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Interview with Toomas Hendrik Ilves, Radek Sikorski; Interview with Ngozi Okonjo-Iweala; Interview with Megan McArdle

Aired March 16, 2014 - 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.

Today we will bring you the latest on the Crimean referendum and on that Malaysian plane.

Also, we know how America has reacted to President Putin's moves into Crimea,but what about Russia's neighbors? I will talk to two high officials from countries that border parts of Russia, countries that have been invaded by Moscow before. How worried are they?

And a fascinating mystery, how does $20 billion get lost from a nation's treasury. That is what is being alleged by the head of the central bank of an oil rich African country.


UNIDENTIFIED MALE: There's $20 billion that has not come back.


ZAKARIA: The result, he gets suspended from his job. I will ask the country's finance minister to explain what's going on.

Then, the Olympics reminded us of the agony of defeat. But is failure actually good for you? That's what a new book says. I will talk to its author.

But first, here's my take. The crisis in Ukraine was produced by two sets of blunders, neither emanating from Washington. The European Union's vacillations and most significantly, of course, Russia's aggression produced the problem.

But it will now be up to President Obama to show the strength and skill to resolve it.

For years now, the European Union has had an ambivalent attitude towards Ukraine which produced instability in that country and opposition from Russia. Ukraine is the most important country in the post-Soviet space that Russia seeks to dominate politically. If Europe wanted to help Ukraine move west it should have planned a bold, generous and swift strategy of attraction. Instead, the EU conducted lengthy, meandering negotiations with Kiev.

But let us not persist in believing that Moscow's moves have been strategically brilliant. Vladimir Putin must have watched events unfold in Ukraine in February with deep frustration, as a pro-Russian government was swept out of power, because the Sochi Olympics were under way, which limited what he could do.

When the Olympics ended, he acted quickly, essentially annexing Crimea. But it was a blunder. In taking over Crimea, Putin has lost Ukraine. Since 1991, Russia has influenced Ukraine through pro- Russian politicians who were bribed by Moscow to listen to its dictates. But that path is now blocked, as Princeton's Steve Kotkin has pointed out on this program last week, without Crimea, which has an ethnic Russian majority no pro-Russian politician could hope to get elected president of Ukraine.

Remember, Ukraine is divided but not in half. Without Crimea, only 15% of Ukraine is ethnically Russian.

As important as losing Ukraine, Putin has triggered a deep anti- Russian nationalism around his borders. There are 25 million ethnic Russians living outside of Russia and countries like Kazakhstan with significant Russian minorities, must wonder whether Putin could foment secessionist moments in their country as well and then use the Russian army to protect them.

Beyond the near abroad, Russia's relations with countries like Poland and Hungary, that were once warming are now tense and adversarial. NATO, which has been searching for a role in the post- Cold War world has been given a new lease on life.

Moscow will face some sanctions from Washington and almost certainly from the European Union as well. And in a rare break with Russia during the discussions at the UN security council, even China refused to condone Russia's moves into Crimea.

Now I have generally been weary of the calls of American intervention in any and every conflict around the world, but this is different. The crisis in Ukraine is the most significant geopolitical problem since the end of the Cold War. Unlike many of the tragic ethnic and civil wars that have bubbled over the last three decades this one involves a great global power, Russia, and thus can and will have far-reaching consequences. And it involves a great global principle -- can national boundaries be changed by brute force?

If this becomes acceptable, what happens in Asia where there are dozens of contested boundaries and several great powers that want to redraw them. So President Obama must rally the world, push the Europeans, and negotiate with the Russians. In this crisis, America truly is the indispensable nation.

For more go and read my Washington Post column this week.

Let's get started.

I'll be back with much more later on in the show. But for now, let's go to CNN's Jim Sciutto for the latest.


There are two major developing international stories we're following today -- the search for that missing Malaysian airlines jetliner and the referendum in Crimea. And that's where we'll begin.

