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FAREED ZAKARIA GPS

Obama Re-Assessing Relations with Israel; America and the World's Refugees; Interview with Michael Lewis, Interview with President of Afghanistan Ashraf Ghani. Aired 10-11a ET

Aired March 22, 2015 - 10:00   ET

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


[10:00:22] 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.

We'll begin the show with Benjamin Netanyahu's re-election to a fourth term as prime minister of Israel. His pre-election maneuvers appear to have put him on a collision course with the Obama administration.

Just how bad have things gotten between Israel and Washington? And who is to blame? Bibi or Barack?

We have great reporting and a spirited debate.

Then on Wednesday, another foreign leader will address Congress. But this one will actually be welcomed at the White House, too. Afghanistan's new president Ashraf Ghani will meet and greet in Washington this week but he talked to me first exclusively.

Also, give me your tired, your poor, your huddled masses. That's what the plaque in the Statue of Liberty says but does that not include refugees from war torn countries? Is America turning its back on some of the world's most desperate?

Then Michael Lewis gives us a look at what Wall Street is really up to these days.

But first here's my take. In an appearance on CBS News' "Face the Nation" before being re-elected as Israel's prime minister, Benjamin Netanyahu was asked if he was offended that the White House had tweeted one of my columns. That column pointed out that for 25 years Bibi had been wrong in his predictions about Iran's nuclear program.

Here was the prime minister's response.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: If I had to choose, I would re-tweet something that relates to Iran and that's the supreme leader, Ayatollah Khomeini's recent tweet in which he cites nine ways and reasons that Israel should be destroyed.

(END VIDEO CLIP)

ZAKARIA: Netanyahu is right to draw attention to that threat. But for somewhat different reasons than he implies.

Now let me be clear. Iran's supreme leader is radical anti-Western ideologue whose Twitter feed is filled with hate and hostility, and means Israel only harm but he's also a canny politician who has survived and thrived in Iran's complex political system.

So what is the message he is sending. Khomeini does talk often about the destruction of Israel, but he rejects doing so by means of a war. Quote, "We recommend neither a classical war by the army of Muslim countries nor to throw migrated Jews at sea," end quote.

Let's put aside the strange line about not throwing Jews at the sea, the main point is well characterized by Akbar Ganji. He is Iran's best known dissident who was jailed for criticizing Khomeini. And he argues that the supreme leader has been consistent in his position for years, no war against Israel certainly not by Iran.

What does Khomeini advocate? A quote, "Public and organized referendum in which Muslims, Christians and Jews living in the area under Israeli jurisdiction would decide on the fate of their government and regime." Khomeini has recognized that the greatest vulnerability for Israel is that it has legal jurisdiction over 4.5 million Arab people in the West Bank and the Gaza Strip who have neither a state nor a vote.

That condition is virtually unique in the modern world and it cannot last in a democratic society. This is potentially the long run danger that could undo the miracle that is Israel and it is a miracle. The country is militarily far more powerful than it has ever been compared to its neighbors. Its defense budget is larger than Egypt's, Jordan's, Syria's and Lebanon's combined, according to the Stockholm International Peace Research Institute.

The wall and the iron dome have significantly lessened the threat from Hamas and Hezbollah. Economically Israel is booming having become the richest country in a sea of oil rich states. It is a vibrant democracy and dynamic society.

As for the Iranian nuclear program, which does not yet have even a single bomb, let's not forget that Israel has a large nuclear arsenal, reportedly above 200 weapons, many of them now placed on submarines. Iran's very sophisticated calculating leaders will surely take the strong deterrent into account even if several years from now they were to somehow build a few nuclear weapons.

[10:05:09] In a strange way Khomeini understands the intense power of democracy which is why he shut down the Green Movement in his own country. He recognizes that Israel's vulnerability lies in its greatest strength, its flourishing democracy. In a genuinely pluralistic country like Israel it is very hard to keep practicing a policy of non-citizenship towards so many.

Khomeini understands that Israel can deter and respond to military threats but it cannot, as a democracy, keep control of territories with 4.5 million people against their will. This is why he has chosen as his weapon the persistent call for a referendum. I would hope that Benjamin Netanyahu takes this threat to Israel's

existence seriously and has an answer to it beyond a re-tweet.

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

OK. You've heard my take on what Bibi should do. Now let's turn to what his reelection means for U.S.-Israeli relations. In other words, how bad is it really and what will it mean, at the U.N., the International War Crimes Tribunal, across the Middle East and Europe.

