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FAREED ZAKARIA GPS

Interview with Gary Johnson; Interview with Richard Haass; Toilet Race Between India and China?;; Billionaires and Economic Strength; Changing the Travel Industry; North Korean Newspaper Praises Trump. Aired 10-11a ET

Aired June 5, 2016 - 10:00   ET

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


[10:00:26] 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 have a great show for you today and here is where we will start. Many Americans want an alternative to Trump and Clinton. So is this man the answer?

One week ago, Gary Johnson was named the nominee of the Libertarian Party. I'll ask him why he's running.

We'll stick with the 2016 campaign and talk about Clinton versus Trump on foreign policy. The former secretary of state laid out her case this week.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: This is not someone who should ever have the nuclear codes.

(END VIDEO CLIP)

ZAKARIA: Richard Haass and I will analyze.

Also billionaires. A fascinating new book says studying them could reveal tons about the countries where they live.

What do Russians oligarchs tell us about Russia? What do Saudi princes tell us about the desert kingdom? And what does Donald Trump tell us about America? You'll find out.

Finally, meet an actual billionaire. Airbnb's Nathan Blecharczyk and the modest beginnings of his now booming business and why despite his great wealth he still rents out a room in his own home.

But first here is my take. As the conflict in Syria has raged and spilled over its borders, I've been skeptical that there is an American military solution to the complex political and religious problems at the heart of this crisis.

I remain skeptical and I'm glad that the Obama administration has been reluctant to engage in a large-scale humanitarian intervention. But I'm saddened that it has not engaged in large-scale humanitarian action.

For most of the last 75 years, the United States has been the world's humanitarian leader. It has provided the most foreign aid and has re- settled more refugees than any other country. Not anymore. On refugees, the United States has become an international embarrassment. It has pledged to take in just 10,000 Syrians, but last year actually accepted only 2,192 and is struggling to take in more despite the fact that thanks to the distance from the conflict, it could be highly selective.

Meanwhile, Canada, with a population of about a tenth of America's, has already re-settled 25,000 Syrians. For its part, Germany has registered nearly half a million applicants for asylum in 2015 alone, according to the "New York Times."

But the world's richest countries are being put to shame by some of the poorest. Lebanon now has more than a million registered refugees making up a quarter of the country's population. Jordan is not far behind with about 650,000. And Turkey houses nearly three million. These countries need aid on an entirely different scale than they are receiving right now.

In addition, Washington has traditionally taken the lead in setting the agenda for humanitarian action. Corralling other countries to make donations, accept refugees and provide forces for peace-keeping operations.

The administration is now acting on several fronts. But it is still not commensurate with the enormity of the suffering.

Syria is a human tragedy of epic, historic proportions. What Washington can do is to try to respond to the crisis with a set of humanitarian efforts that are equal to the scale of this tragedy. President Obama should address the American public and describe the human suffering, remind us of our nation's best traditions and urge that Congress support him in providing more aid, receiving more refugees, and leading in greater collaborative efforts internationally.

He should appoint George W. Bush and Bill Clinton, the country's special ambassadors for humanitarian action on Syria.

I know, I know, America's mood today is in exactly the opposite direction. Donald Trump will criticize him, Republicans will raise the specter of terrorism. But they are wrong and he should say so.

Americans have actually always been wary of taking in refugees. Large majorities oppose taking in German refugees, that is to say Jews in the 1930s, and even following World War II, after we had learned about the holocaust.

[10:05:06] Fifty-five percent oppose taking in Hungarians after the Soviet invasion in that country in 1956 and 57 percent oppose taking in boat people from Indo China after the fall of Saigon. But America's leaders insisted and all of these groups were accepted,

assimilated, and have become vital parts of American society.

The problem is not one that affects the political right or the Obama administration. Where is Bernie Sanders, who is very concerned about Americans who can't pay for college, but seems largely indifferent about Syrians who can't manage to stay alive? Where are the world's rock stars who sang "We are the World" and staged a Live Aid concert to fight poverty in Africa?

Millions of Syrian men, women and children, innocents, are fleeing their homes, living in squalor and losing their lives. Where are all of us?

