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Fareed Zakaria GPS

Search for Answers on MH-17 Bombing; Interview with Zbigniew Brzezinski; Putin and the Crisis in Ukraine; Interview with Paul Krugman

Aired July 20, 2014 - 10:00   ET

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

FAREED ZAKARIA, HOST, FAREED ZAKARIA GPS: This is GPS, the GLOBAL PUBLIC SQUARE.

Welcome to all of you in the United States and around the world. I'm Fareed Zakaria combing to you live from New York.

We'll devote most of today's show to the downing of Malaysian Airlines Flight 17 over eastern Ukraine. We will go live to the immense debris field where bodies have now been lying for 96 hours and where chaos and confusion continue to reign. Then I will talk to America's eldest statement, Zbigniew Brzezinski, about the big picture. Russia's role, the international communities' response, and what President Obama's next move should be.

Also, just how much is President Putin to blame? And what should be done about it? We will have a spirited debate. Stephen Cohen and Chrystia Freeland.

Also how should you read the economy these days? A steady recovery or a stock market bubble? Nobel Prize-winning economist Paul Krugman will explain how he sees it.

And why the United States and Europe might be sorry that they treated the big emerging markets so badly for so long.

The brick backlash has begun.

But first here's my take. The actions of the pro-Russian forces, who it appears shot down a civilian airliner, might seem at first glance to be crude and unsophisticated. But in one sense they're on the cutting edge. They represent something we see all around us these days -- the democratization of violence.

Let me explain. For most of history, the side with the bigger army usually won a conflict. Over the past few decades a different pattern has been emerging, the power of asymmetrical warfare. Look at the pro-Russian separatists or Hamas or Hezbollah or the insurgents in Afghanistan or Iraq, and you will see attacks that are cheap compared with the massive response then launched by traditional armies.

In Moises Naim's excellent book, "The End of Power," he calculates that for every dollar that al Qaeda spent planning and executing the 9/11 attacks the United States spent $7 million countering it or coping with the losses. That's a ratio of $1 million to $7 million. Staggering, indeed. That is why Naim says never in the field of human conflict has so few had the potential to do so much to so many at so little cost.

Naim cites scholar Ivan Arreguin-Toft who looked at asymmetrical conflicts in history and found that while 150 years ago the weaker party would win only about 12 percent of such wars. In the last 50 years it has prevailed 55 percent of the time.

But let's be clear about the current crisis in Ukraine. This is not really a story about a band of rebels who are up against the Ukrainian government. It is about little Ukraine up against Russia, a country that spends 35 times what Ukraine does on its armed forces. The Russian effort to turn this into an asymmetrical conflict by using special forces, rebels, and perhaps even mercenaries is a conscious strategy to take advantage of the power of asymmetry.

Moscow is seeking to destabilize Ukraine at low cost and perhaps most important with the ability to deny its involvement. The best way to counter Russia's strategy is to deny that advantage that it seeks. The world must make clear that it recognizes that Russia has had a conscious deliberate centrally directed policy to destabilize Ukraine and to do so has sent into the battlefield heavy weapons including anti-aircraft weapons.

This is not a case where terrorists are operating without an address or a home base. It's called the Kremlin. If there were in the West hold Russia responsible for its actions in eastern Ukraine insist that the government of Ukraine which Russia claims to recognize be allowed to take control of all regions of its country and help the democratically elected leaders in Kiev, Mr. Putin's strategy of causing chaos on the cheap will not work.

After all, despite Russia's huge defense budget, despite its massive size, despite a U.N. veto, it is now watching its neighbor, historically part of Russia, move irretrievably from its grasp and why? Because Russia has provoked the most important force in the modern world. Nationalism.

Ukrainian public sentiment and sentiment in Eastern Europe and perhaps beyond has become deeply anti-Russian. That's an intangible force but one that has proved to be very powerful in modern history. In that sense it is the Kremlin that is on the wrong side of asymmetrical warfare.

