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The 'Defining Challenge' of Helping the Poor; 2013 in Review; U.S. Versus Britain: How to Grow the Economy; A Rift Between United States, India

Aired December 22, 2013 - 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.

First, we have a star-studded panel to look back at the year and ask what were the smartest moves on the international chess board, the biggest blunders, the most impressive players in 2013? Then, the Federal Reserve signaled this week that America has emerged from its depths. I will talk to Britain's Finance Minister, George Osborne who argues that his nation's recovery proves that austerity actually works.

Later, is what the NSA does unconstitutional? I will ask President Obama's first Director of National Intelligence Dennis Blair for his take on the controversy.

Also, India versus America, the dust-up over America's treatment of an Indian diplomat. It shows you a side of India worth watching.

But, first, here's my take: Is income inequality the "defining challenge" of our time? President Obama's December 4th speech on the topic has provoked a lively debate on this subject.

I think part of the confusion some people have is that when we talk about inequality, we're are often talking about three different things. First, the astonishing rise of the very rich. Second, the stagnant wages poor prospects of the American middle class and, third, the large number of people at the very bottom of the ladder.

These are distinct phenomena. They may be related. The rise of the rich might be causing the stagnation of the middle class, but the research on that is mixed.

One thing is sure, the super-rich have grown worldwide, but the United States is at the head of the pack. And it appears to be caused by many factors. Some are structural, trends that reward superstars, globalization and technology, large and liquid financial markets.

Others are political, lower tax rates for the rich and the political influence of, say, the financial sector. Now, America has all these things, superstars, technological innovation, huge capital markets, tax cuts, deregulation. So it's not that surprising that it has had the biggest rise in its super-rich. Would taxing the rich create a more dynamic middle class? Perhaps, but it's not clear exactly how. It's also worth noting that America's tax system, relying on income taxes principally, is already more progressive than, say, European ones that get more of their revenues from sales taxes.

The top 10 percent of Americans pay 70 percent of all federal taxes. In New York City, the top 1 percent pay almost 45 percent of the city's taxes. How much more should they pay?

The stagnant middle class is clearly the most important challenge involving the most people. But it's also the hardest one for which to find an enduring solution. Remember this problem began 40 years ago.

There is some evidence that the expanding rich have crowded out the middle class, but there's also a powerful story to be told about how technology, globalization and declining American education and skills have led to the stagnation of wages for the middle class.

Some argue that the real link between the rise of the rich and the fall of the middle class is political. The rich have captured the political system and milked it to their advantage. And it's true that because of the vast role of money in politics, the well-off and the well-organized can often get special tax breaks and regulatory relief to help them.

But more broadly, look at what's happened in the past 10 years in America. Medicare was expanded dramatically, universal health care was enacted, energy policy has been changed against the wishes of big oil and coal companies, tax rates on the rich have goes up at the federal, state and local level to at least a 30-year high.

And it was American that passed a stimulus program of almost $1 trillion to fight unemployment after the financial crisis. Europe, with its more egalitarian politics, actually slashed social spending in the face of its worst unemployment in decades.

On its face, this is not strong evidence of the political power of America's rich.

Of the three problems, the easiest to fix is the one we spend the least time talking about: the fate of the poor, who now number 46 million Americans. Since the poor tend not to vote nor lobby nor petition politicians, they don't get much attention.

And, as a result government does not devote much energy or resources to their problems, especially those of impoverished children who suffer from malnutrition, bad health and poor education, which cripples their chances of escaping poverty. The resources needed to change this would be a fraction of what we spend on the middle class in this country.

We don't have all the answers, but if you're looking for the policy that would likely have the biggest effect on increasing social mobility and reducing inequality, let's shift the attention from the rich and the middle class and focus, for once, on the 46 million Americans who are often forgotten.

For more, go to and read my Washington Post column this week. Let's get started.

With nine days to go in 2013, I thought it was the perfect time to give the year a good old GPS assessment. How did we do? Did the world make more strides towards peace or war, how did the world leaders behave themselves and what of the global economy? Are we finally seeing some real improvement?