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

Donald Trump is the presumptive GOP nominee. On Tuesday Hillary Clinton will almost surely become the presumptive Democratic nominee. But America has at least one candidate who is an actual official announced nominee of his or her party.

Last weekend in Orlando, Florida, the Libertarian Party named Gary Johnson its presidential contender. Johnson is a former governor of New Mexico. He joins me today from Santa Fe.

Thanks for joining us, Governor.

GARY JOHNSON, LIBERTARIAN PRESIDENTIAL NOMINEE: Thank you for having me on.

ZAKARIA: Governor, whom are you trying to appeal to? You must feel there is an underserved voter in this election with the two choices presented. Who is that person you are trying to appeal to?

JOHNSON: Well, when 50 percent of Americans now, when they are registering to vote are declaring themselves as independent, I think I'm trying to appeal to the majority of Americans whom I think are libertarian it is just that they don't know it. And libertarian, with a broad brush stroke, fiscally conservative, socially accepting liberal.

ZAKARIA: And when you say that, what is the big break in terms of the orthodoxy of the Republican Party for you? You are pro-choice. You are pro-gay marriage. You are even in favor of the decriminalization of drugs?

JOHNSON: Yes. Legalizing marijuana and let's stop with these military interventions that at the end of the day make the world a less safe place. The unintended consequence of these military interventions.

ZAKARIA: So I think that's all going to sound like music to the ears of many people on the left, who think the Republican Party is too socially conservative and interventionist. Now tell us what your views on economics are because libertarians traditionally have believed in a very, very small state. So-called night watchman state that really takes care of defense, a few other things. Where do you stand on that?

JOHNSON: Well, the government is too big. It tries to accomplish too much. So at the end of the day, it taxes you and I too much. That's is money out of your and my pocket that we could be spending on our own lives, enjoying our own freedoms and liberties as we see fit. So with regard to Hillary Clinton and the Democrats, at the end of the day, I think they are going to grow government because government is the solution to everything, which I'm not going to argue it is not. And at the end of the day, it is going to tax more.

Hillary Clinton, I also believe, has been the architect of our foreign policy, which in my opinion has made things worse, not better, in the world. So we are not isolationist by any means. Let's use diplomacy to the hilt, let's involve Congress in declaration of war. Let's involve Congress in how we move forward with regard to our military, something that they have completely abdicated to the executive and to the military.

I believe we have treaties with 69 foreign countries that we are obligated to defend their borders and none of those treaties were negotiated or signed off on by Congress. They were executive treaties.

ZAKARIA: Let me ask you a little bit more about one of the things you said.

[10:10:04] You talked about the decriminalization of marijuana but in another interview you said that the world would be a better place if all drugs were legalized.

I just want to understand, you know there is an epidemic of opioid use, heroin is a pretty dangerous drug when used often, even in small quantities. You are saying that the world would be a better place if everything were legal?

JOHNSON: Well, it would be. 90 percent of the drug problem is prohibition-related, not use related, and that's not to discount the problems with use and abuse. But that should be the focus. So using this epidemic that right now is being -- is being really told to us by the government, it's estimated that 450,000 people every year from their use of tobacco. It's estimated 100,000 people die every year from alcohol use. It's estimated that 100,000 people die every year from their use of legal prescription drugs. Painkillers, antidepressants.

How many people die every year from cocaine and heroin overdose? Well, it's 8,000. It's 8,000 deaths which is significantly lower. Now I'm not advocating the legalization of any drugs outside of marijuana. But I think that the world -- I think the United States will take a quantum leap when it comes to understanding drugs and drug abuse and I think when we come to that quantum leap, which we are here right now, I think marijuana is going to get legalized, I think we start by decriminalizing the use of other drugs.

ZAKARIA: Who do you think, Governor, you are further away from ideologically, Hillary Clinton or Donald Trump?

JOHNSON: You know, I think it's about a 50-50. And I'd like to say, you know, there are good things on both sides, but when it comes to Hillary, I think at the end of the day, she is going to grow government. I think that taxes are going to go up. I think militarily things aren't going to change at all in the world.