Let's get started.

Let's first get the latest from the crash site with CNN's Phil Black. Phil is near the eastern Ukrainian town of Grabove and in that field behind him is where the cockpit of the plane is believed to have landed.

Phil, can you -- thanks for joining us.

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Hello, Fareed. ZAKARIA: About that black box, do you know anything about it? Is

there any evidence that either the Russian, pro-Russian forces have removed it or that investigators have somehow found it?

BLACK: Officially no. The pro-Russian separatists, their leadership anyway, Fareed, insists that they haven't seen it. They also say that's because they haven't been taking apart the impact zone. They haven't been going through the debris and the wreckage in any way. They claim they've been acting to pry to preserve what is here for the sake of investigators who are still yet to arrive here.

We know that's not entirely true because we've seen pro-Russian gunmen in among the debris. We've seen evidence that things have been moved and, of course, things have been moved significantly to try and get the bodies out. We saw that just here. This is the cockpit or what was the cockpit behind me, just a short time ago. We saw emergency workers cutting in to what's left of it and making really quite significant damage to what's left of it in order to try and remove, they thought, what could be the remains of someone there. There was no one there.

Crucially, though, their own investigators here to study it before they did that damage. What we do have and it is the one clue, it is video released by the Reuters News Agency. It is video that appears to show someone on Friday carrying an orange cylinder that could be one of the cockpit recorders. That's what has been released. Other than that we have no official confirmation either way -- Fareed.

ZAKARIA: There are about 192 bodies or what appear to be remains of people that are now on -- in a refrigerated -- set of refrigerated containers on a truck but who has them? Who is in charge of these bodies and can we be sure that we'll actually get back to their families so that they can be -- they can be buried or, you know, in some fashion?

BLACK: There's considerable uncertainty about this still, Fareed, because the people in charge on the ground are the guys with the guns and they are the pro-Russian separatist militants. No doubt about that whatsoever, and they are overseeing the events here. For the moment they are permitting Ukrainian emergency workers, some hundreds of them, to come in and do their work and try and recover these bodies.

But ultimately who is truly in possession of them once they have been recovered and even those that have been removed to refrigerated railcars nearby that is still an open question. We can't say for certain that they are in the possession of the Ukrainian government yet. That cannot be said. We do know that the bodies are being recovered, though. That in itself is some progress because it was only yesterday that so many of them were still out here beneath the Ukrainian sun, so it is a step.

It is some progress yet so too perhaps with the restriction of access to the various impact sites across this wide debris field, but not everywhere as we're seeing here at what can only be considered a fairly important location for anyone who is going to come in, in the near future to try and investigate this forensically and determine just precisely how this aviation disaster occurred -- Fareed.

ZAKARIA: Thank you for that smart reporting, Phil. We will be checking in, of course, as the day progresses.

Up next, I will talk with America's elder statesman, Zbigniew Brzezinski, about the next moves for Russia, the U.S. and the international community. We will also talk about Israel's invasion of Gaza. Stay with us.

(COMMERCIAL BREAK)

ZAKARIA: Let's bring in Zbigniew Brzezinski now. He was Jimmy Carter's national security adviser. He's the author of "Strategic Vision: America and the Crisis of Global Power."

Zbig, you see the situation in Ukraine. What should Washington, what should other world leaders do?

ZBIGNIEW BRZEZINSKI, FORMER U.S. NATIONAL SECURITY ADVISER: We should be aware of the fact that this is truly a historically defining moment. If we do the things we need to do, if we are firm and clear, but also somewhat flexible, we can still give Putin the chance to redeem himself and to rejoin the community of nations.

We are, in fact, facing the first use of force over territorial issues in Europe since the outbreak of World War II. Putin is doing it. I think he can be persuaded to stop if we stand united and that means presidential leadership from the United States and consistent, continued actions and European leaders rallying with us. It's a major challenge, but it is defining.