In the latest event in this fight between east and west over Crimea, today Crimean citizens are casting their ballots whether or not to join Russia. At a recent count, almost 50 percent of the region had voted in what the United States and other European powers call an illegal vote.

Nick Paton Walsh is in Lenin square in Simferopol, that's the capital of Crimea. Nick, I have to ask you as this vote gets under way, you've got lots of Russian troops on the ground, even questions as to how the ballot is structured.

Is there any doubt as to the outcome of today's referendum?

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: Not really, Jim, no. I mean this is like most elections that happen in Russia, they're voting to join here, it's more an endorsement to the political decision that's already been made, than it is a genuine choice for the people of Crimea.

You don't hear any pro-Ukrainian sentiment on the street. You hear from the ethnic Tatar minority that they're boycotting the vote, that they're deeply unhappy. But there's no sense of contest or equal campaigning here.

We've seen a tweet from the de facto prime minister here Sergei Aksyonov, he thanked people for 65 percent turnout so far. You hear officials saying they reckon about 80 percent of the vote is going go their way. So, they're probably past the halfway mark they need to declare this referendum a success. But that was never really in any doubt at all, Jim.

SCIUTTO: Nick, and very quickly here, you have Russian troops on the ground. They've entered an area that's actually part of eastern Ukraine yesterday, more clashes between pro-Russian forces and some pro-Ukrainians there as well, some of these militias.

What is the tension on the ground today? Is there concern of that boiling over into violence?

WALSH: Well, certainly in Crimea I think everyone feels it's a done deal. There's an outstanding question as to what happens to the remaining Ukraine troops who are still on bases here. I met one leader of a bunch of holdout, 15 Ukrainian soldiers on a base who said they were very worried about what happens next because pro-Crimean forces -- or pro-Russian forces are now totally in control of that Ukrainian base.

But the east is more worrying too. We're hearing from our colleagues in Donetsk that protesters have broken into the prosecutors office there, that's a substantial move.

The point is, Jim, that as this violence continues in the east, it adds increased fuel to the Russian foreign ministry's constant statements that they may intervene to help what they refer to as compatriots there.

That's deeply troubling for a potential new front in this -- Jim.

SCIUTTO: And now the question how Europe and the U.S. react to this vote, sanctions, et cetera. We will be watching for that this week. Nick Paton Walsh in Simferopol in Crimea.

Now to the mystery of that missing plane, it has now been an astounding nine days that Malaysian Airlines Flight 370 disappeared from radar screens. And despite a major search effort, including some 25 countries, there is still no sign of the wayward plane.

There is something new, though, that investigators hope will shed more light on just where the plane is now and that is a flight simulator taken yesterday from the home of the plane's captain, the pilot, Zaharie Ahmad Shah.

We have CNN's Atika Shubert in Kuala Lumpur, the capital of Malaysia, following the investigation today.

What's the significant of that flight simulator? And why are they taking it just now, nine days after the plane disappeared?

ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Well, we don't know the significance just yet. They've only just taken it and looking into it now, but it's not a secret that he had a flight simulator. In fact, he posted YouTube videos of himself showing the fact he had a homemade flight simulator that he seems to have been able to build basically at his own house with some software.

So what the police are now looking at is what exactly he used this flight simulator for. Did it, for example, follow the path that the plane ultimately seems to have taken. So that's what they're going to be looking for.

We don't know what they have found at this point. But it does seem that they are now focusing on the pilot but not only the pilot but other crew members, passengers, and even ground crew that were helping to get the plane up because they're looking to see who could have been responsible for directing the plane as it went.

Now, we don't have any answers from them as to why it took so long to search the pilot's homes. But they say now they know the plane appears to be deliberately sled down this way that's why they're looking at everybody on board.

SCIUTTO: Well, just beginning, and we also know that they're looking at passengers, the co-pilot, et cetera, as they try to figure out who took this plane on this route.