To talk about that, I want to bring in Peter Beinart who has done some terrific reporting on this for "Haaretz" which is one of Israel's main newspapers. He's also a contributing editor for the "Atlantic" and a CNN political commentator.

Peter, it was unusual, a lot of people have noted, for Josh Earnest, the White House spokesman, to go out of his way to really denounce Bibi Netanyahu after his reelection.

PETER BEINART, CONTRIBUTING EDITOR, HAARETZ: Yes, that's true. The administration is not only angry but they're actually in a real cries because there has been a lot of pressure over the last few years, from Europe and around the world, to support the Palestinian's efforts at the United Nations to get it -- to be -- to have their statehood bid endorsed at the U.N. The U.S. behind the scenes has been exerting tremendous diplomatic pressure to try to stop that and their argument has been the path towards Palestinian statehood must be negotiations between the two parties.

But once Benjamin Netanyahu went out and said, there will be no Palestinian state as long as I'm prime minister, he cut the rug out from under the United States. And so the -- the Obama administration really doesn't know how they're going to hold off this pressure now.

ZAKARIA: And what does it mean in all the various fora that the United States has traditionally defended Israel? I know the U.S. is not a member of the criminal court but has always -- you know, used its power to protect Israel.

BEINART: Right. I don't -- I don't think the United States will support certainly Palestinians suing Israel at the International Criminal Court. I think they will still fight that pretty hard. But where you could see a shift is if there's a resolution brought on settlement at the United Nations. I think the Obama administration feels that settlements are unpopular in the United States and even in Congress and they could get away with any U.S. policy after all to oppose settlements, they could get away with not vetoing that.

And then the bigger question would be down the road, maybe for later this year, does the U.S. get behind some kind of resolution to lay out the parameters for a final two-state solution. Netanyahu will still be very, very unhappy about it but maybe they feel like this is Obama's best chance for a legacy. There may not be a two-state deal on his watch but he can at least be the president who lays out the parameters. ZAKARIA: Now in doing this, Obama has, of course, incensed a lot of

conservative Republicans who think that he's betraying Israel. But he's also made life somewhat difficult for some Democrats who rely on a lot of support from the Jewish community and has in some ways split the Jewish community what does all this mean for Hillary Clinton as she tries to figure out whether and how she would run for the White House?

BEINART: In talking to folks inside the Obama administration I think they feel like they have a window in 2015. It's not an election year yet where they could try to move some of these issues, even if it meant a confrontation with Netanyahu, even if it meant a confrontation perhaps with some on Capitol Hill. After all, Obama is not running.

In 2016 they think that Hillary Clinton may position herself a little bit to the right of Obama and maybe she runs as a person who will, you know, heal the relationship between the United States and Israel. I think they can -- they can handle that. These are all grownups there. But this is something that Obama and the people around him care very strongly about. And so I think they're not simply just going to acquiesce for the last two years of his administration.

ZAKARIA: What happens to the Palestinian Authority? What is Abbas's strategy from here now?

BEINART: Well, Abbas is in a very, very difficult position. I mean he has basically bet his career really on the idea that by doing security cooperation with Israel there could be a climate where there could be negotiations.

[10:10:10] The Palestinian Authority is going to find it much harder to continue consider that security cooperation with Israel if there's no horizon whatsoever for a Palestinian state. The P.A., the Palestinian Authority is also facing a tremendous financial crisis because Israel has been withholding -- tax revenue as a response to the Palestinian move at the International Criminal Court so people inside the Obama administration think that the P.A. could really start to collapse.

And if it did, this would be a huge crisis. I mean, Israel does not have to directly patrol the West Bank because the Palestinian Authority is doing that for them. If the Palestinian Authority would have to collapse and there were to be anarchy on the West Bank, terrorism would probably go way up. And Israel would have to send all of its own soldiers back to patrol all those Palestinian villages and towns.

The Obama administration are thinking a lot about that as a prospect. They wonder whether Benjamin Netanyahu knows what he's getting himself into.

ZAKARIA: Peter Beinart, pleasure to have you on.

So now you know just how bad the state of U.S.-Israeli relations are and now the question is, who is to blame? Obama, Netanyahu, both of them? We'll have a spirited debate between two American diplomats with great breadth and depth of experience on Israel.