ZAKARIA: You have argued -- on your Twitter feed that what we need is a war crimes tribunal to -- or the International Criminal Court to investigate and perhaps charge with war crimes those who were responsible for bringing this plane down.

BRZEZINSKI: Yes, indeed.

ZAKARIA: What would that be?

BRZEZINSKI: Well, first of all, I have in mind Putin doing it. That is to say -- he can still say that the actions that were taken to shoot down that plane by his thugs with the arms he provided went far beyond anything he intended and that this was an illegal criminal act and the people responsible for it would be handed over to the international tribunal. And he can suspend the military intervention in Ukraine itself, which is a cause of possible conflict between the east and the west as a whole.

These are the actions he can undertake. If he fails to undertake them, he is actually challenging the cohesion of the international system and the security of Europe at the same time.

ZAKARIA: You know, Zbig, that Europeans are much less willing, at least so far, to impose sanctions. There has been some reasonably tough rhetoric, but because they are so dependent on Russian natural gas, there has been a reluctance to do much more.

Do you believe that this will be a turning point in Europe?

BRZEZINSKI: My sense is that the European public opinion is aroused. This humanitarian issue is so tragic, so painful, so cruel and so unnecessary that the Europeans are beginning to be moved. But each of the major European leaders has a role to play. Chancellor Merkel has to face the fact that her predecessor, also a chancellor, was one of the creators of Europe's dependence on Russian energy supplies.

Does Europe want to become a satellite? I think President Hollande has to face the fact that he cannot now, at this moment, be sending advanced arms to help Russia. Prime Minister Cameron should face the fact that the city of London has become a Las Vegas for Russian financial transactions that are self-serving.

There are responsibilities these leaders have to face and they have public opinions which I think are becoming increasingly aware that this is truly a moment of decisive significance for the future of the system -- of the world system.

ZAKARIA: There are a lot of people who look at Washington's reaction to Russia and say, look, it's all very well to be tough, but we need, we, the Americans, need Russia on Syria, on Iran and if we end up with a new Cold War, you are not going to be able to get Russia to cooperate on any of these vital strategic issues that the United States cares about. What would you say?

BRZEZINSKI: I would say that we're not starting the Cold War. He has started it. But he has gotten himself into horrendous jam. I strongly suspect that a lot of people in Russia, even not far away from him who are worried that Russia's status in the world is dramatically being undermined, that Russia's economically beginning to fail, that Russia's threatened by the prospect of becoming a satellite to China, that Russia's becoming self-isolated and discredited.

I think there's still maybe a chance that he can reverse course. We are to emphasize that option and failing that, do what is necessary and at the same time try to deal with the other problems on our own if we can.

What is the alternative? To let war break out in Europe? To let Russia go on to the Baltic States from Ukraine? To let acts such as these simply be ignored? Is that the choice? Is that the test of leadership?

ZAKARIA: Let me switch gears with you, Zbig, and ask you about the Israeli invasion of Gaza. Prime Minister Netanyahu on CNN told Wolf Blitzer that this was a strategy to demilitarize Gaza, explaining the use of force, but it has been -- it has been quite a robust use of force and the most recent attacks apparently 60 Palestinians have died.

Do you think that it is going to succeed the Israeli stage?

BRZEZINSKI: No, I think he is making a very serious mistake. When Hamas in effect accepted the notion of participation in the Palestinian leadership, it in effect acknowledged the determination of that leadership to seek a peaceful solution from Israel -- with Israel. That was a real option. They should have persisted in that. Instead Netanyahu launched the campaign of defamation against Hamas, seized on the killing of three innocent Israeli kids to immediately charge Hamas with having done it without any evidence, and has used that to stir up public opinion in Israel in order to justify this attack on Gaza which is so lethal.

I think he is isolating Israel. He's endangering its longer-range future and I think we ought to make it very clear that this is a course of action which we thoroughly disapprove and which we do not support and which may compel us and the rest of the international community to take some steps of legitimizing Palestinian aspirations perhaps in the U.N.