Thanks very much, Atika, in Kuala Lumpur. The interminable delay has brought great frustration to many around the world but perhaps most of all to China. Almost two-thirds of the people on board that flight were Chinese citizens, and today, Xinhua, China's state-run news agency, ran an English-language editorial that accused Malaysia of, quote, "a dereliction of duty," and went on to say that "massive efforts have been squandered."

We have CNN's David McKenzie now live from Beijing.

David, that's very strong language. Where is it coming from here? Is it coming from that frustration that these families, these relatives at home are feeling now?

DAVID MCKENZIE, CNN CORRESPONDENT: I think it comes from two places, Jim. One is, yes, those families that have been stuck in that hotel, hundreds of them, who are already boiling over in frustration. Today they had a major argument with the airline, which is taking care of them in Beijing. They're telling the airline that they refuse to go back to their homes; they're not taking any kind of stipend.

And it also comes from the Chinese government, which appears to show its limit of influence in the situation. Though China is far more powerful than Malaysia, at least privately, it appears their pressure hasn't been bearing fruit. So they've gone very public with that very bold statement saying it's a dereliction of duty and that more needs to be done by Malaysia to solve the situation, Jim.

SCIUTTO: Well, looking at that editorial as well, it wasn't just Malaysia that they directed their criticism at. They also directed it at the U.S., calling the U.S an "intelligence superpower" and wondering, in effect, why the U.S. hadn't used all of that, you know, satellite capability, et cetera, to help find the plane.

Why target the U.S. now, and how severe is that anger against Washington as well?

MCKENZIE: Well, it seems like the Chinese are pointing their finger at everyone other than themselves, Rolls Royce, the Malaysians and the U.S., as you say. China is a growing military power, but this has shown their lack of influence and investigative capability.

Of course the U.S. agencies are the ones that are taking the lead in this investigation. And, Jim, we have to look at this also domestically. China is potentially going to face a lot of criticism from its citizens. As people travel abroad, can they protect those citizens; and if something goes wrong, can they investigate that?

So, really, China is beholden to Malaysia, to the U.S. and other countries, to solve this mystery, and that doesn't look good for the Communist Party, so it makes sense for them in a way to point the fingers.

SCIUTTO: No question. The Chinese government is extremely sensitive to perception of limitations of its power, ability. And we can see that playing out here, plus, you know, certainly some understandable frustration from its citizens in how long it's taken to get some hard answers on this.

Thanks very much to our David McKenzie, very early morning there in Beijing -- a very late night, rather, there in Beijing.

There's lots more ahead on "GPS." Fareed will be back next with a look at how Russia's neighbors are responding to Moscow's aggression. He has the president of Estonia and Poland's foreign minister. That's right after this.


ZAKARIA: This week, Poland's president marked his country's 15th anniversary in NATO. He used the occasion to ask for more U.S. troops to be sent to Poland, this after a dozen American F-16s and 300 U.S. troops had already been promised.

A little further north and east and bordering Russia itself sits the Baltic nation of Estonia. Last weekend Estonian President Toomas Hendrik Ilves told President Obama that what Putin is doing in Crimea follows the same script that the Soviet Union used in the 1940s to take over Estonia.

President Ilves joins me now from Tallinn, Estonia, and Poland's foreign minister, Radek Sikorski, joins me from Warsaw.

Mr. President, let me start with you. You have a substantial Russian minority in Estonia. There have been tensions with that minority. Does what is happening in Ukraine make you worry that Russia might follow a similar strategy with your country or with other neighbors of Russia?

TOOMAS HENDRIK ILVES, PRESIDENT, ESTONIA: Well, let's be clear. Europe is full of substantial numbers of minorities, and far more than we have in Estonia. We, as one of the more liberal democracies in the world, shouldn't have to worry about these things.

I would say, however, that once you start using the argumentation used in 1938 to annex the Sudetenland, no borders in Europe are secure anymore. The Crimea has not been annexed yet, but the argumentation really is the same.

