. Can they keep going?

HUBBARD: Well, they can keep muddling along, but look at the cost of it. The euro zone's in a recession, the labor markets are in shambles.

There's a failure to, again, like we were talking about in the United States, deal with long-term issues and an excessive focus on short-term fiscal issues.

I'm very worried about social ...

ZAKARIA: You're pretty anti-austerity both here and in Europe in the short-term.

HUBBARD: Well, it's -- what do you mean by austerity? I don't think the problem for either Europe or the United States is today's budget situation.

It's a glide-path toward a better budget situation and it says a lot about politics. The politicians are more willing to put the economy in a recession than to really tackle serious long-term problems.

ZAKARIA: That's a very important thing. So, they cut stuff now because to cut the big benefits, the pensions and health care stuff. That's much hard politically.

HUBBARD: That's politically much harder.

ZAKARIA: What about the politics of all this? What I'm struck by is if you had said to me five years ago, there's going to be 50 percent youth unemployment in Spain, probably some number close to that in Italy, 50 percent unemployment in -- you know, in some parts of Greece, you -- wouldn't you see the rise of massive protests, nationalist parties, socialists parties?

And, in fact, while there's been some of that, the real story in Europe is -- I mean there hasn't been that much sustained organized protests that is overturning political systems and ...

LUCE: There hasn't. There's been a sort of progression fragmentation of politics. You're seeing more and more coalition governments, weaker and weaker governments and the rise of antipolitics not just in Italy, but in France, Britain, in many places.

And that's worrying, but, yes, fascism, you know, I think that's sort of had its day and I don't think that's -- except in places like Greece, that's not really a significant force and I hope it remains that way.

ZAKARIA: Last word, Zach.

KARABELL: Europe is going to test this presumption of if you have shrinking population with sufficient affluence, why should you have growth, right?

And the whole model that we live in, the whole political model, the whole economic, is predicated on growth is normal and growth is good. Europe has huge issues and we've talked about all of them.

But it's also a stable, somewhat affluent society by any spectrum of human existence over history. So, the question raises for them what exactly should the model be going forward?

LUCE: Does Europe want to be a giant Europe, just a sort of tourist ...

(LAUGHTER)

(CROSSTALK)

LUCE: I think it still has more ambition than that.

ZAKARIA: A very nice place to visit. One of the world's ...

(LAUGHTER)

ZAKARIA: All right. Thank you all.

Lots more ahead on GPS. Would you be okay if your kids had to double their weight to play a sport that would then destroy their brains? Well, Malcolm Gladwell says we're doing that to other people's kids by supporting college football.

But, up next, What in the World. A world leader who has managed to get is opposition to support all his legislative moves. How did he do it? What can Washington learn? We'll be right back.

(COMMERCIAL BREAK)

ZAKARIA: Now, for our What in the World segment. Elected leaders around the world are struggling. They're down in the polls, their economies are stagnant, their people are protesting, and their oppositions are betting on their failure.

There is, however, one leader who has seemingly bucked that trend and it's not by jailing his opposition or shutting down the press. He's the president of a free, democratic, capitalist country.

Is this person Superman? I'm talking about the young and highly successful president of Mexico, Enrique Pena Nieto.

Just compare him with our president. Obama's approval ratings recently hit their lowest since 2011, 45 percent. Seven months into the job, Pena Nieto is sitting pretty at 57 percent.

And it's not just average Mexicans who have given their president an extended honeymoon, the opposition has, as well. Two major rival parties joined Pena Nieto to form what they called a "Pact for Mexico."

Together, they put through a groundbreaking set of reforms in education, telecoms, and TV. Just this week, the government announced an infrastructure deal worth $316 billion to build roads and railways.

Imagine that happening in Washington, where we spend months deciding whether or not we should have filibusters.

Drug-related homicides are down in Mexico 18 percent during Pena Nieto's term. This week, local authorities brought down the leader of the deadly Zeta cartel.

