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Fareed Zakaria GPS
Global Hot Spots to Watch in 2019; China Pulls Off Historic Moon Landing; Talking about Chinese Economic and Political Issues; How to Make Important Decisions. Aired 10-11a ET
Aired January 06, 2019 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[10:00:18] FAREED ZAKARIA, CNN HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Happy New Year, and welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you live from New York.
Today on the show an in-depth look at what 2019 may bring with it, for America and the world. A nuclear treaty with North Korea? A big beautiful wall on the southern border? A new Middle East crisis?
I will ask Ian Bremmer, Rana Faroohar and David Miliband about that and much more.
Then this week China landed a rover on the dark side of the moon. And weak Chinese sales made Apple miss its target. What can we expect from the other super power in 2019?
I will talk to the man Trump calls the leading authority on China.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He was saying that China has total respect for Donald Trump and for Donald Trump's very, very large brain.
(END VIDEO CLIP)
ZAKARIA: Also, 2019 will surely bring some momentous decisions. How should House Democrats approach their investigations of the Trump presidency? How should Trump deal with China? How should countries deal with the climate crisis? How should anyone approach any decision?
Well, Steven Johnson has written the book about just that.
But first, here's my take. It is nearly the mid-point of Donald Trump's four-year mandate, a good time to take stock of what has been the most unusual presidency in modern times. In fact, one would probably have to go back to Andrew Jackson to find anyone who has occupied the White House with as much tumult, drama and disruption.
Watching his first two years in office what is striking about Donald Trump is that much more any president I have watched or read about, he is a gambler. Unconstrained by precedent, history, norms, or official advice, Trump simply acts on his impulses and his ideas. Sometimes this can be refreshing. He's forced Washington to take a closer look at assumptions about China. He asks what exactly is being accomplished by America's military interventions in the Middle East.
He's focused attention on the problems of the working class in an age of globalization and technological revolutions. But the problem is that Trump's same style, impulsive, erratic, disruptive, means he has no thoughtful policies of his own. His management style is so imperious and narcissistic that he struggles to retain talented officials. He has no background in policy nor any inclination to learn anything about it. So he simply wings it.
The result is that he has many balls up in the air and no clear plan as to how to catch them. He took us to the brink of war with North Korea hoping to get Pyongyang to cave. When it didn't, he simply declared victory and moved on. He has begun a trade war with China with no clear sense of the deal he actually wants. He insults key allies for no reason in service of no strategy. And now he has shut down the government with rhetoric that leaves him little room for a face-saving compromise.
So far the effects have mostly been bewilderment and a sense of unease as people try to understand where all this is leading and whether things will settle down.
Well, let me tell you, they won't. Trump thrives in an atmosphere of chaos where all the attention is focused on him and nothing is ever normal or settled. As the pressure increases from the House Democrats, Robert Mueller, China, expect more impulsive, emotional decision making, not less.
The greatest risk, of course, is that one of these days in one of these arenas one of those balls drops. We have experienced Donald Trump in normal times. What will it be like for America and the world to watch Donald Trump when some great international crisis hits, as it so often does?
Buckle your seatbelts for 2019. And let's get started.
Let's bring in my terrific guests to get their thoughts on 2019 and what the year ahead will bring. David Miliband is the president and CEO of the International Rescue Committee. He was the Foreign secretary of the United Kingdom from 2007 to 2010. Rana Faroohar is CNN's global economics analysts and a global business columnist for the "Financial Times."
[10:05:05] Ian Bremmer is the founder and president of the Eurasia Group, a political risk consulting firm that operates around the world.
Rana, let me ask you, when you look at 2019 it does seem economically we are entering a more troubled period.
RANA FAROOHAR, CNN GLOBAL ECONOMIC ANALYST: Yes.
ZAKARIA: The two great engines of growth in -- over the last decades have been the United States and China.
FAROOHAR: Yes.