When it comes to Donald Trump, deporting 11 million illegal immigrants, that is really wrong-headed, building a fence across the border, his declaration that Mexicans are murderers and rapists, when in fact they are law-abiding citizens, more law-abiding than U.S. citizens. They are not taking jobs that U.S. citizens want.

When he says he is going to kill the families of Muslim terrorists, when he says he's going to bring back waterboarding or worse. When he says he is for free market but then in the next sentence he says he's going to force Apple to make their iPhones and their iPads in the United States. When he says he's going to apply a 35 percent tariff on imported goods, who is going to pay for that? Well, on and on and on.

ZAKARIA: It sounds to me like you have more problems with Trump.

JOHNSON: Well, broad-based, I can point to specifics when it comes to Trump. Hillary, I could probably point at all those same specifics. Bill Clinton was in New Mexico here campaigning for Hillary and he was talking about free electricity for those on the Reservation. Well, free, who pays for free? Nothing is free. And that seems to be the Democrat mantra forever is get it for free. We'll give it to you for free. Well, there are those of us that at the end of the day have to pay for that.

ZAKARIA: Governor, pleasure to have you on. Thanks for joining us.

JOHNSON: Fareed, wonderful to be on with you. Hope we can do this again. Thanks.

ZAKARIA: Next on GPS, we will talk more about those other presidential candidates and their foreign policy ideas. What would Donald Trump do as commander-in-chief?

Well, on Thursday Hillary Clinton told us in a scathing attack on her presumptive opponent. I'll ask Richard Haass, veteran Republican foreign policy expert, what he thought of it when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[10:18:17] HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Donald Trump's ideas aren't just different, they are dangerously incoherent. They are not even really ideas. Personal feuds and outright lies.

(END VIDEO CLIP)

ZAKARIA: That was Hillary Clinton talking about Donald Trump on Thursday. And it got harsher and more direct, even more personal in its attacks. The speech was bold. But will it work?

Well, I've asked Richard Haass, the president of the Council on Foreign Relations who worked for three Republican presidents, to join me. Thanks for coming.

RICHARD HAASS, PRESIDENT, COUNCIL ON FOREIGN RELATIONS: Thanks for having me.

ZAKARIA: So what was your central reaction to Hillary Clinton's speech?

HAASS: More of a political speech than a foreign policy speech. She didn't defend her record, she didn't lay out a vision, but she raised some serious questions about Donald Trump, about his temperament, about his knowledge and his positions on various issues so I thought in terms of the campaign, it was probably her best moment to date.

ZAKARIA: So in a sense, she made it a referendum on Trump rather than on her. That seems a pretty smart strategy.

HAASS: Absolutely. And in a funny sort of way, each candidate is going to have the same strategy. So she's going to make the campaign a referendum on Trump, on his temperament, again, on his competence, knowledge. He's going to make it, I would expect, on her character and on her past performance. So we're likely to have each candidate trying to raise fundamental questions about the other.

ZAKARIA: What I thought was so effective about it was that she went after the sort of central narrative of Donald Trump which is America is in decline and she punctured it but in doing so of course she appropriates for herself American patriotism. She comes across as the person who believes in America, thinks it's exceptional, thinks it's big-hearted and he comes across as the guy who doubts it, is pessimistic about America. It is sort of a role reversal.

[10:11:00] HAASS: Absolutely. You have a Democrat to the right of the Republican. You have a Democrat who sounds more like Ronald Reagan than the Republican. She has put herself in some ways firmly in the foreign policy mainstream and has essentially argued that the United States has prospered in the world strategically and economically for generations now.

The world is not a -- it's a dangerous place. But it's not an anti- American, unfriendly place unbalanced in terms of our interest. Donald Trump is arguing a much more negative view of the world, that it's a place where Americans get ripped off, where we lose, which is an odd argument to make in part because, you know, we did win the Cold War. All things being equal we are the most powerful country in the world and we have prospered in every sense of the word now for decades.

ZAKARIA: You read Donald Trump's speech as well. You've also spent time with him. What are his foreign policy ideas?