It's been an extraordinary start to a presidency and it comes at a time when experts are hailing Mexico's rise. The New York Times columnist Tom Friedman says that Mexico could be one of the 21st century's big economic successes.

Of course on this show, we have been championing Mexico's prospects for the last two years, but signs emerging that perhaps Pena Nieto's honeymoon is coming to an end. Let me explain.

It all goes back to that "Pact for Mexico" I mentioned earlier, a cross-party alliance to push through much-needed reforms. It seemed to work across a number of industries.

But now it faces a hurdle, energy. One company has a complete monopoly over Mexico's oil and gas, the state-owned Pemex. In fact, its hold over drilling is actually enshrined in Mexico's constitution.

But Pemex, like many state-owned behemoths, is an ailing, failed enterprise. Its production is below-par, it literally fuels corruption. And therein lies the problem. Any attempt to reform this sector is being rejected not only by the opposition parties, but also by factions within Pena Nieto's own party.

Pressures are building on the "Pact for Mexico." Local elections turned sour last week amid allegations of corruption with the opposition parties threatening to abandon the alliance altogether.

The irony is that perhaps Pena Nieto is a victim of his own success. Democracy is catching up with him. The opposition wants to be an opposition.

Now, it would be a real tragedy if the president's reform plans fall apart. We all know they make economic sense, but this is how politics works. There are competing interests, there are oppositions. In democracy, not everyone wants to pull in the same direction. So, it's honeymoon over, and back to reality. Maybe Pena Nieto should come up north and the U.S. could explain to him how to live in a world of polarization, paralysis, and gridlock.

Up next, the case for banning a great American pastime, college football. Sounds outlandish? Not if you listen to Malcolm Gladwell.

(BEGIN VIDEO CLIP)

MALCOLM GLADWELL, AUTHOR, STAFF WRITER, THE NEW YORKER: Why on Earth are you playing this violent (inaudible)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CROWLEY: I'm Candy Crowley in Washington with a check of the headlines. Al Qaeda affiliated groups are gaining strength in Syria. That's the assessment from the deputy director of the U.S. Defense Intelligence Agency. He says Islamic militants that have pledged allegiance to al Qaeda have been the most successful against Syrian government forces. The Obama administration has said it will increase military aid to some groups of Syrian rebels.

Israel says it's ready to resume peace talks with the Palestinians. The country is laying the groundwork for that by promising to release a limited number of Palestinian prisoners as a, quote, "good will gesture." A senior Palestinian official tells CNN his side still has a lot of questions to be answered, but Secretary of State John Kerry says both sides could be in Washington within the next week or so for talks.

The U.S. military dropped four bombs near Australia's Great Barrier Reef. Two Marine planes were forced to jettison the bombs because they were running out of fuel and could not land with the amount of equipment on board. Two of the bombs were disarmed before they were dropped. The other two were non-explosive. Australia's Great Barrier Reef is a habitat for animals threatened by extinction.

Those are your top stories. "Reliable Sources" is at the top of the hour. Now back to Fareed Zakaria "GPS."

ZAKARIA: Nothing is more American than football and it's not just the nation's most popular sport, it's big business even for America's colleges, where athletes are recruited to play in televised spectacles. If the football program of the University of Texas were a stand-alone business and if it were for sale, it would be worth more than $760 million. And others aren't far behind. That's according to Ryan Brewer, a professor at Indiana University who conducted an exhaustive study of the economics of 115 college football teams. With valuations like these, do you think these schools would consider suddenly just shutting down the programs? Well, that's what Malcolm Gladwell wants colleges to do, shut down their football teams. Why? He makes a compelling case that is worth hearing. Listen in to my conversation with the long-time "New Yorker" staff writer and best- selling author of "The Tipping Point Outliers" and the forthcoming book "David & Goliath, Underdogs, Misfits and the Art of Battling Giants."

Malcolm Gladwell, pleasure to have you on.

MALCOLM GLADWELL, STAFF WRITER, "THE NEW YORKER": It's good to be back.

ZAKARIA: What got you interested in football?