ZAKARIA: Zbig, when you were national security adviser, you had to deal with the Iranian revolution, the Iranian hostage crisis, the Soviet invasion of Afghanistan, did it feel to you, and I'm thinking about the world we're living in now, that there were so many crises taking place at the same time that Washington was simply overwhelmed and how should President Obama deal with these multiple crises happening in various parts of the world simultaneously?

BRZEZINSKI: The fact is that in this realm the president has more autonomy than in the domestic realm, difficult and important as the domestic realm is. It's the area where he defines the future of this country's position in the world. So he has to lead and he has to be up front.

I support his positions but I think he could be more engaged in the promotion of them, in the assertion of them, in imposing in others the realization that he stands behind the initiatives that his secretary of state is pursuing and that there are consequences if we are defined -- defied. I think that is the role of the president today and that is the challenge in this complicated world.

My hope is that we can create coalitions ad hoc dealing with these different issues but what is happening in Ukraine could preempt these issues and this is why an intelligent but strong position, collective position with Europe on Russia and Ukraine is today so much needed. With a positive outcome as our objective or a firm stand if necessary.

ZAKARIA: Zbigniew Brzezinski, always a pleasure. Thank you, sir.

BRZEZINSKI: Thank you.

ZAKARIA: The next step, what to do about President Putin? We will have a debate. Stay with us.

(COMMERCIAL BREAK)

ZAKARIA: So what role did President Putin play in the downing of Malaysian Airlines Flight 17 and how should we respond?

I have two terrific guests to talk about this, Stephen Cohen is professor emeritus of Russian studies and politics at New York University and Princeton University. Chrystia Freeland is a member of parliament in Canada and a former top journalist at Reuters and "The Financial Times."

Steve, let me ask you. The Russian government's position is that this is the Ukrainian government's fault because not only does it control, is meant to control the territory of Ukraine but more importantly that Kiev, the government in Kiev has been fomenting conflict and behaving irresponsibly. This is a charge that you support and outline in a big article in "THE NATION" magazine.

Why do you think the Russians are right?

STEPHEN COHEN, PROFESSOR RUSSIAN STUDIES, NYU AND PRINCETON: The late Senator Moynihan said that all of us are entitled to our own opinion but not to our own facts. The biggest fact missing from the story of the tragedy of the airliner is, is that for weeks and months now, the government in Kiev which is a government supported 100 percent by Washington has been bombing cities in eastern Ukraine. Bombing them, destroying them. Leveling them.

We probably have about 250,000 to 300,000 refugees having fled to Russia or other parts of Ukraine. That's a humanitarian catastrophe. We don't know how many civilian casualties there are but probably at least 2,000 or 3,000. In response these rebels, whether we like them or not, have declared that they will try to shoot down incoming Ukrainian warplanes and they have been doing so.

It was in this context that this tragedy happened. Without that fact, we are dealing with opinion and I don't think we honor the people who died by this orgy of political opinion that is coming out of the United States and particularly out of Kiev which is producing a lot of, if not false, misleading information.

So I think that's where things stand and we need all -- the entire picture to put this tragedy in context.

ZAKARIA: Chrystia, you've been in Ukraine many times recently as well. How do you respond to Steve's charge?

CHRYSTIA FREELAND, CANADIAN PARLIAMENT MEMBER: Well, look, this is a conflict this. This is a fight entirely created, organized and armed by the Kremlin. This is not a Ukrainian civil war. The separatists, many of them are led by Russian nationals, openly Russian nationals who have worked for the Russian security forces. They are using weapons which have come from Russia.

We heard Secretary Kerry talking about that today. These are not weapons you pick up at your corner store. These are not some local separatists fighting with Molotov cocktails. There is one person who could stop this tomorrow and that is Vladimir Putin.

And it is really important to be very clear this is not a local civil war. The areas where the Ukrainian government has taken back control like Slovyansk, you're having normal peace, normal civilian life being restored, and we've seen since the beginning of this conflict what we were hearing from Russia, from the Russian propaganda machine, was the Ukrainian revolution with adding instability that this was a failed state.