(COMMERCIAL BREAK)

[10:15:42] ZAKARIA: If relations between the U.S. and Israel are at such a sorry state, who is to blame? To answer that I have two of the most experienced American diplomats when it comes to Israel, one who served under Democratic presidents, one under a Republican.

Martin Indyk was President Obama's envoy for Israeli-Palestinian negotiations until nine months ago. He served twice as President Clinton's ambassador to Israel. And Elliot Abrams oversaw U.S. Middle East policy, among other things, under President George W. Bush, serving as his Deputy National Security Adviser.

Elliot, let me begin by asking you, was this inevitable, given the divide between President Obama and Prime Minister Netanyahu on something as central as the Israeli peace process? You know, are we making too much of the personal dynamics? There really is a profound policy difference here, isn't there?

ELLIOT ABRAMS, DEPUTY NATIONAL SECURITY ADVISER TO PRESIDENT G. W. BUSH: There is a profound policy difference but it is made much worse by the personal difference. It doesn't have to be this bad. People can disagree. I mean, you know, Obama seems to get along fairly well with a lot of people with whom he have grave differences. Putin being one of them. Better than he does with Netanyahu who was after all a democratically elected leader.

I think this is the worst situation we've had for a very long time because of the addition of really terrible personal attitude toward Netanyahu.

ZAKARIA: Martin, you dealt with him in his first term when you were advising Bill Clinton. This is during the Oslo process. How much of this is Bibi? And how do -- how would you describe Netanyahu? What has been the constant?

MARTIN INDYK, FORMER ISRAELI-PALESTINIAN ENVOY: I was also a U.S. ambassador to Israel when he was prime minister the first time, so I spent a lot of time with him. I think over the years, Prime Minister Netanyahu -- and I agree with Elliot that he is democratically elected. He just won a big victory. But over the years he has alienated just about every world leader including Israel's closest friends, Angela Merkel, is a good example, President Sarkozy of France.

And I think that the irritation which has now come to anger is because he tells these leaders that he's the one who is going to make peace. Trust him. He will do it. But then he goes about and does a whole lot of things which contradict the promises that he's made to these leaders. Most importantly the settlement activity which belies it. So there's a sense that at a minimum he's unreliable. But then he goes about doing things which cause particular irritation like organizing for himself to speak before a joint session of Congress with the Republican speaker of the House behind the back of the president of the United States poking President Obama in the eye. I just -- I don't agree with Martin's really laying the responsibility

here on Netanyahu. I think this is partly a left-right thing and it's partly a matter of a kind of personal hostility in this White House that even if it exists should be worked around. What's surprising here is not two people don't like each other, that happens in world politics.

It's that the White House does not work around it, it deepens it, and indeed has done so even since Netanyahu's victory a few days ago. They have gone out of their way to pick fights with him. And you will remember that the president, who called Putin the day after his election in 2012, couldn't find time to call Netanyahu the day after his democratic election in 2015.

ZAKARIA: Elliot, what is there to work on? You said that they should now put aside their personal differences and work together. What is there to work on if the prime minister says there is no real deal to be had with the Palestinians, so there's nothing to do there?

On the Iran front he wants essentially zero enrichment, which is not a deal it seems is conceivable or is likely to happen. Certainly no other country negotiating with Iran thinks it's likely. So what would be the agenda be? What would they work? What would they talk about?

ABRAMS: First of all, Israel has close, and especially close security relationships with Egypt and Jordan. Both countries that are allies of the U.S. and important to us, that's a discussion that should be had.

[10:20:03] Secondly, I don't think it's right to say there's nothing to be done about Israel-Palestinian relationships. There's not going to be a final status agreement creating a Palestinian state. And there wasn't going to be, in my opinion had Herzog won the election either. We saw what happened in 2008 when Olmert made quite a generous offer to President Abbas but he did not accept it.

There are many things that has to happen in the West Bank to improve life there, economically, politically, in security terms. The Israelis and Palestinians remain next-door neighbors and they need to be able to work together. We can help that or we can refuse to help it. And I think, you know, when we have tried to help in the Obama years, remember that Netanyahu was asked to do a 10-month settlement freeze and he did. Netanyahu was asked to make certain statements and concessions a couple of years ago by Secretary Kerry and he did.

And then it was President Abbas who wouldn't say yes to President Obama. So I don't think -- I think frankly, Martin, you're white- washing the Obama role here which is I think has been personal and quite hostile right from the start. But I think there's a lot to do in this relationship. The whole region is facing, for example, just north of Israel, north of the Golan Heights, it's facing the presence of Hezbollah, ISIS and Iranian forces, which are a danger not only to Israel but to Jordan. There's a lot on the agenda.