GLADWELL: Well, I -- I mean, for starters, I'm a football fan. And so I have -- but recently I've become aware of how like many people, of how morally problematic being a football fan has become.

ZAKARIA: Why? What did you start noticing?

GLADWELL: Well, it became -- all of this stuff on the some neurological consequences of -- potential neurological consequences of playing football has started to bubble up in the last couple of years and that adds to a whole series of other concerns that have been around for much longer, which is that playing football at an elite level, in college or at the pro level, has all kinds of long-term health consequences. We know from doing long-term epidemiological studies that there's a rate of injury, a rate of disability, a rate of early death. All these kinds of things that are associated with both the massive weight gain and also the consequences of banging into each other on the field over and over again. Added to that now, there is all of this, I think, powerfully suggestive evidence that some portion of football players are going to come down with a serious degenerative neurological disorder known as CTE, which is directly the consequence of being hit in the head repeatedly over the course of playing football. And at a certain point you have to ask yourself as a fan or as anyone who is in any way connected to football, is that -- is it appropriate in the modern day and age for us to support and participate in a game that has such a serious risk of physical harm to its players?

ZAKARIA: You compare football to dog fighting. Why?

GLADWELL: Yeah, I did a piece for the "New Yorker" a couple of years ago where I said this was at the time when Michael Vick was convicted of dogfighting. And to me that was such a kind of -- and the whole world got up in arms about this. How could he use dogs in a violent manner, in a way that compromised their health and integrity? And I was just struck at the time by the unbelievable hypocrisy of people in football, for goodness sake, getting up in arms about someone who chose to fight dogs, to pit one dog against each other. In what way is dogfighting any different from football on a certain level, right? I mean you take a young, vulnerable dog who is made vulnerable because of his allegiance to the owner. And you ask him to engage in serious, sustained physical combat with another dog under the control of another owner, right? Well, what's football? We take young -- take young boys essentially and we have them repeatedly over the course of the season smash each other in the head, right? With known neurological consequences. And why do they do that? Out of an allegiance to their owners and their coaches and a feeling they're participating in some grand American spectacle. They're the same thing. And the idea that as a culture we would be absolutely quick and sure about coming to the moral boiling point over the notion that you would do this to dogs and yet completely blind over the notion you would do this to young men is to my mind astonishing. So there was a certain point where I just said, you know, we have to say enough is enough.

ZAKARIA: And describe the neurological damage. Because you can see there are these studies, and you're right, they have proliferated, certainly in the last five years we have critical massive studies.

GLADWELL: Yes. So what we have begun to do is it starts -- there is a condition known as CTE, which is -- was seen first in boxers and now has been seen in football players. Basically it's been seen in any situation where people are repeatedly subjected to blows to the head. The difficulty with CTE is that it is at the present time can only be diagnosed upon autopsy. So we have no idea what percentage of living former boxers or present boxers or football players or hockey players are carrying around this kind of degenerative neurological disorder. It is a disorder which is similar but not identical to Alzheimer's. The difference being it has a different neurological consequence. It affects the brain in a different way. And it seems to be much more aggressive. So you can see neurological degeneration in ex-football players starting in their 40s or even their 30s. We've seen it in football players who were as young as 20 or 21. We've seen it in teenagers. There appear to be some percent of the population that appears to be especially susceptible to it. So you and I could both play football, could both be hit on the head 10,000 times and you could be totally fine and I could suffer from this horrible condition in my 30s. So, you know, and that's why when we see it in teenagers, we know that there must be an extreme form of susceptibility, which means that you only need to be hit on the head, you know, a relatively small number of times before you begin to show these symptoms.

ZAKARIA: And then you add to CTE, as you said, the other physical damage that having these very large, you know, almost deliberately bulked up people crashing into each other.

GLADWELL: Not almost ...