I have a true all-star GPS panel to discuss it all. Anne-Marie Slaughter is the president and CEO of the New America Foundation and the former director of policy planning at the State Department.

Bret Stephens in the Pulitzer prize-winning foreign affairs columnist for the Wall Street Journal. Zanny Minton Beddoes is the economics editor of the Economist and Ian Bremmer is the founder and president of the Eurasia Group which looks at political risk around the world.

So, Bret, how do you think President Obama did, for a completely fair and unbiased assessment?

BRET STEPHENS, PULITIZER PRIZE-WINNING FOREIGN AFFAIRS COLUMNIST, WALL STREET JOURNAL: About as well as President Bush did at a similar time in his tenure, 2005, which is to say it has not been a good year for him domestically for all the reasons that we know since the disastrous roll-out of Obamacare, which I think is going to be a rolling disaster. We haven't seen the end of it by any stretch.

But in foreign policy, I think this has been a year of American weakness. We saw it in the gyrations about what to do with Syria and the Assad regime's use of chemical weapons.

We've seen it, in my view and I have a sense there's going to be some disagreement, with this very ill-conceived deal with Iran. We've seen it in the skepticism of traditional allies from Japan to Israel and, most outspokenly, Saudi Arabia, who no longer feel confident about American security guarantees that have been good for six decades.

Our allies are abandoning us and we're making a quest to gain friends who I don't think are ever going to come our way.

ZAKARIA: Anne-Marie, you know, the Obama administration would say we got a deal to get chemical weapons out of Syria, we're trying to get a deal to get Iran securely on a non-nuclear path ...


ZAKARIA: Those are their accomplishments.

SLAUGHTER: I mean, look, those are hard accomplishments. I mean even I've been very critical of our Syria policy and the optics of focusing more on chemical weapons than the tens of thousands, hundreds of thousands of deaths, but the fact remains we are getting chemical weapons out of Syria.

And the framework agreement with Iran is more than anyone has been able to do for a decade. It bodes very well. The fact that it exists is very important.

I would say there are two ways in which he's had a very bad year. One, not his fault and one his fault. The one not his fault is the congressional display of shutting down the government.

Our standing was already weakened after the financial crisis. Now, country's look at us and say not only can you not run your economy, you don't have a functioning democracy. So that one wasn't his fault, but it's there.

And the second is the NSA spying scandal which nobody pays enough attention to. But if you think of the Internet as its own realm of diplomacy, we did very badly this year.

And talk about damage to our European allies, to Brazil, to other countries, that one hurt us and he hasn't fixed it.

ZAKARIA: What do you think about this idea that America's standing, for whatever reason, has diminished this year?

IAN BREMMER, FOUNDER AND PRESIDENT, EURASIA GROUP: America's standing as their investment destination has not, America's standing as an economy has not diminished and despite Obamacare and all the problems, we see that with the market reaction to the taper. It's very favorable.

People like the U.S. economy. They should. But U.S. standing in the world in terms of foreign policy has absolutely diminished. I agree with the points. Syria has been, in perception, a disaster -- unmitigated disaster for the U.S. and its commitment to allies and its ability to stick with promises that they make. It certainly hurt American allies in different parts of the world.

The Snowden issue has had a major impact. Impact of the government shutdown, Obama not showing up at the APEC summit has hurt the Americans on the Transpacific Partnership and now won't get done by the end of 2014 is the signal accomplishment that Obama could have in foreign policy.

But there's one thing that we haven't said yet, which I think is also important, that's also the second term team. Hillary Clinton's not there anymore, Geithner's not there anymore, Gates isn't there anymore, Donilon's not there anymore. These ...

ZAKARIA: But John Kerry's has had a pretty impressive start in terms of the energy, ambition. He -- you know, set out a bunch of different issues on Iran, on Syria, even the, you know, Middle East peace process he has managed to revive. Obviously, it may not work out, but it's better that they're talking than they're not. BREMMER: Certainly, Kerry was not Obama's first choice and the lack of coordination and the perceiving lack of trust, especially in the way the Syria policy played out with Kerry saying one thing and Obama backtracking by talking to his Chief of Staff and not talking to Kerry. That did not look well for our allies.