ZAKARIA: Both economies seem to be slowing and central banks around the world which have been providing cheap money so that people could get low-interest mortgages and loans seem to be turning off the tap.
FAROOHAR: I think you're right. I think that we are at a real inflection point. And if you just look historically, recovery cycles tend to go in eight to 11-year periods. We're 10 years into a recovery cycle. So if you just take it on historical data we are due for a slowdown probably this year or next year. And I think that that probably is going to be the case.
How quickly it comes and how sharp it is depends on a couple of things. One, how the U.S.-China trade conflict goes. China is definitely slowing down. It was even before there was conflict with the U.S. But it's really feeling short-term pain. I think longer term pain is going to be felt by the U.S. but already you're seeing companies like Apple downgrading their results. You're going to see more companies saying look, China is slowing, our business is not as good there. That's going to hit the U.S. economy.
The other question of course is interest rates. We saw the Fed hike rates, and we see Donald Trump trying to politicize the Fed which frankly is an unforced error, you know. If there's been any institution globally that's done a lot to stabilize economies in the last 10 years it's been the central bankers of the world. But they are at a difficult balancing point. Regardless of what else is happening in politics, there is a big debate right now about how much inflation we can really expect to see.
The numbers are good in the U.S. We have a slowdown in China and Europe. That could affect the global picture. At the same time you have technology spreading throughout lots of different industries that may be slowing inflation. So should they hike? Should they not? That's the big question for 2019.
ZAKARIA: Quickly, you mentioned to me that when you talk to American chief financial officers.
FAROOHAR: Yes.
ZAKARIA: Most of them expect a recession this year.
FAROOHAR: Yes. More than half of CFOs at U.S. big companies expect a recession. About 80 percent of economists think we're going to see a slowdown this year or next year.
ZAKARIA: David Miliband, looking at the world geopolitically, what do you see?
DAVID MILIBAND, PRESIDENT AND CEO OF THE INTERNATIONAL RESCUE COMMITTEE: Well, I think that in 2018 we saw what it means for the global ship of state to have no anchor. And the great danger for 2019 is that we have an age of impunity. In 2018 we saw the murder of Khashoggi, but also the immiseration of the people in Yemen. We saw hospitals run by the International Rescue Committee in Syria again bombed by Russian as well Assad forces.
And the idea that we're living in a world where the -- not just the institutions but the norms and values of the post-war period are no longer upheld is a very dangerous prospect. When you add it to the economic picture that Rana has produced what you see is economics and politics pulling in opposite directions and in potentially very dangerous directions.
ZAKARIA: David, how much of that was inevitable with the rise of China, with the resurgence of Russia? In other words, these norms were Western norms, they were American norms. Is this inevitably the world we are entering?
MILIBAND: No, I don't think so. A man who has -- I can't remember talked about the post-American world. Who was that?
(LAUGHTER)
MILIBAND: A man, a famous book of --
FAROOHAR: A brilliant man.
MILIBAND: A brilliant man. Ten years ago. But the post-American world doesn't need to be the Wild West. Because talk about China, the first country you mentioned. They have had enormous benefit from the global multilateral system but they are also investors in the global multilateral system. And I would argue that we are seeing in global politics the old adage that nature abhors a vacuum. And when you create a vacuum all sorts of actors can move in and it's easier for maligned actors to move in than for benign actors.
And the great danger, let's be honest, the pivot to Asia that President Obama announced 10 years ago, it was based on a reality of shifting economic power. The great danger is that the Chinese leadership calculate that far from investigating in the global multilateral system they are better off either building their own or just opting out of it. And that is the political challenge.
The Russians is obviously a different case. They are exploiting weakness and there is no sanction. And when there is no sanction that's how you end up with the bombing of hospitals or the killing of journalists. An age of impunity is one in which global rules are not enforced.
ZAKARIA: Ian Bremmer, for the last two years, what we have watched is a rising populist tide almost everywhere. But there are many people who think, well, you know, this is also going to run its course, these guys have no answers.