ZAKARIA: Radek Sikorski, Poland borders the area of Kaliningrad, this Russian enclave that is -- that is Russian and, in fact, is the home to Russia's Baltic fleet.

Do you think that the European Union will act in a united and firm manner with regard to what is happening in Ukraine, that is to say, to continue to not recognize any annexation and to impose sanctions on Russia?

RADEK SIKORSKI, POLAND'S FOREIGN MINISTER: Well, I don't see any freedom-loving country recognizing this patently illegal, unconstitutional referendum being carried out in haste and under the gun of a foreign -- a foreign army. But, of course, facts on the ground are being created.

ZAKARIA: But will Europe act in a united fashion, do you believe?

SIKORSKI: Well, we are all reluctant to impose sanctions because Russia will probably respond and we'll all suffer as a result. But Russia is leaving us no choice. And the European Council has decided, if there is no movement on Russia's part to correct the position, then I'm afraid we'll have no -- no choice on Monday.

ZAKARIA: Radek, regarding NATO, what would Poland want from NATO and from the United States in particular in response to this?

SIKORSKI: Well, you've alluded to some of the U.S. response, which we are glad about. Remember, we are not feeling militarily threatened as yet. It's just that we are concerned for ominous developments on the territory of an important partner of NATO. And that's why it has been important and correct to raise NATO's situational awareness. And, of course, the question remains whether Crimea is the limit or whether it's phase one, and then, of course, it could get much more serious.

ZAKARIA: President Ilves, when you look at this problem of the Russian minorities, it is not -- as you say, it's all over Europe, but it is also all over Russia's near abroad. There are 25 million ethnic Russians living all over, places like Kazakhstan. Is it your impression that those countries will now be wary -- more wary of Russia?

Because, after all, you know, if I were in Kazakhstan, all of a sudden you would be worried that, if there are tensions between -- with the Russian minority there, Moscow could decide that, in order to protect its Russian-speaking compatriots, it needed to take some kind of military action?

ILVES: Let's -- I mean, I think that there are a number of countries that are quite worried. If we look at the numbers, they're rather -- they're rather large. There are 8 million Russians in Ukraine. There are also about 11 million Ukrainians in Russia. And so it's not really an argument you want to be using too much, and that's why countries have long abandoned this kind of argumentation, because they saw the disastrous results of World War II.

ZAKARIA: What would you like to see NATO do, Mr. President?

ILVES: Well, I think the focus of NATO has been, for -- for almost two decades, conflicts outside of the NATO area, based on the premise that NATO members, alliance members themselves, don't feel that their territory is under threat. And, of course, that assumption, with the kinds of actions we have seen, have disappeared, alas.

ZAKARIA: Radek Sikorski, do you think that the annexation of Crimea is now a, kind of, de jure legitimacy; we will have to live with the reality? Or do you believe it is possible that Mr. Putin will actually reverse course?

SIKORSKI: I hope he will reverse course because, as President Ilves was saying, the precedents are terrible. I hope we've learned something from the First World War, from the Second World War and from the Cold War.

We -- Europe is a patchwork of nationalities, both in the East and in the West, and we have found ways of resolving these issues, giving maximum rights to minorities and dissolving borders so that people can happily rub along as, indeed, they have been doing in Crimea and eastern Ukraine.

Remember, not a single Russian or Russian speaker has so far been harmed. So there isn't even a pretext for everything that is being done.

ZAKARIA: President Ilves, do you want something in particular from Washington, from President Obama? What do you think Washington's role in this should be?

ILVES: Well, I -- I think we have received assurances from President Obama and from Vice President Biden. And, certainly, I think what has come home to all of us is the idea that it is now time to fixate, or rebalance, or pivot, or whatever the term one wants to use, on areas outside of Europe was unfortunately premature, that, in fact, the security situation in Europe is not resolved in the way that we thought with the peace dividend in the 1990s.