HAASS: As best I can tell, it is a very transactional approach. Rather than think about relationships, you always think about transactions with allies or adversaries. It's a minimalist view of the world. The world isolation seems freighted so let's just use the word minimalist. Very concerned about interventions that have cost more than they benefit the United States. Suspicious of the world. Whether it's free trade or anything else.

Essentially when the United States interacts with the world, we end up losing, whether it's economically losing, losing in terms of human resources, in terms of influence so he wants to have a narrower, and more transactional approach with the world and in some ways an economic nationalist, outside of the traditional bipartisan mainstream.

ZAKARIA: All right. I asked you this the last time you were on. I have to ask you again. You've spent time with Trump, he has named to this point only two people, Senator Sessions and you as the people he admires on foreign policy. Anything you've heard since make you feel you could -- you could support him, you could endorse him, you would work for him?

HAASS: I think I've also spent time with Hillary Clinton and I gave you the same answer. That before you could work for any president, there would have to be a serious alignment in your foreign policy views. You wouldn't have to agree on every issue but you would have to agree on the big issues. You'd also need to agree on the conception of the job but I would say from what I've heard there is still some fundamental differences between Mr. Trump's view of the world and America's role of the world and my own.

I'm pretty declared. I've written a number of books. I've been out there. I've worked for three Republican presidents, one Democratic president. I've got a record and I would simply say that, you know, that speaks for itself. What he's done it speaks for itself and there is a gap between the two.

ZAKARIA: And I think it's fair to say that you are closer, having read most of your work, your views are closer to those of Hillary Clinton as she states and then as she practiced them as secretary of state.

HAASS: Sure. I mean, I am a believer in free trade. I am a believer in American alliances. I am a believer in American leadership and working with others, working with international institutions. And again, when I look at the course of history, I believe this country has more often than not benefited from its interventions in the world, its interaction with the world. And when we've made mistakes they've really been self-inflicted. Vietnam, the Iraq war.

This wasn't the world doing it to us, Fareed. As you know, this was us doing it to ourselves. But when we've been wise and how we've acted in the world and avoided either trying to transform it or to avoid it, when we found that middle course, that's our sweet spot and we have a lot to show for that.

ZAKARIA: Do you think that -- that Trump's views are likely to evolve, that he, you know, listens to people? Where do you see this going? HAASS: Look, that's the 64 -- I don't know if it's thousand dollar

question anymore if inflation has taken hold. We haven't seen signs of it much yet. Whether it's in his political action or in his foreign policy. One word, you know, I hope so, if he were to be elected, because again, the stakes would be enormous and the inbox that will greet whoever is elected, the 45th president, will be as daunting and as demanding as it's ever been.

You're going to inherit anarchy or new anarchy in the Middle East. The return of geopolitics in Europe. Uncertain Asia. All sorts of gaps between global challenges and global arrangements. So you want the next president to really pursue a smart, steady course. So I would hope that Mr. Trump, if he were to be elected, yes, I would hope he would surround himself with thoughtful people and yes, I would hope that he would pursue a foreign policy more within the 30 or 40 yard lines on the field rather than one more towards the end zones.

ZAKARIA: Richard Haass, pleasure to have you on.

HAASS: Thank you.

ZAKARIA: Next on GPS, the U.S. and the USSR had the space race, now India and China seem locked in a heated race of a very different kind. A race to see who can build the most toilets. Why in the world? We'll explain when we come back.

(COMMERCIAL BREAK)

[10:28:38] ZAKARIA: Now for our "What in the World" segment. First, there was the space race between the Soviet Union and the United States.

(BEGIN VIDEO CLIP)

NEIL ARMSTRONG, AMERICAN ASTRONAUT: That's one small step for man, one giant leap for mankind.

(END VIDEO CLIP)

ZAKARIA: Now two of the world's largest economies are engaged in, well, a toilet race.

"What in the World?"

That's right, the world's two most populous countries are vying to modernize and they are both making potties a national priority. India's prime minister Narendra Modi and China's president Xi Jinping have launched initiatives to usher in an era of improved public health and at the heart of it is more toilets.