What do you see when you look around the globe at populism?
IAN BREMMER, FOUNDER AND PRESIDENT, EURASIA GROUP: Well, there are two thing aren't running their course. One, as David just said, there were eyes of China with a different set of norms and values and new architecture that competes with the U.S. And second, that the developed economy, that the democracies actually don't have the leaders, those leaders don't have the legitimacy.
[10:10:06] The institutions themselves are eroding. That's what the populism is all about. And for those that had hoped that people like Macron in France represented a shift in tide in populist support. His approval ratings are 23 percent right now. You know, I mean, let's face it. That's not where Trump is today.
Merkel, Angela Merkel isn't going anywhere any time soon but she's had to abdicate the chairmanship of her party. And so she's already essentially a much weaker leader in 2019 than she was in 2018.
If you look around the world, even Canada, where Doug Ford is the premier today, I mean, it's a softer form of populism in the United States but that's the-second most powerful position in the country. Trudeau himself is weaker. It's only Japan that's the exception. And they are an exemption because they haven't had the immigration. It's very homogenous. Their population is shrinking. So per capita even though the economy is not growing they're feeling a little better. And the military is constitutionally not allowed to actually participate in wars around the world.
Add to that the lowest adult social media participation rate in all of these countries and suddenly you say this isn't a model that we could even try to adapt to in the United States. Well, 2019 is going to see a lot more populism unfortunately for those that hope that the center is going to hold than 2018 experienced.
ZAKARIA: And David, when they look around the world at the United States, I mean you've had to do this when you were Foreign minister of Britain. What do they -- you know, if you were advising a foreign government on how to deal with Donald Trump, what would you say?
MILIBAND: Well, you'd say three things, obviously. One, this is an unpredictable super power. We've never had experience with an unpredictable super power. It's precisely been predictability that has given it power in the past. Secondly, transactions matter far more than values. It's absolutely evident that the administration has no preference for dealing with liberal democratic nations over autocratic nations.
Thirdly, and I think what's interesting is that in the end President Trump wants the deal. And he often advertises that he wants the deal more than anything else. We'll see this tested in the shutdown which obviously in some way a domestic question. But if you think about the Chinese trade, quote-unquote, war, you think about the North Korea example, in the end he doesn't want to go over the edge. And I think people are figuring that out.
ZAKARIA: All right. When we come back President Trump said this morning as he departed for Camp David that if anybody else but him were president we would be at war with North Korea. Not quite sure why. But so will Trump get a deal with Kim in 2019. I'll ask the panel. And of course I will ask David Miliband about Brexit when we come back. (COMMERCIAL BREAK)
[10:16:15] ZAKARIA: And we are back with David Miliband, Rana Faroohar and Ian Bremmer.
Ian, just to pick up on the point that David Miliband was making, does Trump want a deal on North Korea? It seemed as though he sort of raised the temperature, took us to the brink of war in the hope I think that the North Koreans would cry uncle and make a deal. When they didn't he first sort of lost interest and now even, you know, they seem to be going through unending negotiations that are going nowhere.
BREMMER: There is going to be another summit. Trump is very happy about being the one leader that can say, I am the guy that's gotten through to the North Korean leadership. He has a couple of small wins that he can point to like the fact the North Koreans continue to not test nuclear weapons or missiles which they were doing before of course.
But when you talk to, say, like, Mike Pompeo, secretary of State, privately on this issue, he'll say he met with Kim Jong-un four times, he's gotten absolutely nothing from the North Korean leader, and that the North Korean leader, who's a smart guy in his view, is planning to play out the clock on one full Trump term.
And if Trump as president decides that he wants to show that that's a deal even though the North Koreans aren't moving, though they're moving a lot with the South Koreans and the Chinese in building their economy, then that's where we are. And you're right, there is not going to be a war.