ZAKARIA: Mr. President, Mr. Foreign Minister, thank you very much for joining us.

Up next, what in the world? Why Venezuela's protesters seem to be taking orders from a man in Miami via Twitter. I will explain.


ZAKARIA: Now for our "What In the World?" segment. The protests in Ukraine and Russia's response to them have monopolized headlines, but there is one other uprising that could have a big global fallout.

I'm talking about Venezuela, where, for weeks now, demonstrations against the government have been met with violent and sometimes deadly force.

Keep an eye on that country because what happens there could have consequences across the continent and all the way to Cuba. I was surprised to read that one of the guiding lights of these protests is actually not on the ground in Caracas but more than 1,000 miles away in Miami, Florida.

Reinaldo do Santos is a self-proclaimed prophet from Brazil, and he claims that Venezuela's president will soon be out of a job. For whatever reason, his prophecies have resonated with his 1.3 million Twitter followers as he emboldened them to fight the good fight.

A fun fact: Venezuela has the fifth highest Twitter penetration in the world, according to Comscore. It's a bizarre, kooky sideshow to what is actually a very serious situation, not only for Venezuelans but for the global economy. Remember, Venezuela has the world's largest oil reserves and it is the fourth largest exporter of oil to the United States. (END VIDEO CLIP)

ZAKARIA: Despite those riches Venezuela is a basket case. There's hyperinflation, food shortages and energy crisis, violent crime and unfettered corruption.


ZAKARIA (voice-over): Venezuelans have a number of reasons to protest, but the protesters don't really have a clear sense of direction. That's why they're following tweets from a Brazilian a thousand miles away and it's unclear whom they represent.

On the one hand, you have a moderate wing of protesters, a group whose leader narrowly lost out in the last elections. These protesters are looking for minor concessions from the government as they bide their time for the next national vote.

But a more vocal, even radical wing of protesters has emerged in recent months, which have been calling for the overthrow of the president, Nicolas Maduro. These calls have, of course, been the perfect excuse for brutal government crackdown.


ZAKARIA: The background to all of this is Venezuela's silent and suffering majority. In an essay in "The New Republic," the Mexican intellectual Enrique Kraus (ph) points out that the protesters on the street are comprised mostly of the middle and upper classes.

Kraus (ph) points out that the far greater threat to the Maduro government could come from the poor if they rise up. For years, Maduro's predecessor, the populist America-bashing Hugo Chavez, cultivated lower income voters with a mix of subsidies and handouts.

But as the economy has collapsed, even they have suffered greatly. If those silent poor rise up, we could see greater turmoil.

You see, Maduro represents the policies of Chavez, but he does so without the late president's charisma and populist touch. If serious cracks in his government develop, perhaps even the army could question its loyalty.

As always with oil economies, if prices fall, all bets are off on the survival of the regime. And if Venezuela implodes, it would trigger a massive regional crisis. Cuba, which is essentially bankrolled by Venezuelan largesse, would probably collapse.

Other populace regimes like those in Ecuador and Bolivia would also suffer a loss of aid.


ZAKARIA: If, under pressure, Venezuela somehow moves toward real democracy, that, too, would have ripple effects across the region and in Cuba. So while you watch the crisis in Ukraine, think about the protesters in Venezuela, who are demanding the very same things as those brave souls in the Maidan.

Up next, a mystery in another oil economy: tens of billions of dollars are alleged to have disappeared from one African nation's coffers.

What happened?

I will ask that country's finance minister.



ZAKARIA (voice-over): If $20 billion were to go missing from the United States Treasury, people in Washington would certainly sit up and wonder what happened and heads would roll.


ZAKARIA: Now imagine if that sum of money disappeared from an economy that is just 1.6 percent the size of America's.


ZAKARIA (voice-over): That actually happened in Nigeria. And there's a twist. So when Lamido Sanusi, Nigeria's central banker, their chairman of the Fed and a well-respected economist, sounded the alarm that $20 billion had gone missing, what really happened was that he got suspended.