We take it for granted but 2.5 billion people around the world still do not have access to adequate sanitation according to the U.N. That's almost four out of every 10 people on earth. And the populations of India and China are the worst off. Over 770 million Indians don't have access to a toilet at home. Neither do 329 million Chinese, according to Water Aid. What does that mean? Well, if you have visited either country,

especially India, you would have seen or smelled it. Indeed, more Indians have cell phones than toilets, according to India's census.

[10:30:00] So Prime Minister Modi is tackling the problem and has coined the superb mantra, "Toilets Before Temples."

(APPLAUSE)

You see, many Indians are happy to build temples, less eager to spend money on plumbing. Modi has offered financial incentives to build private toilets in every home and and has pledged to end open-air defecation in India by 2019.

But Modi's plan has fallen well short of its targets. Government data shows that, as of March, India has fallen 47 percent short of its construction target for household loos.

China is also undergoing a so-called "toilet revolution." China's central government has earmarked money for toilets in an effort to meet U.N. targets and, among other reasons, to boost tourism. You see, Western tourists don't look kindly on traditional Chinese facilities.

As in so many areas, China is beating India hands-down. The Financial Times reports that the revolution is well under way and government agencies say that China will meet the U.N. targets. There is even a "Trump" toilet in China, which the manufacturer claims was not inspired by the presidential candidate. "Make pooping great again," Foreign Policy declared.

Potty humor aside, the economic benefits of all this are very clear. The World Bank estimates that, in 2006, inadequate sanitation cost India what amounts to 6.4 percent of its GDP. Globally, the U.N. estimates that lack of proper sanitation and water cost developing countries about $260 billion each year. More importantly, there is the loss of human capital. A child dies because of poor sanitation every 20 seconds, according to the U.N.

Investments in sanitation don't just reduce costs; they also yield economic benefits. The U.N. calculated the savings in time, health care bills and enhanced productivity, among other things, and found that every one dollar spent on sanitation produces a whopping return of $9. So we should all hope that China and India can keep up this competition, one in which both will eventually be winners.

Next on "GPS," what do Mark Zuckerberg, Carlos Slim, Donald Trump and Mukesh Ambani have in common? They're all billionaires. And in a moment you will hear how counting a nation's billionaires can tell you if a country is at risk.

Is the United States? The answer, when we return.

(COMMERCIAL BREAK)

ZAKARIA: Bill Gates, Warren Buffett, Mexico's Carlos Slim, Michael Bloomberg, the Wal-Mart heirs, and how can we forget Donald Trump -- all billionaires and all people we hear about all the time, especially that last guy.

But despite all that we hear about billionaires, we don't actually understand that they can tell us a lot about the strength of an economy.

Ruchir Sharma, the chief global strategist at Morgan Stanley Investment Banking, looks at them and uses them as a prism through which to see the world. It is one of the many fascinating insights in his superb new book "The Rise and Fall of Nations." He's here to tell us his secrets.

So the first thing you point out is billionaires are rising worldwide, big time. You have a chart that shows this. And you look at, from 2009 -- and this is, now, the beginning of the greatest recession in the world since the Great Depression -- you have had an 80 percent rise in billionaires.

Is this all over the world?

SHARMA: Yeah.

ZAKARIA: I mean, pretty equally distributed, in a sense; it's the rich countries and Russia and China and India?

SHARMA: Yes, that's true. But I think that the study -- the disturbing part about this chart is that the United States has seen one of the biggest increases in billionaire wealth over -- since 2009. And one of the reasons for that, I think, is the fact that we've had such easy-money policies in the U.S.

So if you give people -- rich people free money, they know how to make more of it. And I think that's really what's double-charged this billionaire list since 2009.

ZAKARIA: So if you look at the U.S. -- and you have a chart on that, too -- what you see is this very impressive -- impressive rise. And it's happened in all industries. It's basically because billionaires have capital and the stock market has -- has gone up; real estate has gone up, right? That's -- that's the story behind this?