I give Kerry high marks on continuing a Bush administration policy on Iran to get them to the table. Whether or not a deal happens, whether or not it's a good thing, we'll, I'm sure, debate, But if you ask me, marks you want to give Kerry on.

Doing Israel/Palestine a whole bunch when it's not going to actually happen and no one really cares, I wouldn't give him high marks on that.

SLAUGHTER: We care. We definitely care.

BREMMER: The American people do not.


BREMMER: And South Korea/Japan is something that'll be much more -- frankly, his Asia focus isn't there and I think that's a serious problem given that's where the Americans need to be.

ZAKARIA: Zanny, what has surprised you most about this year economically?

ZANNY MINTON BEDDOES, ECONOMICS EDITOR, THE ECONOMIST: You know, I think actually, to go on from what Ian has said, what struck me really about the economy is the dissonance between what's happened on Wall Street and what's actually happened in the real economy.

I mean it's been an amazing year on Wall Street. It's been an amazing year in most financial markets internationally. If you actually look at the real economy, now, at the end of the year, we're beginning to see some -- we're hoping to see some really strong acceleration in 2014, but it's been a pretty lackluster year.

This is still a very tepid recovery. We still haven't had that real acceleration that we want and we've had that in part because of the mess in Washington again.

I mean it's been a recovery that's been held back by stupid fiscal policy. We've discussed this before, you and I, the cuts, the sequestration, the tax increases at the beginning of the year, the short-term fiscal tightening something of the order of 1, three- quarter percent of GDP, was enough to drag what could have been a rather stronger recovery down and it was a really stupid thing to do.

ZAKARIA: All right. We got to wrap this up, but I want to ask you winners and losers and I have -- you know, I'm going to point it in one direction, but you can take it where you want.

Putin, has he played a weak hand pretty well? Has he -- his standing seems to have improved. Snowden, Syria. STEPHENS: It's fantastic considering the difficulty that Russia is in on so many levels, not the last of which is the fact that they can't keep growing their economy on commodities forever.

In Syria, he's played a brilliant hand. In Iran, he's doing it. Big question is what his relationship with Merkel and the rest of Europe is going to look like in the next year.

ZAKARIA: Xi Jinping emerges, most powerful leader in China in 15 years.

BREMMER: Easily and he's a winner. There's no question. When you look around the world and you see we've got lots of weak leaders in emerging markets, Xi Jinping is the major exception to that.

ZAKARIA: Who do you think is a big winner?

SLAUGHTER: Well, I was going to actually -- I disagree with Bret on Putin. Yes, he looks great in terms of the specifics he's done. But, more generally, what's going on domestically in Russia is bad.

The economy is bad. The political dissent, he keeps pushing it down. It keeps coming up. Even the sort of elites are really getting quite dissatisfied. And I actually think what you're seeing is the classic foreign policy cover in Russia for domestic unrest. I think he's going to look very different at the end of 2014.

STEPHENS: I hope you're right.

ZAKARIA: Who's is the economic star of 2013? Is there one?

MINTON BEDDOES: I guess Ben Bernanke, but he had some hiccups in the middle of the year.

But just quickly the winner who I think has been surprisingly unable to make the most of it is Angela Merkel. She wins big. She had a huge, almost historic victory, not quite enough to govern without a coalition partner, protracted coalitions and she's now having to adopt all kinds of policies that she doesn't really like.

ZAKARIA: Up next, does austerity really work? Britain's Chancellor of the Exchequer George Osborne will argue his case.


ZAKARIA: On Wednesday, the United States Federal Reserve announced that it was beginning the taper. That's the process by which it will end the extraordinary efforts put in place after the financial crisis to keep the U.S. economy from collapsing.

The Fed has bought up trillions of dollars of U.S. government bonds to keep interest rates low and to stimulate the economy. And the Obama administration pushed a large stimulus program to jump start the stalled economy.

Our special allies across the pond in the United Kingdom have taken essentially the opposite fiscal approach in the five years since the crisis, cutting down on government spending.

George Osborne was the master of that austerity plan. He is the Chancellor of the Exchequer, Britain's grand title for finance minister. He joined me here in New York.