ZAKARIA: Let me ask you about one which I think at least on the substance I am somewhat sympathetic to Trump even though the manner in which he did it was -- I think he gets failing grades for. The question of Syria. What exactly was the U.S. doing in Syria? We weren't winning. The Assad was comfortably in power and consolidated.
Is he right to say, look, if you're not -- if it's not clear what exactly you're doing there, just staying in there unendingly doesn't makes sense?
BREMMER: He's certainly right to say that the fight is against ISIS and that's what Congress approved was a fight on terror. The idea that we're there to defend the Kurds that's not a legal military intervention. And that's not what the American people ever signed up for.
Now I do think that having 2,000 Special Forces on the ground in Syria, it's not like we're sending enlisted men and women.
ZAKARIA: Right.
BREMMER: These are people that are signed up for that kind of action. They actually are kind of into it and they are providing a lot of intel in what's happening on the ground, Hezbollah, other militants, for the United States and our allies. We will lose that when we pull these troops out. But I am sympathetic to the idea that Trump pulled the wool off, and hey, Assad won. And Assad won this war not because of Trump. Assad won this war because at no point did the Americans have anywhere close to the interest on the ground that the Iranians, the Turks and the Russians have had.
ZAKARIA: David Miliband, you --
(CROSSTALK)
MILIBAND: There are 230 International Rescue Committee staff on the ground in northeast Syria, another 200 or 300 in Idlib which is a province of three million people. Three and a half million now. The U.S. presence on the ground was undoubtedly upholding an uneasy balance of power. And it's a four, five, six-way balance of power. But the fight against ISIS is not over in northeast Syria.
We shouldn't believe that. And the danger, obviously, is either that you have conflagration in the northeast or that there is some kind of deal where the northeast is given over to the Assad forces. But then in Idlib, where you have this 3.5 million people and there are ISIS presence as well as the vast predominance of civilians, that you have some kind of trade-off that allows for a fight there. And that creates the danger refugee crisis going into Turkey or worse.
So I think that this was a decision that does bring greater instability at a time when there were two parts of the country that still have the hope of being places of relative calm, relative stability, and even in the case of the northeast a place that the refugees would go back to.
FAROOHAR: If I can add in one point to this, too. You know, Trump has obviously added a tremendous amount of this instability but this is not -- the idea of the U.S. pulling back from the Middle East is not just a Trump phenomenon.
[10:20:03] If you look at it economically the U.S. was the number one global producer of crude oil this year because of the shale revolution. That's galvanizing a lot of people on the right and on the left to say hey, maybe we shouldn't be as dependent on the Middle East and I think that's going to create a certain amount of isolation, even goes beyond the Trump administration.
ZAKARIA: Right. And of course the problem is that then the local actors become more and more prominent there.
FAROOHAR: Indeed.
ZAKARIA: And they are not particularly wise or strategic.
Rana, speaking of instability --
(LAUGHTER)
ZAKARIA: One of the five largest economies in the world, I think, Britain, is on the precipice of Brexit. What do you think that means? FAROOHAR: It's a real disaster for the UK. And it's something,
frankly that the leadership on both sides, on both sides of the political spectrum has yet to kind of fully grapple with. I mean, I think that there is a lot of willful blindness still amongst the British elite about the idea that there can be a good deal. I mean, in some ways nobody likes the current deal. That may be postponed as David is suggesting.
I think the possibility idea of a crash out is a possibility. It's a real possibility, whether that happens in January. Whether it happens in July. Because you have to grapple with the fact that Europe cannot really give the UK a great deal. It simply cannot allow there to not be hardship associated with leaving.
ZAKARIA: David Miliband --
MILIBAND: There's a four-way game of chicken going between Mrs. May, with her inadequate deal, the Brexiteer ultras who are saying let's crash out. There is a further middle group that's saying let's have some kind of soft landing with a safe harbor in the Norway option. And there's a fourth group, include myself and this is not just as an observer but as a participant, who are saying look, the deal that was promised for Brexit in 2016 is not on our phone.
