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FAREED ZAKARIA GPS

President Obama Lays Out Foreign Policy Plan; Ukraine Elects New President

Aired June 1, 2014 - 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.

A big week for American foreign policy, from Obama's speech --

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: America must always lead on the world stage.

(END VIDEO CLIP)

ZAKARIA: -- to Edward Snowden to the European elections. I have a great panel, David Ignatius, Nick Kristof, Chrystia Freeland, and Dan Senor.

Next. Could Afghanistan actually turn out to be a success? I will give you my case for optimism.

Also, from what to have for dinner and how to fix global warming, a revolutionary new way to solve problems from the Freakonomics guys, Steven Levitt and Stephen Dubner.

And a woman who went from shoplifting, anti-capitalist to founder and CEO of a major retailer. This self-proclaimed girl boss has great advice to help you succeed.

But first here's my take. Let me read you something from a well-known analyst of American foreign policy. He wrote, "Because of unsure and indecisive leadership in the field of foreign policy, questions have been raised on all sides." The right added that the administration is, "plagued by a Hamlet-like psychosis which seems to paralyze it every time decisive action is required."

Is this one of the many recent critiques of Barack Obama's foreign policy? Actually, it is Richard Nixon writing about President John F. Kennedy in 1961.

Criticizing presidents for weakness is a standard trope in Washington because the world is a messy place, and when bad things happen, Washington and the president can easily be blamed for them. But to determine what America and Obama should be doing, let's first try to understand the nature of the world and the dangers within it. From 1947 until 1990, the United States faced a mortal threat, an enemy that was strategic, political, military and ideological. Washington had to keep together an alliance that faced up to the foe and persuade countries in the middle not to give in. This meant that concerns about resolve and credibility were paramount. But the world today looks very different, far more peaceful and stable than at any point in several centuries.

The United States faces no enemy anywhere on the scale of Soviet Russia. America's military spending is about that of the next 14 countries combined, most of which are treaty allies of Washington.

The countries that have been aggressive or acted as Washington's adversaries are facing a tough environment. Look at Russia, China and Iran. In this context, what is needed from Washington is not another heroic exertion of American military power but rather a sustained effort to engage with allies, isolate enemies, support free markets and Democratic values and push these positive trends forward.

The Obama administration is, in fact, deeply internationalist, building on alliances in Europe and Asia, working with institutions like the IMF and U.N., isolating adversaries and strengthening the international order that has proved so beneficial to the United States and the world since 1945.

All the while it has fought al Qaeda and its allies ferociously. But the administration has been disciplined about the use of force and understandably so. An America that exaggerates threats, overreacts to problems and intervenes unilaterally would produce the very damage to its credibility that people are worried about.

After all, just six years ago, America's closest allies were distancing themselves from Washington because it was seen as aggressive, expansionist and militaristic.

Obama is battling a knee-jerk sentiment in Washington that the only kind of international leadership that means anything is the use of military force.

"Just because we have the best hammer does not mean every problem is a nail," he said in his speech at West Point. A similar sentiment was expressed in the farewell address of President Eisenhower, a strong leader who refused to intervene in the Suez crisis, the French collapse in Vietnam, two Taiwan Straits confrontations and the Hungarian uprising of 1956.

At the time many critics blasted the president for his passivity and wished that he would be more interventionist. A Democratic Advisory Council headed by Dean Acheson called Eisenhower's foreign policy, quote, "weak, vacillating and tardy." But Eisenhower kept his powder dry, confident that force was not the only way to show strength. He told his speechwriter, I'll tell you what leadership is. It's persuasion and conciliation and education and patience. It's long, slow, tough work. That's the only kind of leadership I know or believe in or will practice."

For more go to CNN.com/fareed and read my "Washington Post" column for this week. And let's get started.

You heard my take on the president's foreign policy, now let me bring in my panel. David Ignatius is a columnist for the "Washington Post" and perhaps more importantly the author of a new novel out Tuesday called "The Director." It is one of his fantastic thrillers informed by 25 years of covering the CIA.

Nicholas Kristof is a columnist for the "New York Times." Of course he's just back from Burma.

Chrystia Freeland is a former top editor of the FDN Reuters now a member of Canada's parliament. She is just back from Ukraine.