Remember the fears about how they're going to be neo-fascists taking over? Well, you're now seeing tragically the instability is being caused, is being led by Russia and by these irregulars who have been given absolutely terrifying weapons.

One thing, though, that I think is really important that's Zbig talked about is this could be an exit moment for Kremlin -- for the Kremlin and for Putin. Putin can now say, if he is smart -- you know, this is a disaster for him, it has gone completely wrong and if he is smart, he can separate himself from these guys and the world community can move on.

ZAKARIA: Steve, what's Putin going to do?

COHEN: I don't know what Putin is going to do, but I just don't understand something absolutely fundamentally. I've known Chrystia for years and years. She's a very intelligent woman. I don't understand how somebody who knows Ukraine as well as she does and you have a Ukrainian background, I think, can say that this is all Russia or Putin's doing. Given the historical divisions in Ukraine, this is a classic example of a profoundly divided country. We had - wait a minute. We had a poll just two days ago and you were wrong in your commentary. One-third of people in Ukraine generally taking in East and West, and remember the west is pro-Russian, say they favor the Russian position in this conflict. This -- whether we like it or not --

ZAKARIA: 66 percent don't, which is ...

COHEN: Well, but still, it's a divided country. You could say -- wait a minute. You could say things, the same thing about the American Civil War. The 60 percent favored the Union, and - here is --

ZAKARIA: One side had to prevail. Doesn't the Ukrainian government have to take control of the territory? After all ...

COHEN: No. Absolutely.

ZAKARIA: If Putin says the Ukrainian government is responsible because it is in charge of Ukraine, well, then let it be in charge of Ukraine.

(CROSSTALK)

FREELAND: You had your moment. Can I respond? Because you actually charged me with ...

(CROSSTALK)

COHEN: I asked you a question.

FREELAND: So, superfast. So, superfast. Actually, what has happened I was in eastern Ukraine in May and I read the polls and we had a very important poll, which was the presidential election? Which Poroshenko won on the first ballot of 17 candidates?

ZAKARIA: All right, I got to ...

FREELAND: Ukraine is united.

ZAKARIA: You've got 45 seconds.

COHEN: Well, I can do it in less than45 seconds.

FREELAND: Putin has united Ukraine.

ZAKARIA: Chrystia?

FREELAND: You want me to reply?

COHEN: I haven't spoken yet.

The argument now is the strategic argument is that Putin can end this. This is preposterous. I mean you're a historian. I'm a historian. This is a profoundly complicated political, social -- if tomorrow Putin went on Russian and Ukrainian television and said, guys in Eastern Ukraine, put down your arms, you really think he would do it? Do you really think they would not? Moreover and this is the failure point, at the end of June, France, Germany, our allies and Russia asked the president of Ukraine to continue the cease-fire so there could be negotiations. The government of Ukraine did not. It intensified the war with the backing of Washington. So we are deeply complicit in the horrors that are going on there. Now, the light is, maybe this tragedy will bring about a cease-fire where people can talk again.

ZAKARIA: All right, we are going to have to leave it at that, I will refer people to your article in "The Nation" magazine, because you're right that you are somewhat outnumbered, so you deserve more - you deserve more than you got.

COHEN: Thank you.

ZAKARIA: Next on "GPS," the brick blowback. Brazil, Russia, India, China and South Africa are fed up with being treated poorly by the West, they say. They are fighting back. I will tell you how.

(COMMERCIAL BREAK)

ZAKARIA: Now for "What in the World" segment. World leaders came together in Brazil this week to celebrate. No, this had nothing to do with the World Cup. I'm talking about the sixth annual BRIC summit. The leaders of all the BRIC's nations, that is Putin, Modi, Rousseff, Xi and Zuma, all gathered in Fortaleza, Brazil and on Tuesday they sent a shot across the bow by announcing a $50 billion bank meant to rival the World Bank and $100 billion crisis fund to replace the IMF.