SHARMA: Yeah, because, like, the real issue with 2009 is this has been the weakest economic recovery in history. And yet the stock market gains have been among the strongest in history. And that has lifted the wealth of many rich people because it's really the rich who own stocks in a disproportionate manner.

ZAKARIA: Right. So now we come to the -- the heart of what you look at, which is what can the billionaires tell us about the overall economy's health and strength?

And you have this chart which shows billionaires' wealth as a share of GDP. And so you take a look at it and the blue is the -- the average. And here you see something interesting, which is the U.S. -- of the major countries, which I should be clear it's not every country, but the major countries we've looked at, it's very high. But so is Russia; so is India. What -- how to make sense of this -- of this chart?

SHARMA: Yeah, no, I think that, as far as the U.S. is concerned, it used to be in line with the global average of 10 percent for a long period of time. But in the last few years, this has exploded and has gone to about 15 percent.

So I think this is a -- a bit of a concern that, in the U.S., you are seeing this big explosion take place. Now, I think wealth creation is critical for any country. That's at the heart of any capitalist society. But the problem is that, when you begin to get far too many billionaires, it, sort of, starts to lead to a backlash against too much wealth being created among a few people.

And I think that's what you're seeing here in the political conversation, as well as in this campaign. So on this, the United States, for example, clearly flashes red.

But if you look at the next vector, you find that this is quite positive for the United States, which is what -- which is that the real mood against wealth in a country turns negative when that wealth is being created in corruption-prone industries. The leading example, again, is Russia. And here, too, Russia and Mexico top the list. And this is where the United States ranks pretty well, which is that the bulk of billionaires in this country come in industries such as technology and other industries like pharmaceuticals. And when you have wealth in those industries, I think people, sort of, respect those billionaires.

But in countries like Russia, Mexico, it would be impossible for a billionaire in those countries to run for office in those countries, because those countries have such hostility toward the rich out there.

ZAKARIA: Because it's all seen as gotten through government permissions and grants and special ties?

SHARMA: Yeah. Yeah, so I think that's the really big difference and something which is much positive as far as the United States is concerned.

ZAKARIA: But there is one other final chart that we have, which is the share of billionaires' wealth from inheritance. And this is something, actually, a number of the lists track. And there the U.S. is average. I wouldn't be surprised if that has risen a bit over the last 10 or 15 years because there is this feeling that great wealth is now being able to be passed down in a way that it isn't -- do you find something interesting here that you notice about the health of an economy?

SHARMA: No, but even on this vector, I don't think the United States is doing that badly because the averages are slightly depressed because of countries like Russia and China. And there, there was no scope of inherited wealth because they were Communist countries, which...

ZAKARIA: Right, right. SHARMA: ... you know, where the wealth creation has been much more recent.

ZAKARIA: Right.

SHARMA: But I'd say the real problems are in other countries, like take what's happening in Asia. Take the case of India, where, like, more than half of the billionaires there have really inherited their wealth in some ways. Now, they've made something out of it, but they have inherited it as well. The good news is the fact that, on two of the three vectors, the U.S. ranks fairly OK. So therefore I think that inequality has still not become such a big issue where it begins to completely dominate the political landscape and also explains why you have someone like Trump who is able to run in this country, despite the fact that he's a billionaire.

In most of those countries, there's no chance that a billionaire would ever be able to run for office because he or she would be much too busy hiding behind, sort of, closed doors and in hotel lobbies. They walk around in a very, sort of, discreet manner. This is very different in the United States.

ZAKARIA: So what I love is that, in a 450-page, serious book about the future of -- the present and future of economics, all roads still lead to Donald Trump.

(LAUGHTER)

Ruchir Sharma, thank you very much.

Up next, I will talk to an actual billionaire from a non-corruption- prone industry, one of the founders of Airbnb, the site that has drastically altered the way people travel today and one that wants to disrupt that industry even more.

(COMMERCIAL BREAK)

ZAKARIA: Welcome to the original Airbnb. This is actually a re- creation of the apartment which the three founders of Airbnb lived in and which led to the company that now has around 2 million rooms for rent in 34,000 cities around the world. The Wall Street Journal has reported that the company is being valued at $24 billion, which makes each of the three founders a multi-billionaire.