And Dan Senor is the co-founder of the Foreign Policy Initiative and was a key adviser to the Romney campaign.

So, Dan, let me give you first dibs, the case for the opposition. Tell me why Obama's speech was terrible.

DAN SENOR, CO-FOUNDER, THE FOREIGN POLICY INITIATIVE: Well, at first, I think he set up the straw man, the notion that anyone who's a critique of his policy just wants to go to war. My response is, point me to that person. Most people who -- been critics and advocated a more muscular approach to more forward-leaning approach to the president's foreign policy have advocated for some mix of covert operations and air power. It's what worked in the Balkans when Clinton did it, it's what worked in Libya when Obama did it. It's worked in the beginning of Afghanistan when President George W. Bush did it.

ZAKARIA: And on Afghanistan, the day before, what do you think of the two-year extension?

SENOR: I mean, I -- I would personally leave 10,000 troops there beyond 2016, let the president's successor decide whether or not he or she wants to bring down those troop levels. I think going back to basically zero, I mean, just enough forces to protect the embassy, leaves his successor with very few options. So I had a problem with it.

Also, he didn't really lay out -- what actually is changed? Why did he actually increase the troops and why is now the time to decrease them? It's not clear. Conditions on the ground have changed dramatically. It's not -- the strategy wasn't clear.

ZAKARIA: Nick, what do you think on Afghanistan? I mean, if we stay until 2016, we would have stayed 15 years. I mean it's a long --

NICHOLAS KRISTOF, COLUMNIST, THE NEW YORK TIMES: Substantially longer than other wars. You know, I worry about Afghanistan after we pull out, I worry about the role of women, about education, about all kinds of things. But at the end of the day, I don't think our troops have been particularly effective in advancing the interest of either ourselves or the Afghan people, and basically been enormously expensive in every possible way, so I think it was probably the right call. ZAKARIA: David, one of the things he did talk about in his speech was counterterrorism and a new approach of a $5 billion fund, and the idea, as I understand it, is we have all these threats around the world, but they're smaller, diffuse, diverse, not all al Qaeda central. So what I'm going to do is tell the CIA and the military to help other countries that they've battled in.

What do you -- I mean, you know the CIA backwards and forwards. What does this mean for the United States?

DAVID IGNATIUS, AUTHOR, "THE DIRECTOR": Well, I thought that was one of the more creative parts of the speech. He's recognizing that despite the rhetoric that the Obama campaign used in 2012, al Qaeda isn't dead. Core al Qaeda and Pakistan and Afghanistan, maybe, but it's morphed and these small offshoots are very dangerous. Al Qaeda has now embedded itself so deeply in the Euphrates Valley from Raqqah and northeast Syria, all the way to Fallujah.

At the gates of the Baghdad Airport but it's a big counterterrorism challenge to get them out. What was new in the speech was first this idea of creating a fund so that you'll have a resource to provide security systems for security services. All over they're having al Qaeda problems.

Final thing that's interesting in the speech, the president just hinted at it but talking with people you get more of a sense. The president would like to move the counterterrorism program more toward the uniformed military and away from the CIA.

ZAKARIA: Why?

IGNATIUS: Because first there is a feeling that the CT mission has eaten the CIA hole. The Counterterrorism Center, the drone program --

ZAKARIA: Because the CIA is becoming too much a kind of armed --

IGNATIUS: Yes --

ZAKARIA: Insurgency operations there.

IGNATIUS: I mean I've read that it's --

ZAKARIA: Rather than --

(CROSSTALK)

IGNATIUS: These have been the murder incorporated days for the CIA, and that's not their job. Their job is to collect foreign intelligence fundamentally.

ZAKARIA: Nick, you spent a lot of time in these countries like Mali and Somalia. What do you think on the ground the effect of the CIA being in cahoots with the government or the military being into cahoots with it?

KRISTOF: You know, I think the military to a box can be useful and that there are times when we can usefully train local authorities. One of the problems has been that if you are a local leader in a place like Mauritania, you can say -- you can present yourself as being anti-terrorist, anti-Al Qaeda, you can monetize that with U.S. government and get a lot of money, which you can then take 10 percent of, and a lot of equipment. And then use it in ways that at times, actually antagonize local population and make them more sympathetic to al Qaeda.