I can understand why they made this move. You see these five nations, Brazil, Russia, India, China and South Africa now account for more than 40 percent of the world's population and almost 20 percent of the world's total GDP, 17 percent of global trade. Yes, growth in the emerging markets has slowed recently, but these countries still have become a large enough force in the global system that they want a seat at the table. And that hasn't happened. Their influence in international institutions has lagged behind. Only two of the five BRIC's countries have permanent seats at the U.N. Security Council and their collective voice isn't heard much at all at international economic institutions like the IMF whose head the Europeans appoint and the World Bank whose leaders are put forth by the United States. As the economists point out, China, the world's largest economy by some measures has less voting power in the IMF and World Bank than Belgium, the Netherlands and Luxembourg. Remember, China has 1.3 billion people to the under 30 million people in those three European nations. The BRIC's leaders have complained about this unfair treatment for years, American administrations push to give them greater voices and votes, but the small European countries haggled and then the American Congress has been its usual obstructionist force.

Now instead of continuing to change the old system from within, the BRIC's leaders are trying to subvert it. And this subversion comes on the 70TH anniversary of Bretton Woods. That was the agreement signed at the U.N. conference in the whiles of New Hampshire, which spawned the World Bank and IMF in the first place. Of course, there is all sorts of squabbling and disagreement among the BRICs, but there is one very important thing that they seem to agree on. They envisage an economic future that is both anti-Western in some sense and anti- dollar.

Welcome to the new world order where we have to accommodate the rise of the rest. If the United States and the West don't do that, others will create clubs of their own to counter the existing system. The IMF has said it will collaborate with the new bank, but is that enough? Well, there's one tangible thing the U.S. could do as soon as tomorrow. It could pass legislation to modernize and reform the IMF. The reforms were negotiated in 2010, they are supported by almost all 188 IMF members and just this April, the G-20 gave Congress an ultimatum of sorts, pass the reforms to give emerging countries a greater say by year end or we will move forward without you. Maybe the creation of this BRIC's development bank will be just the wake-up call the United States Congress needs, but given that it is the United States Congress, I wouldn't bet on it.

Next on "GPS," the American economy. Is it as rosy as it seems? Is it a facade and what about Obamacare? Paul Krugman will tell us how he sees things when we come back.

(COMMERCIAL BREAK)

ZAKARIA: The world may be in crisis, but the American economy has been steadily recovering. The unemployment rate, consumer confidence and new home sales are all better than they've been since 2008 and the stock market keeps hitting record highs. On the other side, the unemployment rate is skewed because there are so many people who have simply given up looking for jobs and therefore they aren't counted as the unemployed and wages just aren't rising for most Americans. What to make of all this. Joining me now is Paul Krugman, "The New York Times" columnist and Nobel Prize winning economist. So, Paul, the quick take on the U.S. economy?

PAUL KRUGMAN, ECONOMIST, "THE NEW YORK TIMES": Things are getting better finally. There's it's starting to look finally like a real recovery, but it's not a boom and this is after many, many years of terrible performance, so relative to the way things have been for the last few years, we're feeling pretty good, relative to anything anyone could have imagined, the worst downside you could have imagined seven years ago, it's terrible. So it's -- it's -- I would say it's half full, half empty, more half empty than half full, because there is so - We should be doing much better than this.

ZAKARIA: And lots of people argue the only reason we're doing as well as we are is that the Federal Reserve has maintained these extraordinary policies, very low rates, other kinds of programs that pump cash into the system.

KRUGMAN: Well, certainly, keeping rates low. There is no rational reason not to keep them low. Basically, you know, business doesn't see a lot of investment opportunities, how people are not ready to buy houses in large numbers yet, so you have to have a cheap money environment and at least thankfully the Fed has been doing its job.