(CROSSTALK)

GLADWELL: You can't play offensive lineman in the NFL now unless you are well over 300 pounds. We see linemen who are now 350 pounds. Well, these are people whose natural weight is probably 200, 210. So we're adding 140 pounds of playing weight over the course of five and ten years. We're starting in high school. There are now high school offensive and defensive linemen who are north of 300 pounds. The long-term health consequences of that kind of extraordinary weight gain in your teens and 20s are known and devastating. I mean you would -- if I were to say to you I would like to take your children and I would like to double their weight over the course of the next five years so they can play a game, what would your reaction be? You would say that's insane, right? Why would I do that to my child? And yet we're doing this routinely.

ZAKARIA: We're going to talk about what we can do about this in a realistic manner when we come back.

More with Malcolm Gladwell when we come back.

(COMMERCIAL BREAK)

ZAKARIA: And we are back with Malcolm Gladwell, who wants college students to start boycotting football games. How can institutions of higher learning devoted to the building up of the human mind be at the same time encouraging a sport that we now know, he says, destroys the human brain?

You gave a speech at the University of Pennsylvania that's become a kind of Youtube sensation.

(BEGIN VIDEO CLIP)

GLADWELL: What level of proof do we need about that ...

(END VIDEO CLIP)

ZAKARIA: What did you -- what did you say in that speech?

GLADWELL: Well, I was invited to give this talk to the undergraduates about the subject of proof. And so I gave a talk which said how much proof do we need about the dangers of some activity before we act? And my argument was that there are times when our demand for proof is inappropriately high. When something that we're doing is not essential, it should only take the suspicion of some kind of harmful consequence for us to stop doing it. And I said to them, look, football, college football at a place like Penn fits that definition. You don't need a lot of proof, a lot of evidence about the potential risks of football for the kids at Penn playing football to stop playing it. There's no reason to play a dangerous, violent game at the University of Pennsylvania, right? I mean this is not a school that defines itself by its athletic prowess. It's not a school that depends on football to be some central part of its culture or its fund-raising effort. It's a school that wants to be a world class educational institution that attracts brilliant students from around the world. Why on earth are you playing this violent 19th century game? And by the way, the kicker is that two years ago the captain of the Penn football team committed suicide. And when they did an autopsy on his brain, what did they discover? CTE

ZAKARIA: Which is this neurological ...

GLADWELL: The same neurological disorder which we were seeing over and over again, now in football players. So here the university had direct experience with the pathological effects of the game of football such that this otherwise happy, healthy, the captain of their team, a guy who was beloved, a guy who had not a whisper of depression in his past, one day goes and hangs himself in his dorm room. And they do the autopsy and they find his brain looks like the brain of an 80-year-old with Alzheimer's. Right? And what did the school do after this event happened? Nothing. Nothing. Which I just find so morally outrageous. This is what I said to the kids. What are you doing? How did you let your administration get away with this? Why didn't you kick it -- why didn't you picket the gates of the football stadium on Saturdays and just say, no one should be going in and watching a spectacle. This is not -- we're not watching the gladiators in Roman times. I mean we're more sophisticated than this. Some -- one of us died as a result of this game.

ZAKARIA: And you don't buy the argument that this is important for part of the culture, alumni relations, fund-raising?

GLADWELL: If Penn -- if an elite Ivy League school like Penn needs to play a 19th century brutal game of football in order to buttress its culture, then they have the wrong culture, right? It's just an anachronism that no one has had the courage to say enough, it is inappropriate in this day and age to be doing this. The pro game is another matter, but there is just no conceivable argument to continue to practice this inhumane spectacle.

ZAKARIA: Do you think college presidents, particularly colleges like Harvard, Yale, Penn, should just get out of this business?

GLADWELL: I see absolutely no reason why any school that has -- and not just Ivy League schools, any college anywhere in this country or any other country that has even a remote -- has even a remote desire to be -- to have a serious academic mission, they should not be playing sports which have neurological consequences for their students. I mean is that -- is this such an outrageous request? Right? You know ...

ZAKARIA: So, educational institution that is meant to be building your brain, you shouldn't be encouraging people to play sports that destroy the brain?

GLADWELL: Yeah. That seems to be a norm. That seems to be reasonable.