So, you know, I think it has to be done on an ad hoc basis, very much listening to local people, and if it's done in that sensitive way it can be useful but it has to be done really cautiously.

ZAKARIA: Chrystia, 30 seconds on all this and then I'm going to come back to you after the break. But you have -- you have any thoughts on any of all --

CHRYSTIA FREELAND, MEMBER OF PARLIAMENT, CANADA: Yes, no, I pretty much agree with Nick. I mean, I was thinking about Tolstoy, you know, happy families are all alike, unhappy families are unique in their unhappiness, and that's what the world is like today. It's not a monolithic threat. We're actually going to have to learn about each country and what's going on.

And that -- I think people find that hard. Like it was nicer in some way, intellectually in the cold war when you could say, these are the good guys, these are the bad guys, this is how we do it. We're actually going to have to engage, talk to people, figure out what's happening in every country.

ZAKARIA: And even al Qaeda was all one big thing, but now each of these is in a different circumstance and different country.

All right. We've got to take a break. When we come back, we have lots to talk about. Chrystia will give us a report from Ukraine. I've got to ask about Edward Snowden and European elections. Dan Senor is going to tell us why the Republicans have to pay very close attention, when we come back.

(COMMERCIAL BREAK)

ZAKARIA: We are back with our panel. David Ignatius, Nick Kristof, Chrystia Freeland, and Dan Senor.

Chrystia, you're just back from Ukraine. What is the most thing -- there is so much reporting out there, what struck you when you were there?

FREELAND: OK. Three top takeaways. The first thing that was really striking is the people of Ukraine, 90 percent of Ukraine, are really united, really determined, united around building a democracy from the ground up around the Western choice, around their new president.

The second really big thing which we've talked about before is this idea that the Kremlin was really pushing of there being this specter of a far-right threat in Ukraine. The election really demolished that. The two far-right candidates got 1 percent each. And meanwhile, there was a Jewish candidate, independent candidate, who leads one of the big Jewish organizations in the country, he got 2 percent.

So we really have to put that to bed and understand that that was something the Kremlin was pushing. Really not part of what's happening in Ukraine right now.

ZAKARIA: So it left you feeling quite optimistic.

FREELAND: With the exception of Donbas where the fighting is happening right now. And I was in Donetsk before the big fighting broke out, and I was struck by the extent to which state power in about 60 percent of that region has just melted away. In that area I think it's very hard to predict what's going to happen and really dangerous.

ZAKARIA: Your colleague, Tom Friedman, says Putin blinked. That if you look at what's happened, Putin has -- you know, he's no longer trying to take over eastern Ukraine, he's accepted the new government, he realizes he's going to have to cut a deal?

KRISTOF: I mean, it would be nice if he ducked a little more, but I mean, indeed it's more promising than it looked a month ago. It looks like he's going to hang onto Crimea, it looks like he's not going to wade into southern Ukraine and march into part of, you know, Moldova, for example, as it seemed he might. So, you know, for now I'd say things are a little -- and it looks like Poroshenko may be able to unite the country and indeed, you know, sort of align the country more. So indeed things, I think, are more encouraging now than they were before.

ZAKARIA: What did you think of Edward Snowden's interview, and what did you make of it? And you know the NSA, the book has a lot about the NSA.

IGNATIUS: Well, this new novel, the director is about the collision of hacking and espionage which Snowden has come to symbolize. I thought his interview with Brian Williams on NBC this week was fascinating. And one way to read it is the opening of a plea negotiation in which he's saying, you know, I'll come home, I'll plead to lesser charges. There's a suggestion he might even serve a short prison sentence, but the insistence I did nothing wrong, I'm a patriot, I was serving the constitution.

ZAKARIA: And the vanity that he was actually very, very important and a spy.

SENOR: Yes. I was a spy.

(CROSSTALK)

IGNATIUS: He's a person who really needs to show the world that he's important. Sort of touting his spy credentials. I wasn't a low-level analyst. It was almost as if, we're more important and dangerous than you think.

SENOR: I use fake names.

(LAUGHTER)

SENOR: I think the --

ZAKARIA: I was thinking to myself, you're world famous, what difference does it make --

IGNATIUS: Right.