ZAKARIA: Martin, how would you respond to this point that no matter what the Israelis did, no matter -- if Netanyahu had done everything Obama had wanted, the Palestinians just are not ready, haven't gotten their act together to make peace between Hamas on the one side and a weak Palestinian Authority. It seems like a fairly fair -- it seems like a fair criticism that at the end of the day Palestinians just haven't been able to get to yes.

INDYK: I think that's right. I saw it up close and personal one year ago almost exactly to the day when President Obama and Secretary Kerry presented President Abbas, Abu Mazan, with our ideas for bridging the gaps on final status issues and President Abbas simply shut down. He didn't answer him. He said he'd get back to him and he never got back to him.

So there's no question in my mind that the Palestinians have failed to take advantage of the real efforts by Secretary Kerry and President Obama to make the minimum requirements for an independent Palestinian state living alongside a secured Jewish state of Israel. But that said, Prime Minister Netanyahu didn't help in this process. And the settlement activity that was undertaken while the negotiations were going on did a great deal to humiliate Abu Mazan in front of his people. That's not to excuse him. It's just to say that both sides didn't help in this process.

ZAKARIA: Martin Indyk, Elliott Abrams, thank you very much for spirited debate. We'll have you on again soon.

Next on GPS, is America shirking its responsibilities when it comes to the one of the most desperate populations on the planet? I'll explain.

(COMMERCIAL BREAK)

[10:27:19] ZAKARIA: Now for our "What in the World" segment.

We think of America as the country that opens its arms to people from around the world. As Emma Lazarus's poem on the Statue of Liberty says, "Give me your tired, your poor. Your huddled masses yearning to breathe free. The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed, to me."

But if my these we mean refugees from wars and other tragedies, well, America doesn't really send out many invitations. According to the U.N., the U.S. has taken in the equivalent of only .08 percent of its population in refugees. Compared that to Sweden at 1 percent and Jordan at 9 percent.

Look at the war in Syria which has entered its fifth year. Off the roughly four million who have fled the country, the U.N. says, Turkey has taken in around 1,700,000 refugees. Lebanon has taken in 1,200,000. But the United States has taken in 588 as of mid March. That's according to the State Department. Between 1 and 2,000 are expected by October.

Now Syria's refugees aren't going away. By the end of 2015, the total number could approach five million the U.N. says.

(BEGIN VIDEO CLIP) ANDREW HARPER, UNHCR: It's a scale that we've never, ever seen before.

(END VIDEO CLIP)

ZAKARIA: Andrew Harper leads the U.N.'s response to the crisis in neighboring Jordan. We sat down together when I was in that country's capital Amman recently. His organization says that there are more than 600,000 Syrian refugees in Jordan, around 8 percent of the country's total population.

(BEGIN VIDEO CLIP)

HARPER: We're now seeing Syrians representing the largest refugee population in the entire world.

ZAKARIA: And one of the refugee camps you have here is now the fourth largest city in the entire country of Jordan. Right?

HARPER: Yes. We try not to refer to cities because we don't want these camps to be permanent because the ultimate hope has to be that they return back. But yes, it's the fourth largest urban setting in Jordan.

(END VIDEO CLIP)

ZAKARIA: The Zaatari refugee camp hosts around 84,000 people. There are hospitals, schools serving 18,000 children, an estimated 2,500 shops in the camp, all according to the U.N., including tailors, a barber shop and even a pizza delivery service.

(BEGIN VIDEO CLIP)

ZAKARIA: What is the profile of the kind of people who are coming as refugees?

HARPER: Well, they want everyone. You have teachers, you have doctors, you have truck drivers, you have students, you have people who represent society.

(END VIDEO CLIP)

ZAKARIA: Jordan has a long proud tradition of taking in refugees, from the Palestinians throughout the 20th century, to the Iraqis during both Gulf wars.

[10:30:06] But as the crisis continues, Jordan's government is under a lot of financial strain. It had to stop offering free health care to refugees towards the end of last year.

(on camera): You've been doing this since --

UNIDENTIFIED MALE: A long time.

ZAKARIA: Twenty or thirty years ...

UNIDENTIFIED MALE: 20.

ZAKARIA: You dealt with the mash (ph) Arabs after the first Gulf war. Have you ever seen anything like this, like the Syrian crisis?