ZAKARIA: Thank you, George Osborne for joining us.

Let me ask you, to begin with, you've been touting Britain's growth. You've written an op-ed in the Wall Street Journal. But, of course, there are a lot of people who say Britain's recovery has been very weak, the weakest in the G7 other than Italy.

And there is a specific charge made which is that it was your austerity program, especially the spending cuts that was responsible for this very weak recovery.

Let me read to you something Larry Summers said on British television. He said Britain's economic policies, meaning yours, "Are a powerful empirical test of the efficacy of determined, resolute austerity and the results so far have not been encouraging to advocates of that strategy. They are in line with predictions that this austerity would lead to reductions in demand, reductions in GDP," et cetera.

What's your response?

GEORGE OSBORNE, CHANCELLOR OF THE EXCHEQUER AND SECOND LORD OF THE TREASURY OF THE UNITED KINGDOM: Well, I totally reject his analysis. If you look at the situation the U.K. found itself in three-and-a-half years ago, we had had one of the deepest recessions of any of the major economies of the world.

Our GDP had shrunk by over 7 percent of GDP. We had the largest banking crisis of any financial center, the biggest bank bailout. And we exited with a very high budget deficit, an 11 percent budget deficit. Really only the United States had a similar sized deficit and, of course, the U.S. has a reserve currency.

That was the situation we were confronting and we set out a deliberate plan to bring that deficit down, reduce the structural deficit to sort out some of the structural problems in our financial system and to rebalance the British economy.

And I think three-and-a-half years on, the British economy is currently growing faster than pretty much any other Western economy, jobs are being created at a rapid rate each month and you can see a rebalancing happening.

ZAKARIA: One of the points Summers makes though is that the, "path to deficit reduction ultimately lies in stronger growth." You pointed out that Britain and the United States had roughly comparable budget deficits when the -- sooner after the crisis.

The U.S. budget deficit has gone down dramatically, more so than Britain, and the reason, I think Summers would argue, is that we've growth faster. And the reason we've grown faster is we didn't have as much as spending cuts and as much austerity.

OSBORNE: The thing to focus here is on the structural deficit and there's been a sharper fall in the structural deficit in the U.K. than any of the other G7 nations

And, above all, we have a consistent plan. People have been able to look at us and know what we're going to do this year and what we're going to do next year, what we did last year.

And we've been able to provide stability and confidence and predictably for families for investors into the U.K. and, as a result, I think people around the world are looking to the U.K. now and investing in the U.K. and job creation in the U.K. is running at around 60,000 a month, which in the U.S. context, would be around 300,000 jobs a month. So, you know, that's strong as well.

Now, I'm the first to say the job's not done, but I think the central argument that do you have to confront your problems, yes or no, that argument, which I said you do have to confront your problems, has been won.

ZAKARIA: You also have a different approach on one other issue where you've been aggressively trying to get the Chinese to essentially invest in anything that is British, in ports, in airports. You've been trying to get the Chinese to invest in nuclear power in Britain.

Explain what's going on because this is quite different -- or, at least, the United States has a stronger sense of being a little weary of that kind of foreign capital.

OSBORNE: Well, I start with this principle: that a country like Britain has got to earn its way in the world and attract investment in the world if it's going to succeed and increase the living standards of its population.

It's got to have a government that lives within its means, but it also has got to be an attractive place to do business. And I see Chinese investment as an enormous potential source of wealth creation for the United Kingdom. And I want to see that Chinese money helping create British jobs and British infrastructure.

And, of course, we have national security checks and procedures as we would do with investment from other countries, but I see China has a great source of opportunity.

ZAKARIA: Let me ask you about something, and you have to put your hat on here as David Cameron's principle political advisor, you've often been called one of the architects of the conservative electoral strategy.

The Prime Minister and you face a certain amount of opposition now from what we would call in the United States your base, that is hard-core conservatives on issues like gay marriage which David Cameron has been very strongly supportive of, also on (inaudible).

Do you believe that you will be able to weather these challenges from the base of the conservative party?