(LAUGHTER)

ZAKARIA: You know, what classification you had? It's now irrelevant, you're one of the most famous people in the world.

IGNATIUS: The issue that we're all going to struggle with that -- in this book is how we and how U.S. intelligence agencies are going to live in a world where -- this is a post-Snowden novel. We live in a world now where these secrets that used to be the most precious secrets the United States government had have been exposed willy- nilly.

What's the damage of that? It can be -- again it can be by another Snowden. What's the damage of that? We really don't know.

ZAKARIA: The European elections, I mean, really startling and even though this is not a particularly powerful body, you had between 20 percent to 40 percent in some cases of the electorate voting for populist, anti-European, often pro-Putin elements, and this is happening in France. This is big countries, not small, remote things. You say it's very important.

SENOR: Yes, I'm worried about it. I mean, if you just look at the U.K., the United -- U.K. Independence Party came in first, beat out Labour and the Tories. In France, they did well, Le Pen's party. The second and third largest economies in the continent. If you look at their -- the themes of their campaigns, it's obviously deeply anti- immigrant, it's anti-globalization and it's anti-elite, which is, you know, Brussels.

There is a lot of that rhetoric in American politics today on the right. And I've not seen the Republican leadership in this country develop yet a real middle-class oriented populist conservative reform agenda. And if they don't do it now -- I'm not saying we're going to have a crack up on the right here that we've had in Europe, but we should paying close attention. Mainstream conservative parties, right of center parties in the U.S. and throughout the West should be paying attention to what transpired in Europe over those last week because there's something real going on.

(CROSSTALK)

ZAKARIA: You talk a lot about this in your writings, about the inequality and globalization.

FREELAND: Yes -- no, I totally agree with Dan. I mean, to me this is the hollowed-out, middle class vote. And we're seeing it -- we've seen it in the states, we're seeing it now in Europe. And I think it's not even just a question for the right, I think it's a question for all political elites, and I think we have to be really be much more thoughtful about the extent to which people who are in the middle are really being hammered and we have to work really hard to put together -- first of all, to listen and be aware of that far and sensitive to that, and second of all, to put together some policies that address it. Otherwise the dangers of extremism, I think, are just huge.

ZAKARIA: On that note, we're going to have to stop. When we come back, I'm going to delve deeper into the future of Afghanistan. Is it possible that this nation that has been at war for 30 years might actually have a brighter future? I'll give you the evidence for optimism, when we come back.

(COMMERCIAL BREAK)

ZAKARIA: And now for our "What in the World" segment. As U.S. troops prepare to withdraw from Afghanistan, Afghans are preparing to usher in their own new era. Soon the nation could witness its first ever democratic handover of power.

So what if I told you that Afghanistan seems poised to effectively navigate this transition? In other words, what if I told you that Afghanistan could actually work out?

Almost two months ago, Afghans headed to the polls in record numbers. The election went remarkably well. Afghan security forces performed better than anyone expected. There were few reports of ballot stuffing or corruption that had marred the 2009 election of Hamid Karzai.

Since no candidate secured more than 50 percent of the vote, there will be a runoff in June. And two front-runners have emerged. Guess what? They're both great. Highly qualified, modern, reformist and articulate.

Compare them to the hardlined Shiite thugs running Iraq, and you will see a world of difference. Abdullah Abdullah, a former leader in the anti-Taliban northern alliance and a trained ophthalmologist secured 45 percent of the vote. Ashraf Gghani, a former World Bank economist, garnered nearly 32 percent of the vote.

Honestly, either would make a significant improvement for the future of Afghanistan and for Afghan-U.S. relations.

I interviewed both men and was struck by how much they agreed on and how different they were from Karzai. First let's consider the Bilateral Security Agreement. The BSA would allow American forces to remain in Afghanistan after 2014. Karzai first negotiated it, but ever since he's refused to sign it.

Here's the front runner Abdullah on the BSA.

(BEGIN VIDEO CLIP) ABDULLAH ABDULLAH, AFGHAN CANDIDATE: It has to be signed and it will be one of the priorities of the future government of Afghanistan.