UNIDENTIFIED MALE: Not to this scale and not to this level of inability of the international community to find a resolution.

ZAKARIA: The U.N. and NGOs asked for $3.7 billion to deal with the crisis in 2014 but they only got $2.3 billion, a shortfall of 39 percent. So what should the world do? Well, take in more refugees for one. Something the United States does too little of. But second, give more support to countries like Jordan as they tackle the monumental task of housing, feeding and rehabilitating these people. Remember, as Andrew Harper kept emphasizing to me, refugees are just like you and me. Ordinary people who find themselves dealt with some extraordinarily bad luck.

Next on "GPS," this week another world leader will make an address to the U.S. Congress but this one from Afghan president Ashraf Ghani will be greatly warmly welcomed by both parties. I will ask him whether he wants U.S. troops to stay longer in his country when we come back.

(COMMERCIAL BREAK)

ZAKARIA: The Obama administration might have snubbed Mr. Netanyahu when he came to Washington to address Congress, but this week they will welcome another world leader who arrives to address a joint session of Congress. Ashraf Ghani has been President of Afghanistan for less than six months and he has a tough task ahead of him stabilizing a country wrecked by more than 30 years of war. Meanwhile, the clock continues to tick on American troop drawdowns.

And we are joined from Kabul by Ashraf Ghani, the president of Afghanistan. Mr. President, thank you for being on.

ASHRAF GHANI, PRESIDENT OF AFGHANISTAN: It's a pleasure to be with you and with the American people.

ZAKARIA: You have reportedly told the administration, a senior administration official says that you would like flexibility in the timetable for the withdrawal of American troops. Right now there are 10,000 troops. In two years they go to zero. What would you like to see? Two years from now, how many American troops do you think should still be in Afghanistan?

GHANI: The decision on the number of the American troops is that up to the president of the United States and the Congress of the United States. We're very satisfied with the way the noncombat mission is shaping. But the primary duty of defending Afghanistan, securing its future is that of the Afghan people, the Afghan soldiers, policeman, and that of the Afghan government.

ZAKARIA: But Mr. President, last year, 2014 was the year of the worst casualties for the Afghan army and the national police force in the 13-year war. And you have almost three dozen, 700 civilians who died. So, in these circumstances does it make sense for American troops to withdraw on the same schedule? Wouldn't you like to see perhaps even more American troops for the time being while the fighting seems to be in its full force?

GHANI: What we need to realize is that 2014 was a year that we faced three transitions simultaneously, a political transition where authority for the first time was transferred from one elected president to another, a security transition where the combat of the international community, particularly that of the United States ended. And third, an economic transition. Our enemies were banking on collapse of authority. Because of that, they challenged us. But what I'm gratified to share is that during the last six months, the Afghan national security forces have really shown their metal. Now we are not in a defensive position, we have taken offensive.

ZAKARIA: The U.N. envoy to Afghanistan reported just recently to the Security Council that ISIS, which you call DAESH, is actually on the rise in a sense in Afghanistan that there are stray insurgents that are affiliating or declaring loyalty to ISIS. What do we make of that? Why is that happening?

GHANI: The reason it's happening is because collapse of Yemen, Syria, Iraq has created an environment where instead of one weak link in the interrelated system of states, now there are wider spaces. They have it's one of the most well-endowed -- well financed organizations and the techniques are spreading.

ZAKARIA: Mr. President, you asked for flexibility. You asked the Obama administration to think about essentially delaying the withdrawal. How would you react to the average American who would say we've been in this war for 13 years? It's lasted a lot longer than World War II or Vietnam, why shouldn't we just get out?

[10:40:02]

GHANI: Well, the first point is that I'd like to pay tribute to the Americans, I believe, 2,215 who paid the ultimate sacrifice. Over 20,000 Americans that have been wounded. Hundreds of thousands of Americans, men and women, who have seen combat in Afghanistan. They have gotten to know our valleys, our deserts, our mountains. They have stood shoulder to shoulder with us. The result is that America has been secured. Thank God. There's been no terrorist attack on mainland the United States. We have been the frontline. Meanwhile what needs to be underlined is while tragedy brought us together, there are common interests that now can be articulated very clearly. The threats that we are facing on a daily basis, were they, God forbid, to overwhelm us, will threaten the world at large, the experience of Iraq, Syria, Yemen, Libya are now examples to draw on and to understand that when a partner that does not believe in unity and good governance and its own responsibility is not in place, things fall apart.