OSBORNE: I'm a conservative who believes in reducing people's taxes, government living within its means, vested interest in education being overcome so kids are properly taught, welfare being reformed. I tick all those conservative boxes.

But I also think successful conservative parties have to be in touch with the modern world. They have to reflect the world around them if they want to represent that world in government.

And on an issue like gay marriage, I was a supporter of that, and it's a conservative-led government in Britain that has made that law and that's something that I'm proud of.

And I think, on many of these social issues, which are not as -- you know, they're not as hotly contested as they are in the U.S. political debate so you have to aim off a bit and accept it's a different context.

But I think in these areas there's no reason why the conservative party can't lead the agenda. And it was actually, if you look at British history, a conservative who abolished slavery and a conservative who introduced the first restrictions on factory, and a conservative who allowed women to have the vote in Britain.

So we've got a proud tradition that we can tap into to up progressive tradition if you like and I don't think we should leave that space to the left.

ZAKARIA: George Osborne, pleasure to have you on. Come back often.

OSBORNE: Thank you.


ZAKARIA: Up next, What in the World. Why India is angry at the United States. I'll try to explain.


ZAKARIA: Now for our What in the World segment. The United States walked into a skirmish this week not with China, not Iran, but with India. Why are Indians so angry with America?

Well, they say that the United States mistreated an Indian consular worker who was arrested this week for allegedly falsifying a visa application for her live-in made and for paying that maid less than a third of the U.S. minimum wage.

The facts of the case continue to emerge, but the incident highlights that, for all their similarities, big democracies, partners in Asia, India and America are very different societies. Despite its impressive growth, India remains quite poor. Even if the consular worker's made was being paid only $300 a month she was making two-and-a-half times the Indian national average.

Second, India has a recent history of diplomats being involved with visa fraud. This shouldn't be surprisingly unfortunately, India ranks 94th in the world for transparency.

And, lastly, why are Indian politicians feeding all of this outrage? Well, they're up for election next year. With some 700 million eligible voters, this will be the greatest exercise in democracy the world has ever seen.

All those topics are part of my new special report on India. It's called "India at the Crossroads." The program airs next week in our regular time slot. Here is a small preview. It's about how Indians are trying to tackle some of their worst social ills, but in a decidedly modern way, maybe one that owes something to Oprah Winfrey.


ZAKARIA: Meet Aamir Khan, the Tom Cruise of India. He's one of the biggest stars in Bollywood, India's wildly successful song and dance film industry. But Khan took a big risk with another recent career move.

He wanted to host and produce a television show, one that would explore some of India's most taboo subjects, including its caste system, domestic violence and abortion.


ZAKARIA: You realize how strange it is. This is like Tom Cruise hosting and researching 60 minutes. Right? I mean do you think you're ...

AAMIR KHAN, BOLLYWOOD STAR: It's unusual. No, it is unusual. I agree it's unusual, but I guess it's something that has been troubling me. Something that I felt like doing.

The show is called Satyamev Jayte which translates to Truth Alone Prevails. That's also India's official national motto.

Khan's goal of vivid in-depth discussion of some of India's biggest problems in the hope of sparking a national conversation about the direction of the country. Each 90-minute episode would focus on a different topic.

KHAN: We do a lot of research on each of the topics. And then once we've gathered that material, we try and tell it to you in a way that it hits home.

ZAKARIA: The first episode examined one of the nation's most troubling social ills. Female feticide: the practice of aborting a fetus because it is female. Thanks in part to the practice, men outnumber women in India by over 45 million. The problem is so bad that the government actually banned doctors from telling expectant parents the gender of their own fetus.

KHAN: The ratio of girls against boys tilts dramatically. Then you are going to have huge sociological problems across the country.

ZAKARIA: Entire communities have been affected. In a satellite interview, Khan asked a group of men to raise their hands if they were of marrying age. When he asked them who was married? They all put their hands down.

KHAN: We discovered that there are religious, that there are only male children that can't find anyone to get married to because there are no women in their area. It's absurd. It's reached absurd levels.


ZAKARIA: You'll have to watch the full hour to get a sense of how India is dealing with all its problems. It's a great program. "India at a Crossroads" next week in our regular time slot. If you want to understand where this huge, chaotic country is headed, this is must see television. We'll be right back.


CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington with a check of the headlines. As many as three dozen Americans are trapped inside an increasingly unstable South Sudan. Efforts to evacuate them failed yesterday when gunmen fired on three U.S. military aircraft and wounded four service members. Those troops are in stable condition. The Pentagon is mapping out another option to try and get the American civilians out of South Sudan.

A teenager who was shot and wounded in a Colorado high school shooting eight days ago has died. 17-year-old Claire Davis was shot in the head by a fellow student who eventually killed himself. Investigators say Davis did not know the gunman. Claire Davis had been in a coma since the shooting.

Severe weather has hit parts of the South and Midwest. Four days before Christmas what may have been tornadoes in Arkansas carved the path of destruction. In Mississippi, severe storms are blamed for killing two people. Further west, an ice storm left branches frozen in midair and forced air travelers to scramble to rebook flights. Some places got more than a foot of snow. Those are your top stories. "Reliable Sources" with Brian Stelter is at the top of the hour. But now back to "Fareed Zakaria GPS."

ZAKARIA: This week a federal judge ruled that the NSA's program that vacuums up data about all American phone calls is likely unconstitutional and a presidential advisory panel on the matter urged President Obama this week to stop the practice and put in place major reforms on intelligence gathering. I wanted to put all of that to President Obama's first director of National Intelligence, now Retired Naval Admiral Dennis Blair.

Admiral, what do you make of this court ruling? I know you're not a judge. But my point, my question would be if that ruling is upheld, does it cripple the NSA, its ability to collect this kind of data? How big a blow would that be?

DENNIS BLAIR, FORMER DIRECTOR OF NATIONAL INTELLIGENCE UNDER PRESIDENT OBAMA: I think the larger question here that the issue that ought to be discussed is this balance between privacy on the one hand and protection on the other hand. It really is a tradeoff. When you're in the insides of the intelligence business, you're really driven by trying to find out who are the bad people out there who are trying - who are making plans and intending to kill a lot of Americans, a lot of innocent Americans and you really are driven to do everything you can within constitutional limits to try to identify them and stop them. And we have done an extremely good job so far. I would say over the last 11 years, 12 years, since 9/11. The question is ...

ZAKARIA: But the panel is saying that you've drawn the wrong balance or, you know, that the balance between security and liberty has been badly drawn, that there's not enough protection of individual liberties, not enough checks and balances in place and a lot of what they are arguing for is not that you can't do these things, but that, for example, the FISA court need to be - have more procedures in it. There needs to be judges appointed by people other than the Chief Justice of the Supreme Court. There needs to be a public advocate, what's wrong with putting in all of those kind of checks and balances?

BLAIR: I don't see anything wrong with putting in additional checks and balances on the FISA court along the lines that have been suggested. But, you know, Fareed, the main thing that I've looked for in the program was whether actual harm was done to an innocent American by the program. Has anybody lost a job, been harassed by the FBI, been barred from doing something as a result of the program? Any innocent American? And the answer is no. None of those have come to light. All the concern is about the possibility of misuse of this information by the National Security Agency and the intelligence community. My experience is that information is not misused and that having it available to efficiently check to see whether a foreigner who has been identified as a potential terrorist has called an American phone number is a useful check and, in fact, has helped us thwart some attacks.

ZAKARIA: Senator Wyden says that it is pretty clear now that the phone logging program that the NSA uses, this big data mining program, did not in fact stop any terrorist attacks. That the committee's - the advisory panel's report makes that clear. Your reaction?

BLAIR: I think that's incorrect. I would cite the Najibullah Zazi plans to set off a number of bombs in the New York City subways in 2009 on a pattern of the 2005 London attacks and I know that the information gathered by NSA under this program was a key factor in tipping us off as to what Zazi was up to and he was subsequently stopped before he could do it. So, I just think that's incorrect. Intelligence is a lot of different indicators put together when done well to find what's going on and this program has contributed to that and I believe it's constitutional. So, I believe it should continue. ZAKARIA: Do you understand the kind of anger, though, that this has generated around the world and in the United States because there's the sense that the NSA and it's really about the NSA, has this technological capacity to look into almost anything, anyone's phone calls, anyone's emails and the response of the intelligence community seems to be, well, trust us. We're not going to do anything really silly with this.