One of them, Nathan Blecharczyk, now joins me. He is the company's chief technology officer.

Nate, pleasure to have you on.

BLECHARCZYK: Thanks so much for coming by.

ZAKARIA: So this is pretty much the apartment that the three of you were in, and then you left, right?

BLECHARCZYK: Right. Well, we were all roommates before we started this company. And then suddenly the rent on our apartment was raised 25 percent. And I said, "That's too expensive. I'm out of here."

But the two other guys, they wanted to stay, but they had just quit their jobs to become entrepreneurs, also known as unemployed...

(LAUGHTER)

... so they didn't have any money, either, and they got the idea, though, to rent out that extra bedroom to designers who were coming into town for a conference but all the hotels were sold out. So they -- they rented out this room. The room had no bed, but Joe set up an air bed. And instead of calling it a bed-and-breakfast, they called it an "AirBed-and-Breakfast." So Airbnb is short for "AirBed-and- Breakfast."

And meanwhile, they hosted three designers, made $1,000, and they all went to the conference together, hung out. Joe and Brian showed them around town. They got a really local experience. And based on that win-win, the three of us got together and started to -- started this company. That was eight years ago.

ZAKARIA: Now, what's striking about it is it's a real collaboration between, if you will, kind of, the arts and computer science, right? Because you're the techie; you're the guy who was a computer science major in college, but they're artists or designers, in a sense?

BLECHARCZYK: And I think that's responsible, actually, for a lot of our success. Because what we're doing requires so much trust. And so, really, designing the whole experiment -- experience -- was incredibly important, I think, for establishing that trust. But, of course, it also took technology to scale it.

ZAKARIA: But trust is at the heart of it, right? I mean, how do you -- I think everybody, when they hear about Airbnb, thinks, "Wait a minute" -- on both sides of that transaction -- "would I just walk into some stranger's house and what do I -- what if they're weird?" And the person renting worries about the fact that the person coming in might be weird. How do you get over that?

BLECHARCZYK: So the core of it is how we handle payments, reputation and user profiles. So -- so for payments, as a guest, when you see something you like, you pay Airbnb. Airbnb, the company, holds your money until after you arrive. That way, if you need to cancel or you show up and something's not quite as expected, you can call us 24/7 and we'll give you your money right back.

So meanwhile the host knows that, in order to get paid, he has to deliver on what was promised in the profile.

Now, when the transaction's over, the guest reviews the host; the host reviews the guest, so both parties start to accumulate a reputation. And indeed, if you look on our website, you'll see the homes. Many of them have dozens, if not even hundreds of reviews left by people who actually stayed there. So you can get, like, a whole 360-view of, kind of, what is this property from the eyes of different people who actually stayed there? And same for the guests -- the guests are accumulating reputations. So, as an owner, nobody stays in your home without you saying, kind of, yes or no. And when you say yes or no, you see everything about the guest. You see their picture, where they went to school, where they work, why are they coming, and their past reviews.

ZAKARIA: Now, is it true that you actually rent out a room in your house in San Francisco?

BLECHARCZYK: Yeah, I have a guest there right now. Yes, I have guests all of the time.

ZAKARIA: And, you know, this is not just a P.R. gimmick. You're actually renting it many, many nights a month?

BLECHARCZYK: Most nights a year, I have someone in my home, yes. I've had hundreds of people in my home, yes.

ZAKARIA: You don't think it's intrusive?

BLECHARCZYK: This is what our company is built on. So if it doesn't work for me, how's it going to work for other people?

ZAKARIA: There's another interesting thing about the founding that struck me, which is you are all East Coast guys, in a sense. You know, the other two founders went to Rhode Island School of Design. You went to Harvard. San Francisco ended up being the magnet. Why?

BLECHARCZYK: Well, for me, personally, I was working after college on the East Coast as a software engineer. And I just wasn't being challenged. I wasn't learning. And I was reading about this place out here, Silicon Valley, and really inspired by those stories. And so I came out here to join a start-up. You know, this is the start-up mecca, and that's because it's been 50, 60 years of history of an eco- system developing of venture capital and all the resources you need and -- and mentors.