ZAKARIA: But a lot of people argue that what the Federal Reserve is doing has not produced that much in terms of a robust recovery by your own admission, but instead what it has done has fueled asset bubbles, very, very significant asset bubbles, so you have stock market prices going up, you have, you know, real estate particularly at the high end, and that these, if you look back at periods similar to this, '98, '99 or 2007, 2006, 2007, they inevitably produce a collapse of some kind of blip bubble will burst and then that's terrible for unemployment, as well so this policy is sort of self-defeating.

KRUGMAN: There's two things to say, the first is do you really want to say that the Fed should do something that we know would hurt the economy at a time when it's still very weak on behalf of your judgment that there are bubbles out there? I mean even those of us who warned about the housing bubble were not saying that the Fed should raise rates while the economy was weak. That's one hell of a judgment to make. Actually, let me give you a real example. In Sweden, their central bank looked and they have something that looks much more like a real housing bubble than anything we have. They said, oh, that's got to take priority. Let's raise rates even though inflation is far below target. The result after doing that for a while is they've now slid into actual deflation while the bubble continues. And so they've reversed policy, they've cut rates again, so saying the Fed should follow that course. I don't think it makes sense.

ZAKARIA: You wrote this week, I think, that Obamacare is working. Explain very simply why you make that claim?

KRUGMAN: There were a bunch of things that Obamacare was supposed to do in its first year. It was supposed to sign up a lot of people through the exchanges, through the people buying essentially private insurance, but through the government-run exchanges. It was supposed to ensure a bunch of additional people through Medicaid. It was supposed to do this without causing a spike in health care costs. It was supposed to substantially reduce the number of people who are uninsured. All of those things have happened. If you look at any -- just about any of the numerical targets for the first year, it's done better than that. It's the most amazing thing that people don't know that. But, you know, after the big problems last fall, everyone was assuming that year one would come in short of expectations, in fact, it's come in ahead of expectations and it looks very clear that this is a workable policy.

ZAKARIA: Health care cost, this is the part that everyone worries about. What is the evidence that health care costs are going down? Because you hear anecdotally that lots of people's premiums are going up, lots of companies say they're going up. What is the aggregate data show?

KRUGMAN: The aggregate data shows something, which has got people pinching themselves, which it's health care costs are growing so slowly it's really hard to believe. Medicare, Medicare is currently spending about a thousand dollars less per beneficiary than what's projected at just four years ago. So, Medicare is way down. It's aggregate health expenditures is growing much more slowly. Premiums are rising, but premiums have risen every year forever. They don't seem to be rising. They seem - If anything be rising more slowly than before. The thing, you know, you're going to find basically if you're a healthy young male in a state that didn't have community ratings, so California, not New York, and you're affluent enough that you don't qualify for a subsidy, yeah, your premiums have gone up. You don't find a lot of -- you know, the anti-Obama care ad campaigns don't highlight people like that because they're not sufficiently sympathetic. They keep on trying to find middle-aged or older middle class people who have had big premium increases, but not one of those stories that's been highlighted and the assets held up under scrutiny. So, it turns out, yes, there are some losers, but it's pretty narrow group and the people that the program is supposed to help are being helped. The people who really need the care.

You've also written a little bit about energy where you think that Obama has broadly speaking done more than many people realize.

KRUGMAN: Sure, so if you look at -- there was a lot of energy investment in the stimulus. There's been a lot of move on standards for power plants, so Obama has, in fact, done not nearly enough. He always - when it comes to climate issues, you look at the threat and you look at the response and they're so disproportionate that you despair, but if you just compare what Obama has done with what had been done before or with what people think he's done, it's a lot more. And we are kind of -- this is -- we've had this kind of -- in a way these are related. Health costs are growing much more slowly than anyone expected. On energy, the cost of renewables has fallen much more than anyone expected so that getting to a major reduction in greenhouse gas emissions looks much closer than anybody really thought was possible just a few years ago and Obama is doing things that push us still closer to that point.