(END VIDEO CLIP)

ZAKARIA: And here is Ghani.

(BEGIN VIDEO CLIP)

ASHRAF GGHANI: I'm on record that I will sign the agreement within the first week of being elected. I have weighed every word and consider it to be both in Afghanistan, in the United States and in the global interest.

(END VIDEO CLIP)

ZAKARIA: As for whether the leading candidates would bring the Taliban into the political process to help broker some sort of a peace deal, listen again to what they had to say. Here's Abdullah Abdullah.

(BEGIN VIDEO CLIP)

ABDULLAH: Absolutely. The continuation of the talks to the Taliban of keeping the door open for negotiations with the Taliban with a clear parameter and clear goals, it's important.

(END VIDEO CLIP)

ZAKARIA: And here's Ashraf Ghani.

(BEGIN VIDEO CLIP)

GHANI: The Talibans who are Afghans first must make a choice and we hope that they will make that choice to sit down and discuss all key issues.

(END VIDEO CLIP)

ZAKARIA: Both candidates are also less anti-American, decidedly so than their predecessor. Abdullah refutes Karzai's claim that American forces have wantonly and deliberately destroyed Afghan villages and killed its civilians.

(BEGIN VIDEO CLIP)

ABDULLAH: I'm not of their opinion that those very unfortunately traffic incidents are deliberate or the result of deliberate target in those civilians. There is no way that that could be the case.

(END VIDEO CLIP)

ZAKARIA: Ghani, a U.S. citizen until he gave up his passport to run for the Afghan presidency in 2009, largely agrees.

(BEGIN VIDEO CLIP) GHANI: The overwhelming majority of the American troops in Afghanistan are not going to be in combat throes. End with this new context and be a definition of the role, civilian casualties and related incidences that will convey an unfortunate but important product of the troops engaged and combat would disappear.

(END VIDEO CLIP)

ZAKARIA: Of course, it remains to be seen what the eventual victor actually does when he gets into office, but it all sounds promising and very different from Iraq.

(BEGIN VIDEO CLIP)

OBAMA: Good afternoon, everybody.

(END VIDEO CLIP)

ZAKARIA: So Obama's announcement and the candidates' willingness to sign the agreement to keep American troops there means that Afghanistan has a two-year head start. Afghanistan has two years to start developing a viable plan to engage in diplomacy with its neighbors and to start putting the institutions and mechanisms in place to create a sustainable independent future. Barnett Rubin, the director of studies at NYU Center on International Cooperation and a great Afghan scholar points out that if the Taliban is fighting to get U.S. troops to leave, they will now have no longer have reason to fight and they should start living peacefully with their fellow Afghans. If it is only an excuse for another agenda, then they will now be exposed. And the fact that the U.S. will not have a military base in the heart of Afghanistan in perpetuity should make regional powers, like Russia and China, more willing to support the new Afghan state. My optimism is mixed with caution, of course. But after 30 years of civil war in Afghanistan, it's a pleasure to be able to even have a qualified sense of hope for the country and for its people. If you want to hear the Afghan presidential frontrunners Abdullah and Ghani on all the issues, go to our website, cnn.com/Fareed.

Next on GPS, problem-solving disrupted. A new way to think about life's conundrums from our old friends at Freakonomics.

(COMMERCIAL BREAK)

ZAKARIA: How do you solve the big problems in your life at work or at home? Well, my next guests say the way to do it is to think like a freak, by which they mean think like them. Steven Levitt, an economist and Stephen Dubner, a writer, are better known as the Freakonomics guys, and they have just published their third book, really interesting like the first two, this one is called, think like a freak.

So, what you really mean is think like a child. Why?

STEPHEN DUBNER, CO-AUTHOR "THINK LIKE A FREAK": Yeah, I was going to say, you don't really want to think like us necessarily, that can get you in a lot of trouble. You can say things that will make you not so practically (ph), but yeah, thinking like a child, for instance, is a great way to start. Children have this natural curiosity. They have a passion for what they're passionate about. They're also - you know, they'll come up with questions that most of us would think are not sophisticated or smart enough. So really, thinking like a freak is really about trying to get rid of your preconceptions, stop pretending you know all the answers, be willing to say I don't know, go in search of data that lets you answer questions. Don't use your moral compass to make all your decisions. You know, we all have a moral compass, it's very valuable, but if you make big decisions based on what you think is right or should be right you'll often miss the reality.