BLAIR: I do believe and I tried when I was director of National Intelligence to talk more openly about this program. I think we can do that without talking about specific details which are what would have to be kept secret and I think that this administration has done a bad job of explaining it and had we done it from an early stage, from the time that I was DNI on, then these revelations would have been less shocking. I think a couple of things are worth mentioning though. The scale of these programs is large because the scale of communications is large. And there are billions of phone calls, emails, tweets and other forms of communication being made all over the world. So, in order to try to find ones that are being made by those hostile to the United States it will require big programs, large computers, lots of data. So, that simply is a question of scale and not a question of principles.

ZAKARIA: Admiral Dennis Blair, pleasure to have you on.

BLAIR: Nice to talk with you, Fareed.

ZAKARIA: Up next, why a group of American professors have decided to boycott Israel's academic institutions. I have a response from one of Israel's top thinkers.


ZAKARIA: This week the American Studies Association voted to endorse a boycott of Israel's academic institutions. It is a small symbolic step, of course, but one that has resonated because it happened in the United States, which is generally strongly supportive of Israel. Meanwhile, the war in Syria threatens daily to spill over the border and to the Golan Heights, turmoil in Egypt has greatly complicated what had been a stable relationship and Iran is now negotiating with the west. So, what is Israel to do? Ari Shavit is one of the most keen observers of Israel. I know he is a senior correspondent and member of the editorial board of "Haaretz", a newspaper, and he has a new book out, "My Promised Land: the Triumph and Tragedy of Israel."

Ari, let's start with this boycott. This is something -- the kind of thing people in Israel have long talked about and worried about which is a campaign to delegitimize Israel, those - the phrase I've often heard. What do you make of it?

ARI SHAVIT, AUTHOR "MY PROMISED LAND": When I heard this news I was filled and am filled with outrage. I mean there is a limit to the hypocrisy regarding Israel one can accept. Because there is so many - you just mentioned Syria, you mentioned Egypt. There are so many countries whose violations of human rights are so much worse than anything can be attributed to Israel, and yet, there isn't such movements against them. So, I can - I really think that this is despicable in many ways. And I think that this trend of Israel bashing and not recognizing the fact that at its heart, at its basis Israel is a just country. Israel is a moral endeavor. And is - I find this really outrageous in many ways. So, again, one is legitimate in criticizing Israel policy. One is legitimate like my position in it that occupation is wrong. But to go against Israel in such a way and to treat it as an evil power is outrageous.

ZAKARIA: Give us a sense of the mood in Israel now. Because one of the things you say in the book that struck me was, you call it the most intimidated country in the world. Now, when I look at Israel, you know, I used to - when we were in graduate school we would look at the balance of power in the Middle East and what Israel worried about was the great Egyptian army and the great Syrian army and the great Iraqi army and they are all in shambles. Israel is a regional superpower. It has nuclear weapons. Why is this country intimidated?

SHAVIT: Because at the heart of it, it's true that right now tactically, so to speak, and for short and medium range some of - all threats that faced Israel have diminished dramatically. But the basic tension between Israel and many of its neighbors is there and many of its neighbors regretfully actually want Israel to be eliminated. Definitely, Iran, which you just mentioned, sees the destruction of Israel as still a goal. But it's not only Iran. So, I plea with the people who are criticizing Israel sometimes rightly to be aware of the context. Both the historic context of people who are total and ultimate victims of Europe who save themselves by creating that Jewish national home and are still in danger now in a way that no other nation is in danger.

ZAKARIA: But you say that even though, you know, fearful or intimidated, one of the things you portray in the book very richly is the kind of vibrancy of life in Israel. And is that partly the kind of economic boom and the technological boom that has taken place that has created the sense of vigor?