ZAKARIA: At the end of the day, what kind of grade would you give President Obama, particularly his domestic policy which is what you write about? KRUGMAN: Oh, wow, the question you have to ask is are we grading what was achieved or we are grading given the difficulty of the test because there were -- had to deal with, you know, scorched earth opposition all the way. So I think if you look at the overall results, it's probably a "B" or a "B" minus, but a lot of that is not his fault. And if we look at how he's dealt with what he had to deal with I think it's an A minus. There are things he could have done more, housing, mortgage relief. That are important. There are places where he didn't push when he should have. But in the end, look, this is the most consequential administration since Ronald Reagan. I don't like the consequences of Reagan, but America emerges from the Obama years at different country -- emerges with something close to universal health care. Emerges with a reasonably useful financial reform and emerges with some important changes in energy and environmental policy. Not many presidents leave that behind. You know, America after -- America after Bill Clinton had not really been changed at all and this is -- so in that sense, evening though, you know, Clinton is a great political talent and Obama is not, in the end Obama leaves behind a country that has been importantly changed and I'd say for the better.

ZAKARIA: And, of course, his critics will say for the worse.

KRUGMAN: Right, but changed, anyway.

ZAKARIA: Paul Krugman, pleasure to have you on.

Next on "GPS," do you worry that your kids are playing too many video games? Well, so does a celebrated dictator. I'll explain when we come back.

(COMMERCIAL BREAK)

ZAKARIA: On July 20th, 1969, 45 years ago today, Apollo 11's Eagle landed on the Moon and Neil Armstrong became the first person to walk the lunar surface.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: That's one small step for man, one giant leap for mankind.

(END VIDEO CLIP)

ZAKARIA: That brings me to my question of the week. Approximately how much more memory does Apple's iPhone 5S have compared with the Apollo guidance computer? A, 100,000 times more, b, 624,000 times more. C, 1.8 million times more or D, 5.4 million times more? Stay tuned and we will tell you the correct answer.

This week's book of the week is William Bowen's "Higher Education in the Digital Age," one of the few places where the information revolution has not improved productivity or reduced costs is higher education, but that is all about to change with the rise of online learning. The former president of Princeton explains how education will and should change in the face of these huge technological wins. Conversational in tone and full of wisdom, this is a great book.

And now for "The Last Look." To add to the world's tumult, the North Korean government threatened military action last month over an upcoming Seth Rogen and James Franco movie. It's about television personalities recruited to assassinate Kim Jong-un during an interview.

(BEGIN VIDEO CLIP)

SETH ROGEN, ACTOR: You want to go kill Kim Jong-un?

JAMES FRANCO, ACTOR: Totally, I'd love who says - Kim Jong-un. It's a date.

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ZAKARIA: Recently Pyongyang wrote a letter of complaint requesting that the movie, which they deem to be an act of war be shut down. While this seems in keeping with Kim Jong-un's usual antics he isn't the only dictator to throw this kind of tantrum.

Remember Manuel Noriega, the former Panamanian strongman? He's suing the makers of the videogame, "Call of Duty. Black ops 2" from his Panamanian prison cell. Noriega alleges in his lawsuit that the game portrays him as a kidnapper, murderer and enemy of the state. Perhaps the video game designers should have had his characteristic stick to drug trafficking, racketeering and money laundering, crimes he was convicted of in the United States and France. Oh, and he was also convicted of murder in Panama. One would think Kim Jong-un has more important things to worry about than Hollywood comedies. I guess Noriega, in his prison cell has more time on his hands.

The correct answer to our GPS challenge question was "C," approximately 1.8 million. Apollo's guidance computer had a memory of just 36 kilobytes. The Apple iPhone 5s has a memory of 64 million kilobytes.

Weighing at 70 pounds, the guidance computer was a marvel of innovation in its day, helping to command the nearly 240,000-mile journey from Cape Kennedy, Florida, to the surface of the moon. But it couldn't do what an iPhone can do.

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