ZAKARIA: So, sort of start afresh. And you have an example of a hot dog eating contest where you kind of redefined the contest, right?

STEVE LEVITT: Exactly so. Takeru Kobayashi showed up at the Coney Island hot dog contest, and the world record was 25 hot dogs. He put the - he was an economics major, and he put the ideas of we are talking about here. And he broke it down. So, he started by redefining the question. Everyone else was trying to figure out how to eat more hot dogs. Could they stretch out their stomach by drinking water or fasting and bingeing? And he asked a slightly different question which was, how can I eat a single hot dog more efficiently and faster? And so, he realized he should separate the bun and the dog, he should tear the dog - and he came out there and he doubled the world record from 25 to 50 hot dogs in 12 minutes. You know, it was an unbelievable change and it's equivalent of Usain Bolt running the 100 meter dash in 4.7 seconds, which is what Dubner says between a taxi and a cheetah.

DUBNER: Taxi and a cheetah (INAUDIBLE) on what the traffic is like in New York City.

ZAKARIA: Part of what helped him was that he didn't worry about what the previous record was and things like that. And you say that we could all do this with something as simple as pushups. So explain.

DUBNER: Yes. I think - so, a very, very simple example of this is let's say you were out of shape, which you don't look like you are, but let's pretend you're really out of shape and you say, you know, I want to do something - let me do some push-ups today. And I get down, and I think, how many I'm going to do? Let me try ten. And once you set that top in your mind, you get down, and when you start getting tired, when you are doing ten, probably seven or eight, mentally, physically tired. Now, imagine you the same person decided, I'm going to do 20. When do you start to get mentally and physically tired? Not around seven or eight. You'll blow right through ten before you realize how out of shape you are. So that's why we suggest that people figure out which limits or barriers are artificial and ignore them, throw them away.

ZAKARIA: One of the other things you say is think small. What does that mean?

DUBNER: We write about these economists who wanted to help education like a lot of people do, and they were in China doing some research and they noticed something very small, which was that if you look at a class picture of these kids in Gung Su province in China, which is rural and poor generally, none of the kids were wearing glasses. And they thought well, that's either because they need them and they don't have them or there, you know, there's no myopia here. And so they did some tests and they found there was plenty of myopia, plenty of kids needed them, but they didn't have them. So, they thought let's run an experiment. Just take something as simple as providing free glasses. Half the kids they gave them to, the other half they left as a control group, they left them as is. And after one year, the kids who got the glasses were basically a full grade ahead. Does that solve the education problem? Of course not. But it's an example of how whoever is out there hearing this, whatever realm they're working on, if you peel off a small piece where you can actually get data, figure out what's going on, you can make some progress. I would rather have 100 smart people working on small versions of one big problem than 100 people shouting at each other about the big problem and getting nowhere.

ZAKARIA: One other thing you talk about a lot is incentives. Economists always talk about this. The idea is human beings are in some sense rational and that we maximize and if you put incentives in place, we are going to do things that get us what we want. Your example about the child and M&Ms. I want you to tell it and then tell me, are you - do you really think we should be bribing our children to go to the bathroom?

DUBNER: Well, this was - I should let Levitt talk about it. This was his kid. It was a massive failure. So let me just - by saying that even if a very great (ph) economist tries to bribe the kid, it ends up backfiring. It's a lesson for all of us.

ZAKARIA: Don't try this at home.

LEVITT: So, my daughter was three. She had been potty trained. She had lost that potty training. My wife had done everything she could imagine - couldn't make it work, and I just, you know, I had the attitude of an economist. Look, every problem that's important, you can solve with incentives. So, I said to her, let me take over. And I got down on my daughter's level. I looked her right in the eye - and her name is Amanda -- I said, Amanda, every time you go pee-pee in the potty, I'll give you M&M. I knew M&Ms were the things she really, really liked the most. And she said, really? Well, why don't I go right now? I said, OK, let's do it. She goes right to the bathroom and goes in there. I give her the M&Ms. I brag to my wife. And for the next two or three days, perfection. Not one accident. And then on the third day she said, Daddy, I have to go. She goes to the bathroom, she pees, she comes back out, M&Ms. One minute later, Daddy, I have to go again.