ZAKARIA: Ashraf Ghani, president of Afghanistan, thank you so much sir.

GHANI: Thank you. ZAKARIA: Next on GPS, the great writer Michael Lewis, has written many bestsellers on many topics, but Wall Street was his first muse and it's a topic he keeps coming back to. What do we need to understand about how Wall Street has changed and hasn't changed in the last years?

(COMMERCIAL BREAK)

ZAKARIA: The last week's stress test of America's biggest banks were a reminder that the reform of the banking sector remains an important and ongoing project. Some of the biggest names in banking like the Bank of America are struggling to meet the new standards. After the crisis of 2007 and '8, we were all sure that banking would not be the same again. But has it changed? And if so, how? I decided to ask someone who has observed and written about Wall Street for 25 years. Michael Lewis's seminal 1989 book "Liar's Poker" was for many people a primer on what actually went on inside those once hallowed halls of Wall Street banks. He wrote the book after a three-year stint at Salomon Brothers in the heavy 1980s, a job he got straight out of school. And last year he published "Flash Boys" which helped us all understand what Wall Street is up to these days. I asked him to come in and give us his own update.

(BEGIN VIDEO CLIP)

ZAKARIA: You were still part of a Wall Street where the stuff that was happening, the action was human relationships and people and God - and now it's all computers.

MICHAEL LEWIS, AUTHOR, "FLASH BOYS": It's moving that way. It's that all, but close. I mean all the markets are becoming automated, the training is done at light speed by machines. But people program the machine. So it's the person who's running the logic, who's creating the rules for how this thing is going to trade. And yes, the Wall Street in "Liar's Poker" is a Wall Street where you are still shouting in telephones at people.

And it's getting complicated, but it's still comprehensible. That's one of the great things, is that how much harder this stuff has gotten to explain. I mean it was a bit of a struggle in "Liar's Poker" to explain what a mortgage bond was, I mean that was a new thing. But trying to explain that collateralized debt obligation or high frequency trading program is so much harder. I mean it's just gotten - the complexity is of great ...

ZAKARIA: And there seems to me there're two sort of different trends here. On the one hand, technology is disintermediating people in the middle who kind of collect fees, and that's Wall Street. Right? So, the technology, is in a sense, almost getting rid of Wall Street.

LEWIS: Correct. On the other hand it's creating so much complexity and opacity that you need some gatekeepers and maybe that's where Wall Street reinserts itself.

ZAKARIA: Well, that I think - I put it different way. I agree with you totally. That technology is creating a world where much of what Wall Street is supposed to do, bringing the other buyers and sellers of securities, lenders and borrowers, is going to be - the function is going to be -- it's not going to be necessary. So you're looking at an industry that's figuring out how to preserve revenues, to create revenues where the old revenue sources have dried up. And one of the ways they do it, is by creating lots of unnecessary intermediation in the automated markets.

So, I think that's something to watch. I wrote a book about this in the stock market. But I mean I think it's going to happen in the other markets, too. But it's not that it's a less legitimate function. And I think you talk to people on Wall Street now, the people in big firms, it's not exactly despair. But there's a sense of having lost their way a bit. Like the purpose of the institution is not as clear as it was when I was in one of them. And he - so ...

ZAKARIA: Do you think young people still flock to Wall Street in the way that you did? You know, you're an art history major, right?

LEWIS: They do. They - they do. There have been blips in the last 30 years. This has been the great - I mean it is amazing what happened in the 1980s. What happened in the 1980s is, the kind of young person who went to Wall Street changed. It went from being the person who was in the bottom of their class at Yale to the person who was at the top.

[10:50:00]

LEWIS: And the person at the top of the class in Yale can cause a lot more trouble than the person at the bottom of the class at Yale. And they became to draw more and more really talented, really smart people. And the draw - the draw is you won. There are real barriers to entry. So, after a year or two, you can be an important person in the financial market. So, that's very appealing. But if you don't - you know, if you're 20 years old and consumed with anxiety about what you're going to do in this world, Wall Street gives you a very easy answer. Because it gives you - the money becomes the justification. I'm making a lot of money is what I'm doing. So, is a draw for a particular kind of person? Very bright without particular ambition. They don't want to necessarily change the world. The change the world types go to Silicon Valley or go into teaching or go into other things. Sciences, artists, write books. But they - but the - I don't want to change the world. I just want to be a success type. They go to Wall Street.