ZAKARIA: You want kids to boycott college football. Are you having any -- the speech was a YouTube sensation.

GLADWELL: Yeah.

ZAKARIA: Are you -- are you getting any traction?

GLADWELL: I'm not done yet. What has to happen for this crusade to work, and I think there's a -- and it's not just me, there's a whole rising chorus on this subject. But what has to happen is for one prominent school has got to drop the sport, right? And when that happens, I think there will be a domino effect. But that school has got to be -- it's got to be Harvard or Penn or the great prize of Stanford. Stanford, you know, which has invested in its football program like no other elite school, Stanford has got to walk away. And if Stanford walked away, I think that it would put a dagger in the heart of college football. And what -- you know, the way to do this, I haven't done this yet, but all those big-name donors to Stanford, people who give -- you know, the Google guys on down the line who give serious money, they've just got to say, look, this is inappropriate. I'm giving money to make this into an elite intellectual institution. It is inappropriate for you to be taking the same student resources that I'm investing in and squandering them on the football field, right? That's what has to happen.

ZAKARIA: Malcolm Gladwell, pleasure to have you on.

GLADWELL: Pleasure.

ZAKARIA: We called the University of Pennsylvania to ask if it had done anything to combat head injuries and CTE in its football program. An athletic spokesman said that two years ago they did make changes, but he couldn't say if the changes were related to Owen Thomas' passing. The main action Penn took along with the rest of the Ivy League was to limit the number of full contact football practices per week. During the regular season, for instance, they now hold only two such practices, down from the NCAA's limit of five.

Up next, a mood ring for an entire nation. That's what this purports to be.

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ZAKARIA: Regular viewers will have noticed that "GPS" has thus far been completely free of any royal baby hype and hysteria, but we came up with an interesting question that you might like to try answering. Who was the last British monarch still on the throne for the birth of a great grandchild who was in direct succession to that throne? Is it A, Henry III, B, Elizabeth I, C, George III or D, Victoria? Stay tuned and we'll tell you the correct answer. Go to cnn.com/Fareed for more of the "GPS Challenge" and lots of insight and analysis. Also remember you can go to iTunes.com/fareed if you ever miss a show or a special.

This week's book of the week is "Museums Matter" by James Cuno. It's summertime and maybe you will be tempted into one of the great museums of the world. These museums are under attack from some places for housing stuff from other countries and cultures, often acquiring it in not-so-lovely ways. Well, the author, the head of the J. Paul Getty Trust, explains why the great encyclopedic museums, like the Metropolitan Museum, are essential to understanding the modern world. Understanding globalization, diverse cultures and basically are a force for good. It is a brilliant book, brief and very well written.

And now for the last look. It's tough to read the mood of an entire nation. But even tougher with the traditionally stoic Chinese. Is the national mood cheery or glum? Are they as a nation excited or mellow? Now we have a way to know, because the so-called Water Cube from the 2008 Olympics is now serving as a sort of national mood ring. Artist Jennifer Wen Ma and designer Zheng Jianwei have co coated the building with LED lights that change based on how the Chinese people feel. How do we know? Big data, of course, from China's Web users of which there are nearly 600 million. Each day software analyzes millions of emoticons, you know, those smiley faces or frowny faces or just odd faces from sites like the Weibo, the Chinese version of Twitter. They analyze data, then control the pace and brightness of the lights. Fast pulses for a more excited populous, a softer glow for a calm country. Next, new world meets old world. The colors, yellows, reds, blues, purples are determined from the ancient Chinese text, the I Ching. What it may lack in precision in explaining China's exact national mood, it more than makes up for in beauty. The correct answer to our "GPS Challenge" question was D. When the future king Edward VIII was born in 1894, his great grandmother, Queen Victoria, was still on the throne. Indeed she still had seven years left in her reign. Now, Edward is, of course, the monarch who famously abdicated the throne in 1936 to marry the love of his life, Mrs. Wallace Simpson. Let's hope history doesn't repeat itself in that respect and that abdication isn't in this baby's future.

Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "Reliable Sources."