(LAUGHTER)

LEVITT: Goes back in the bathroom, pees again. And it turned out this girl who couldn't make it to the toilet to save her life three days earlier had such incredibly fine bladder control now that she could turn it on and off for M&M. And I thought it was a great example because what I always tell people is that with your lawmaker, an economist, whoever, you set up these incentive schemes. You think you're smart enough, you think you've thought ahead of time, but people are going to outsmart you.

ZAKARIA: That's a good nontuendo (ph).

DUBNER: Thank you so much for having us.

ZAKARIA: Thank you so much. Pleasure to have you on.

Up next, how does a shoplifting community college dropout become a big-time CEO of a booming business? The amazing story of a self-pro claimed girl boss when we come back.

(COMMERCIAL BREAK)

ZAKARIA: We are in the midst of graduation season overflowing as always with advice on how we should live our lives. My next guest may not be a commencement speaker this year, but she has some unique advice especially for Millennials and for the rest of us as well. A decade ago, Sophia Amoruso was a dumpster diving, shoplifting anti- capitalist community college dropout with a clinical diagnosis of attention deficit disorder. Today she is the CEO of a company that does more than $100 million in business annually and she owns a white Porsche. How did that transformation happen? It's a fascinating story with many lessons learned. Sophia is the founder of the online clothing store Nasty Gal and the author of a new book "# Girlboss." Welcome.

SOPHIA AMORUSO, FOUNDER & CEO NASTY GAL: Thanks you for having me.

ZAKARIA: So tell me the story, how did you go from that dropout to where you are now?

AMORUSO: Well, it's been a long road. So, I grew up in the suburbs and I was very kind of unhappy with the public school that I was put in and decided that it was setting me up for, like, a very predictable life, which was not what I wanted. I like wanted to save the world and I kind of wanted to smash capitalism, and I thought it might be possible. And at a certain point, you know, decided that I was going to smash big corporations by, I don't know, shoplifting from them, which totally didn't pan out.

(LAUGHTER)

AMORUSO: I learned that the hard way and decided that only sustainable hard work and without shortcuts is what works in life. And I actually had to learn it the hard way, which most people don't. And I had some time to hang out on the Internet and on MySpace at the time, so before Facebook had really taken off, and was given - (INAUDIBLE) eBay sellers who are promoting their vintage stores on MySpace. And I wore vintage at the time and knew where to find it, but I've never seen people selling it on eBay and I saw the kind of prices they were getting. I had taken community college photo classes and thought, I can do that. So I bought "EBay for Dummies" and the rest is history.

ZAKARIA: And so, you started selling stuff on eBay. That's really the beginning of this, of this company. AMORUSO: Yes. Yeah.

ZAKARIA: And you had no business background, so you actually go to the Internet and you start looking - you like a video modules on various business issues?

AMORUSO: Yeah, that's what I did. I watched YouTube videos when I didn't know what kind of warehouse shelving to get. When I went to raise venture capital, I watched, you know, round tables of Stanford business school discussions where these CEOs talked about - there are like pet peeves of entrepreneurs, so I knew kind of what I was getting myself into. I bought a book called "How to Be Smarter than Your Venture Capitalist."

ZAKARIA: But now, one of the things that's interesting about the company is really the heart of it is not manufacturing, it's customer service. Like you really try to address customer complaints, demands. Talk about that.

AMORUSO: Yeah. Well, Nasty Gal kind of emerged out of a conversation, so eBay, yes, there was the bidding and eBay was the platform for the business. But it was through social media that I really connected with my customers, and this was back in late 2006- 2007 when the business started and really began to take off. I was there behind the computer answering every single one of their questions, reading what they had to say about what they thought about the product or the models and learning on a very qualitative level, like, what our customer liked and what she didn't.

ZAKARIA: So what are your pieces of advice to Millennials? What do you think they need to know as they go out into the world?