ZAKARIA: Do you think that this - the kind of social milieu that you describe in "Liar's Poker" still exists? Very male kind of frat boyish.

LEWIS: Much more nuanced. So the social world in "Liar's Poker" there were strippers on top of the desk every week and nobody thought anything about it. And gambling on the trading floor, and obscenity, and vulgarity. It was all very open. That became totally unacceptable pretty quickly after "Liar's Poker" came out. And the firms became much more corporate and sensitive to their public images and wanted at least seem as if they were open to women coming in and working at them. And they have taken -- there are many more women actually in the places.

But if you look more closely, what you see, a couple of funny things. I mean one is, the women are kept largely separate from the risk taking decisions. That they are not - they are not - women are not heavily represented in the big gambling operations. The hedge fund, the trading, the big trading jobs on the trading desk. So that's one thing. The other thing is, I couldn't help but notice after the financial crisis that women ascend to positions that are sufficiently senior, that they can be plausibly blamed when things go wrong.

So you have, you know, it was amazing. Every institution seemed to have a woman that had her head lopped off at the end of the - in the middle of the financial crisis. They were disproportionately whacked for what happened - and they had very little to do with it. So, I don't feel - it's a fair environment for women. It doesn't feel that way. But it feels like - it looked on the surface it looks fair.

ZAKARIA: If you came out of Princeton today, art history major, didn't know what you wanted to do, what do you think you would do?

LEWIS: I think I would probably go right to writing without the material. Because I - I couldn't get a job on Wall Street. I think that the way I got in even then was I sat next -- at a dinner party next to the wife of a man who ran Salomon Brothers internationally and he was scared of her and what she said hire him and he hired me. And I don't know if that works that way anymore.

So, I suspect that's what would have happened. I think I would have - I knew I wanted to write when I got out of college. I just didn't know what I wanted to write about. And Wall Street gave me my first material and it was incredibly rich and got me offset in a certain trajectory of my career. I think I would have had to do it a different way.

ZAKARIA: And we wouldn't have had "Liar's Book".

LEWIS: No, but you might have something deeper and richer, maybe about religion.

ZAKARIA: Michael Lewis, pleasure to have you on.

Next on "GPS," what country imports more arms than any other in the world? The answer might surprise you. We will tell you, of course, when we come back.

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ZAKARIA: Earlier this week, Prince Charles and Camilla, the Duchess of Cornwall visited the White House. Charles is, of course, the heir apparent to the throne, the next in line for the British monarchy.

It brings me to my question of the week. Who was the first British monarch to visit that nation's former colony that is the United States? George V, Edward VIII, George VI or Elizabeth II. Stay tuned, and we'll tell you the correct answer. Last Sunday was the Ides of March, the anniversary of the day when

Julius Caesar was murdered in the Roman forum, 2059 years ago. This week's book is a new history of that episode, "The Death of Caesar, the Story of History's Most Famous Assassination." The author, Barry Strauss, is the classics professor at Cornell and knows his stuff, but he presents the story in simple elusive prose. There's too much set up. So, stay with it for the first 50 pages, and then it turns into a fascinating murder mystery with some nice twists and turns and sheds light on one of history's great tragedies, the fall of the Roman republic.

Now, for the "Last Look." The worldwide defense market reached a record $64 billion in 2014. That's according to the IHS Global Defense Trade Report published this month. So, who do you think is the world's biggest arms importer, Russia, China, India, the United States? It turns out Saudi Arabia overtook India as the world's top importer of arms in 2014. It may be surprising to see Saudi Arabia at the top of this list or to learn that the kingdom will singlehandedly account for one out of every $7 spent on defense imports in 2015, but if you look at a map you can understand why. Tensions throughout the Middle East, fears of a nuclear Iran, and of ISIS is antics in Saudis backyard are surely behind the increase.

India was the second biggest importer last year and China was the third. The small country of the United Arab Emirates was the fourth largest weapons importer in the world followed by Taiwan. Overall, the global defense market rose by more than 13 percent last year, so perhaps everyone is feeling tense.

The correct answer to our "GPS" challenge question was C, in 1939 King George VI visited Washington, D.C. and Hyde Park, New York, at the invitation of President Franklin Delano Roosevelt. They took him to sights and even a picnic where the king and queen were served hot dogs.

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ZAKARIA: Thanks to all of you for being part of my program this week. I'll see you next week.