Why? Well, that's what I asked Nigeria's finance minister when she came to New York this week.

Ngozi Okonjo-Iweala knows Sanusi well. She's also a former managing director of the World Bank and is the author of "Reforming the Unreformable: Lessons from Nigeria."


ZAKARIA: Listen in to our conversation. I began by asking her why the central banker was suspended for blowing the whistle.


NGOZI OKONJO-IWEALA, NIGERIAN FINANCE MINISTER: I believe that when you find problems, you should also find solutions. I think the problem began the first time when he said that the amount that was -- he never said it was stolen. He said it was unaccounted for, was $49.8 billion.

And he wrote a letter to the president; he called me a couple of days after, to say I've written this letter. And my first reaction was, that's not possible. We couldn't be missing $50 billion as finance minister in this country. We wouldn't be able to function because that's too high a hit. Everybody would know it and feel it in the economy.

ZAKARIA: There is some substantial gap.


ZAKARIA: Right? I mean --


ZAKARIA: -- the World Bank, I think when you were one of the managing directors, issued a report on the Nigerian economy in which it said hundreds of billions of dollars over the past 30 or 40 years have been siphoned off. And so this would be a perfect example of precisely this kind of siphoning off.

OKONJO-IWEALA: No. I think we should hold our horses a little bit. Sanusi please ask him never said the money had been siphoned off. He said it was unaccounted for.

And hold on. There's a difference, because when he alleged $49.8 billion -- and this was looked at, it was found that some of that money had really been remitted to the tax agency directly and his people were not aware of it.

So $16 billion was immediately accounted for that, you know, they didn't seem to know the accounting mode of the agency, so that's what I'm saying.

But there has been -- there's no doubt that Nigerians feel suspicious of the oil sector, that it has been regarded as opaque over the years and this is not an issue, you know, whether it's $10.8 billion, whether it's $1, you know, we can't afford to lose any money from the treasury.

ZAKARIA: But then why fire the central banker, a respected central banker?

OKOJO-IWEALA: You know, Fareed, what I would like to do is perhaps focus on the economy, because I don't think I want to get into this issue of firing/not firing. He's still governor of the central bank. He has been suspended. He hasn't been fired.

But I think we need to focus on the central issue, which is no one dollar should be lost from the treasury. Any money that belongs to it must be remitted. That's what we're insisting.

And the president, we pushed for -- he has ordered one yesterday, that there should be a forensic audit to determine where these moneys, that what is unaccounted for, is it the $10.8 billion that we are saying from the accounts?

We've been working on this for two years.

And you know, is it $50 billion? Is it $20 billion? Is it $12 billion? What is the amount? We need to know for the sake of the Nigerian people and he has ordered that. So we want it to be independent; we want it to be well done, so that we can lay it to rest.

ZAKARIA: So how do we -- how do you solve the problem of corruption?

You've been in government twice. You have a reputation for being extremely honest.

What would you do, if you had a magic wand, if you were president, what would you do to get Nigeria to get this cancer out of its system?

OKOJO-IWEALA: Well, you know, Fareed, you know with that, there are no easy answers. But there's one thing I want to say and repeat. No one can fight corruption for Nigerians except Nigerians. Everyone has to be committed from the top to the bottom to fight it.

And I think there are two key things that need to be done all along, and it's not just in Nigeria. It's in many developing countries that you need to do this.

But in our country, you need to, coupled with -- by all means pursue those who are corrupt, punish them, you know, make sure there's no impunity. But that has to be coupled with something which doesn't get as much attention, which is building institutions. It's unglamorous; it's work that takes time, but we have to do it. We have to put it in place.

ZAKARIA: I have to ask you a question that is not part of directly your portfolio, but it is your government.

Nigeria has always had laws banning homosexuality. But you advanced a further law which criminalized it so that somebody who is gay would have to spend 14 years in prison.