ZAKARIA: Do you think that Airbnb has a new set of challenges it has to deal with now because there are people beginning to say, "Wait a minute, why don't you have to pay the same kind of hotel occupancy taxes that hotels have to pay? If hotel rooms have to be built to code, whether it's fire codes or handicap access, why do Airbnb rooms not have to?"

What do you answer -- what do you say to those people?

BLECHARCZYK: Well, I say this is a new business model. It's never been contemplated before; it's never been demonstrated before. And so these are all things that we're going to have to think through together. And now that we're at scale, of course, it's attracting a lot of attention; people want to have these conversations.

I think it's a really great thing. It's not something to be avoided. And I think there are innovative solutions to each of those questions. So most of the existing policies that exist were developed 30, 50 years ago. So all we've been saying is that there should be new policies for the 21st Century. Let's create those together. And we've come up with some really great solutions in about 30 different cities or countries. New policies have been passed that are very favorable to home-sharing.

For specific issues like taxes, we've actually created a technology where we can partner with cities and collect the taxes on behalf of the city so they don't have to go through the effort of collecting from all the individuals, which, for them, is prohibitive.

ZAKARIA: Nate, pleasure to have you on.

BLECHARCZYK: Yeah, thank you. Thanks for being here.

ZAKARIA: Pleasure.

Next on "GPS," nostalgia.

(BEGIN VIDEO CLIP)

ZAKARIA: Welcome to the very first edition of "Global Public Square."

A look back at the birth of the "Global Public Square," when we come back.

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ZAKARIA: Amidst all the invective against Donald Trump abroad, this week he received an endorsement, calling him "wise and far-sighted."

It brings me to my question of the week. In what newspaper were those words of praise published this week: Russia's Pravda, Israel Hayom, China's People's Daily or North Korea's DPRK Today?

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

This week's book of the week is Ruchir Sharma's "The Rise and Fall of Nations." Filled with amazing data, as you saw earlier in the show, fascinating insights and revealing anecdotes, this is quite simply the best guide to the global economy today. Whether you are an observer or an investor, you cannot afford to ignore it.

The correct answer to our "GPS Challenge" question is D. North Korea's state-run DPRK Today published an editorial calling the Donald "wise and a far-sighted candidate." One can understand why. Trump has said he would initiate talks with North Korea's leader Kim Jong-un and that he might withdraw American forces from South Korea.

And now for the last look.

You might call it a first look, as it is a look at the first-ever "GPS." On Wednesday we marked the show's eighth anniversary. Much has changed, though I, of course, have not changed a bit.

In that first hour, former British Prime Minister Tony Blair joined me and we talked about the unstoppable path the world was headed down.

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FORMER BRITISH PRIME MINISTER TONY BLAIR: Globalization, which is the force changing the world today at a rapid and extraordinary rate, pushes people together. That's what it does. The boundaries are coming down. You know, the world is becoming smaller. All those cliches are cliches because they're true, right, that's what's happening.

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ZAKARIA: And despite the noisy rhetoric of some, that is still what is happening. I began that show in 2008 by offering my take on the world, although we didn't officially call it that.

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ZAKARIA: I know that, right now, to a lot of people, the world looks like a grim place. Almost every day you are bombarded with frightening headlines, stories of out-of-control governments and terrorists who want to kill you. But beyond those headlines, the picture is actually much brighter. Economic growth and technology are raising people out of disease and poverty every day.

On this program, we'll try to understand the new forces shaping our world, both the good and the bad. And I'll talk to some of the world's great thinkers and doers.

(END VIDEO CLIP)

ZAKARIA: So how did we do? Do you feel better about the state of the world? Do you think we've done a good job?

Tweet us and let us know, #FZGPS. It's been an eventful eight years. I've loved sharing my interests, passions, questions and ideas with you. Thanks so much for spending the time with me. I'll see you right here next week, and for many, many more weeks, as long as you keep tuning in.