AMORUSO: So, in "Girlboss" I say, don't act like you've arrived when you just received an invitation, which I think a lot of people do. They get their first paycheck, or they get their first promotion and they're like, whoo hoo, and maybe don't plan their finances as well as they could. At "Nasty Gal", you know, I always sock the profits away back into the company. I paid my first employee more than I paid myself for a good while. And it was just fun for me watching like the cash kind of pile up. I didn't want to do anything with it. It was just like, I have a business and my very simple kind of naive idea of business at 22 years old was you sell things for more than you buy them for, and then the company makes money. And I've now learned actually a very rare thing, especially in Internet businesses and something that the world is very surprised by. So I think there's something to learn from that.

ZAKARIA: So I look at all of those kinds of pieces of advice and you say write thank you notes, dress well, don't chew gum, put your phone away during an interview. It feels like you've come to these pieces of -- one might even say very traditional wisdom, the hard and long and complicated way, but what you're saying to people is sort of straighten up, smart up, and ...

AMORUSO: It's actually really old-fashioned advice and it's only through not doing those things or maybe thinking, maybe people don't need to do those things and experiencing what happens when someone shows up smacking their gum or they're not wearing a bra or they lean back in their chair and have no questions when you say do you have any questions for me? Which at the end of the day is just like are you curious or not? Like how interested are you in what we are doing? And there's very conventional things in the world that I've learned very unconventionally are important to pay attention to.

ZAKARIA: Pleasure to have you on.

AMORUSO: Thanks for having me.

ZAKARIA: Next up on GPS, a little more advice - what is the best job in America? President? Banker? CEO? We'll tell you the exact answer when we come back.

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ZAKARIA: As a new crop of graduates enters the workforce, it brings up an interesting question. What should the workers of tomorrow major in? What field of study will best prepare them for a good job? It brings me to my question of the week, the job site Career Cast recently released its annual job rating report. They ranked the best jobs based on income, job outlook, physical demands and stress. So, what is the best job in America in 2014? Is it mathematician, software engineer, investment banker, or doctor? Stay tuned and we'll tell you the correct answer. And make sure you don't ever miss an episode of GPS by DVR-in the show. If you don't already know how to do it, just as one of those college kids or even high school kids. They can all help you, I'm sure.

This week's Book of the Week is Steven Sestanovich's "Maximalist." "America in the World from Truman to Obama." This is the best book I have read on American foreign policy in a long while. Sestanovich describes America's alternating tendency to get too involved and aggressive in the world and then retrench from it. He is partial to the maximalist posture, but the book is fair and balanced enough, to coin a phrase, that you can draw your own conclusions.

And now for "The Last Look." The government announced this week that the U.S. economy shrank in the first quarter. That's the first quarter in the red in three years. It's certainly not catastrophic, but it got me wondering whether the mafia might be able to help on this one.

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UNIDENTIFIED MALE: I want to make him offer he can't refuse.

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ZAKARIA: No, I'm not suggesting that organized crime make offers that American CEO can't refuse, instead I'm suggesting that the U.S. might want to take a page from Italy's book. Let me explain. Italy's GDP has essentially the opposite track record of the U.S. until recently. The fourth quarter of 2013 was the first time Italy's economy grew in two years. So Italy dipped into the shadows this week, the shadow economy, that is. Starting in 2014 and going retroactively, Italy has said it will add the mafia's dealings to its GDP. And not just like Cosa Nostra, but anyone who makes money in the black market, drug dealing, prostitution, smuggling. Analysts expect this accounting change to boost Italy's GDP a good percentage point or two. You might laugh, but the black market is a big deal. A 2011 analysis found that if the worldwide black market were a national economy, it would trail only the United States in size, totaling some $10 trillion a year. Another study found that America's underground economic activity was worth about $2 trillion. That's more than 10 percent of the legit GDP. There are, of course, many other countries reported to have large underground economies like Russia where the formal economy is also doing badly these days. In fact, maybe adding the mob to the GDP is the one thing that Washington and Moscow could agree on right now.

The correct answer to our GPS Challenge question is A. Mathematician. According to the U.S. Bureau of Labor Statistics, the median wage for a mathematician is $101.360. And the field is projected to experience 23 percent growth in the next two decades. The worst rated job of the year, according to career cast, is lumberjack. So, don't do that. Thanks to all of you for being part of my program this week. I will see you next week.