You also have passed -- the law says that people who are in some way promoting gay clubs or gay discussion would be imprisoned for 10 years. This seems an assault on a minority's rights. It also seems an assault on free speech.

Why is Nigeria doing this?

OKOJO-IWEALA: Well, let me say this, Fareed, that, you know, we're here in the U.S. And it took 40 to 50 years or more under conversation of, you know, the gay community to get where the U.S. is.

I think that, you know, we need a conversation in the country. We need evolution. Ninety-six percent of people support these laws, but I think we need to unpack the laws, for them to see, you know, between being a gay person and between same-sex marriage because the two are compounded in people's minds and there's a strong sentiment against same-sex marriage, just as you had here before.

And it's still evolving. I think it's a question of conversation, discussion, evolution, education and engagement over time, just as happened in this country and in Europe. It's not something that happened overnight. So I would say withhold judgment and let us work on this.

ZAKARIA: Madam Finance Minister, pleasure to have you on.

OKOJO-IWEALA: Thank you.

ZAKARIA: And we will be back.


ZAKARIA: We often talk about how to be successful in education and our careers and our lives. Well, my next guest says that it's all well and good but the most important thing right from childhood is to learn how to fail.


Megan McArdle is a columnist for "Bloomberg View" and she's the author of a new book, "The Up Side of Down: Why Failing Well Is the Key to Success."

Listen to what she found.


MEGAN MCARDLE, COLUMNIST AND AUTHOR: The idea is not just to fail at things for the sake of failing. The idea is to take calculated risks and then to figure out what went wrong, because that's actually the most valuable piece of information that you can have, right?

There's a great story about Thomas Edison, who was asked, how does it feel to have failed to make an incandescent light bulb about halfway through his journey to inventing a light bulb. And he said, what do you mean failed? I have found 10,000 things that don't make good filaments for incandescent light bulbs.

That actually really is a how a surprising number of things get found out in the marketplace.

ZAKARIA: And you think what's important is an atmosphere which allows that failure to happen?

You contrast the United States with Denmark, which is interesting, because it's a European country you think of as being, you know, this is Northern Europe; that's always successful and portrayed as such, but you say that there's still a big difference, that there is a stigma attached in Denmark versus the United States?

MCARDLE: In Europe -- and it varies by country, but there's less of a thought that when someone has been the head of a company and it's gone down, you know, that could have happened to anyone, that the important thing was to try and that we admire the resourcefulness of people who do strike out on their own. And so what you see in Europe -- and they're trying to fix this -- is lower rates of entrepreneurship. It's also an institutional problem now and I looked at a Danish entrepreneur who, 10 years ago, had a big business setback.

And because of Denmark's bankruptcy system, he can't get rid of the debt that he accumulated during that time. His debt is basically the same size as it was 10 years ago. And he -- instead of going out, starting a new venture, starting over, he's struggling to pay off that old debt.

It might be good for his bankers, although I even question that, but it's certainly not good for him and it's not good for the economy.

ZAKARIA: But you point out, in the United States, there is one troubling thing, which is the long-term unemployed seem to be long- term unemployed in some cases, significant cases, because they're not taking the risk of taking a job that doesn't seem right for them. You know, they're not -- they're waiting for the perfect job.

MCARDLE: Yes. What we've seen in America over the last five years is long-term unemployment rates that are looking a lot more like European long-term unemployment rates have been.

People who -- and when you look at studies of these people, what you're seeing is they're not spending enough time on their job search, they're not willing to lower the wage that they'll accept and they're not moving as much as Americans used to.

And those are huge mistakes right now, because what we know from surveys of firms and doing studies with resumes is that once you've been out of work for six months it's really hard to get back in. Employers really discount those resumes.

So a better strategy is to lower your wage early, lower the amount that you're willing to accept and say, you know what, I can work up to it later. That's what I did 10 years ago when I was laid off after a business school, I basically took a job that paid a third of what I was expecting and then worked back towards -- you know, I'll probably never make big management consulting money but work back towards something where I was living pretty comfortably.