SHAVIT: That's part of it. But what I try to do in the book -- the reason I wrote this book is really that I felt that both Israelis and many people talking about Israel have lost the narrative. On the one hand, Israel is really, a nation on the edge. It is really in danger. It is really threatened in many ways. But the beauty of Israel and really the successes - in many ways Israel is a phenomenon of vitality against all. The beauty of it that we haven't turned the life on the edge into something that makes us depressed, passive in any sort of way. On the contrary. We have turned the life on the edge into a source of power and energy. This is the great man-made miracle Israel is. So, one should criticize - what should be criticized, but one should have a look at this amazing human endeavor of the people who are really homeless people that created a home for themselves, saved themselves physically, and in many ways came from death, are endangered by death, but they are celebrating life in the most vibrant way possible.

ZAKARIA: You know, you talk about how Israel is a just nation and a just cause as it were. In the book you talk, though, about the awkwardness or the historical tragedy of the fact that all these people came from Europe and in the case of your family from London as I remember, and almost did not realize or did not let it fully enter their consciousness that there were people in this land. It was not as the famous slogan went, a land without people for a people without land.

SHAVIT: Absolutely. Look, Zionist - the Zionist movement had two brilliant insights. One, it tried to preempt Auschwitz. It tried to save European Jewry from destruction, from catastrophe. The other - it tried to create a non-ultra Orthodox home for non-ultra Orthodox Jewish civilization and to save its identity, to create the power house for Jewish identity in that land. But the flaw was that my great grandfather like others (inaudible) founders of Zionism, did not see the fact that there were other people in that land. And this is really - I would say that that kind of blindness is the source of the tragedy of the 100-year war. But I want to remind you that the Palestinians were blind too. That heart of the conflict is that we were blind to the fact that they were a people and they are blind to the fact that we are a people. And my hope for the future is that we'll get over this blindness not only in a political, diplomatic, legal way, but we should acknowledge their existence, they should acknowledge ours and then we can move forward into a better future that remembers the past, remembers the pains of the past, but actually creates (ph) the future to our children and theirs.

ZAKARIA: Ari Shavit, pleasure to have you on.

SHAVIT: Thank you.

ZAKARIA: Up next, a big thaw in Iran. We'll explain.


ZAKARIA: President Obama's recent approval ratings are reaching new lows, which brings me to my question of the week. Which president has had the lowest approval ratings? Is it, a, Barack Obama, B, George W. Bush, C, Harry Truman or D., Jimmy Carter. Stay tuned and we'll give you the correct answer. Now, if you are a procrastinator and want a late holiday present for your favorite "GPS" fan, please consider a brand-new item: a GPS travel mug. It can keep your coffee hot or your water cold. Go to our website for a link to the CNN store where you can buy one. It won't get there for Christmas, but maybe Happy New Year.

This week's book of the week is "The Great War" by Mark Holborn and Hilary Roberts. There are many new books out about World War One, the war that changed history, but none more arresting than this compendium of photographs. You see crowds cheering the announcement of hostilities in 1914 and then you see the carnage of the trenches a few years later. It's an expensive book, but one to treasure.

And now for "The Last Look." I learned something knew this week. I knew that after the 1979 revolution in Iran, the mullahs forbade alcohol. They banned neck ties for being too Western, pop music was not allowed and movies were highly censored, but they also banned less sinister activities. I didn't realize they closed all ice skating rinks. At least in Tehran, where a venue called "The Ice Palace" was famous. But now Tehran's long suffering skaters are back in business gliding along the ice at the newly opened Aramis Rink. One of the aims, besides general recreation, I suppose, is to allow Iran's athletes to practice for the upcoming Olympic and Asian games. But don't expect to see Iran taking part in ice dancing competitions like this. Despite the signs of liberalization we've seen from Iran in recent months, some things are still sacrosanct. Men and women are not allowed on the ice together.

The correct answer to our "GPS Challenge" question was C. Harry Truman had the lowest presidential approval ratings since Gallup began measuring such things in 1937. Only 22 percent of the country approved of Truman's performance in February of 1952. Interestingly, Truman also had the third highest approval ratings in Gallup's history shortly after he took office in 1945, his approval ratings were at 87 percent. That is behind only the two Bushes, George w. Bush in the aftermath of the September 11th attacks and George H.W. Bush after the Gulf War.

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