But people are really reluctant to do that. You know, humans are what economists call philosophers. Once we've had something, it's so hard to admit that it didn't work. And that's why you see gamblers going back and trying to double down at the casino, trying to win back their money even though they, of all people, should know that the house always wins in the end.

ZAKARIA: What's the most important failure you've learned from?

MCARDLE: Ah, there's so many. I would say that the biggest one was actually being unemployed for two years. In the first place, it wasn't exactly my failure, because I got laid off with my whole associate class. But then I didn't do the right thing. I had a temporary job, working down at the World Trade Center Disaster Recovery site and while I am very glad I did it, I didn't -- I let that job take over and I didn't start looking for a job quickly enough, which put me in the same position as a lot of today's unemployed people.

Eventually, though, I did do the right thing, which was that I started flailing. I did a lot of -- I tried a lot of things. I had a small business consulting group, I was doing some I.T. consulting and I had a blog that I'd started while working down there.

And I started freelancing some economics articles and eventually I got a job with "The Economist," and had had the most amazing, lucky career for the last 12 years. So that is what you see from people who do get back on their feet, is that they just kept going.

ZAKARIA: Well, here's hoping that was the last time you'll have to learn from failure. Megan --

MCARDLE: Probably not, but let's hope I learn from it.

ZAKARIA: Pleasure to have you on.



ZAKARIA (voice-over): Up next, miracles come in many forms. This one appeared as a tree. Yes, a tree. I will explain.



ZAKARIA: President Obama traded insults with Zach Galifianakis this week on the "Funny or Die" Internet show, "Between Two Ferns."

ZACH GALIFIANAKIS, COMEDIAN: What is it like to be the last black president?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Seriously? What's it like for this to be the last time you ever talk to a president?


ZAKARIA: That brings me to my question of the week.

Which of the following countries has a law against insulting its leader?

Is it Poland, Turkey, the Netherlands or Thailand?

Stay tuned and we'll tell you the correct answer.

This week's book of the week is Zachary Karabell's "The Leading Indicators: A Short History of the Numbers that Rule Our World." This is a clever, entertaining and intelligent book that dissects the many statistics that we all rely on: GDP, unemployment, deficits. And it shows us how unreliable they all are, a very fun read.

Now for the last look.


ZAKARIA (voice-over): Three years ago this week, a 9.0 magnitude earthquake struck the coast of northern Japan, unleashing the largest tsunami in the country's history. Traveling as fast as a jet plane, the wave reached an astounding 132.5 feet high. That's roughly the height of Rio's Christ the Redeemer statue.

Over 18,000 people lost their lives. Coastal communities were decimated. And the most serious nuclear crisis since Chernobyl ensued. In one town on Japan's northeast coast, only a handful of buildings remained standing when the water receded.

A forest of 70,000 trees, trees that had protected the town for hundreds of years, were lost. All that is, but one.

This pine tree was the only one to survives the massive wave. It became known as the miracle pine, a symbol of hope for the devastated community. When saltwater threatened its life in 2012, the 270-year- old, 88-foot tree was cut down, hollowed out and preserved. It was then erected in the same spot, now serving as a memorial to the tsunami victims.

Radioactive water from Fukushima is still said to be periodically leaking into the Pacific; 100,000 people are still living in temporary housing. And Japanese Prime Minister Shinzo Abe said this week he would not let the disaster fade from memory. This tree won't let it.

The correct answer is actually A, B, C and D. In Poland, publicly insulting the president could land you in prison for three years; in Turkey, you could face up to four years; in the Netherlands, believe it or not, insulting the monarch could land you in jail for five years.

All of those punishments are preferable to the 15 years you would receive in Thailand.

Perhaps these leaders should learn to take a punch.

Traffic to increased by 40 percent the day after Obama's appearance.


Thanks to all of you for being part of my program this week. I will see you next week.