And just as you when buy a house you do a survey and you're not bound to buy the house until the results of the survey come through, so when you decide that you're going to leave the European Union, the people should be given the chance to affirm their support for the deal or not to go ahead. But it is a game of chicken and the great danger --
ZAKARIA: If there is a second referendum, which is what you're advocating, would you go to Britain and campaign?
MILIBAND: Well, I would certainly seek to campaign more effectively than I did last time.
(LAUGHTER)
MILIBAND: And there are too many of it where I did some campaigning but not enough. And I think it would be a moment of national mobilization. But here's another point. It would be the moment when the populist would have to be taken on because remember, the Brexit referendum happened before President Trump was elected. It would be the moment to confront the delusions, the illusions, the blind --
FAROOHAR: Yes.
MILIBAND: The blindfulness that you --
FAROOHAR: Willful blindness.
MILIBAND: The willful blindness that you rightly referred to about how a medium sized country can have influence and security in the modern world versus the delusions that say we can throw ourselves at the mercy of international markets. The truth is there are tree regulatory regimes in the modern world.
There's a Chinese one, there's an American one, and there's a European one. And if you're Britain you have to choose between those three, and that's why I think the stakes are so high.
FAROOHAR: The tripolar world.
ZAKARIA: All right. We are going to hope that we will launch David Miliband into a British political campaign which would then lead who knows where. Many people hope to the prime ministership.
Next on GPS, China was at the top of the news for at least two reasons this week. Its moon landing and its hand in making Apple miss its targets. What is going on there?
I will ask the man who Donald Trump calls the leading authority on China.
(COMMERCIAL BREAK)
[10:26:31] ZAKARIA: Jade Rabbit Two. That is the name of the Chinese lunar rover that landed on the far side of the moon this week. The landing was seen as a big step for China's space program, with the NASA chief calling it a first for humanity and an impressive accomplishment.
And as it was having its triumph in outer space China was bringing Apple's stock back down to earth. The tech company took a huge dive between Wednesday's close and Thursday's open after Apple said it would miss its revenue forecast in a big way, all because of weak sales in China.
So how to think about China and its relationship to the United States?
Joining me now is Michael Pillsbury. He is the Hudson Institute's director for Chinese Strategy. President Trump has called him the leading authority on China as I keep saying.
Michael, pleasure to have you on. I have to say I also really enjoyed your book. It's called "A Hundred Year Marathon," and I very much advocate people read it because it's a very thoughtful book about what China might -- you know, what Chinese intentions are in this longer term.
MICHAEL PILLSBURY, DIRECTOR FOR CHINESE STRATEGY, HUDSON INSTITUTE: Yes, thank you.
ZAKARIA: So let's start --
PILLSBURY: It exists in Chinese translation but they classified it in China so only party members and military officers can buy it.
ZAKARIA: But they can buy it.
PILLSBURY: Yes.
(LAUGHTER)
ZAKARIA: So they want -- they want party members to know what China's plan is?
PILLSBURY: Well, yes, because it's sort of an inner history of U.S.- China relations over the last 40 years and I revealed quite a bit from declassified American documents about the level of our quite intimate cooperation with China.
ZAKARIA: Right. So let me first just ask about the space program.
PILLSBURY: Sure.
ZAKARIA: Do you agree that that's significant? What is the nature of China's space program?
PILLSBURY: Well, China's space program in many ways is a micro example of their overall strategy. They borrowed heavily from the Soviet to Russian technology. Many of their components look just like a Soyuz. They are not supposed to cooperate with NASA. It's against American law. A lot of human rights issues were brought up so the Chinese can't be part of our International Space Station.
So they did acquire American space technology. And that doesn't take away credit from them for some innovation. The exquisite control system to be able to maneuver a landing on the far side of the moon, it's extremely impressive. So three components, borrow from the Russians, steal from us, and have your own scientists, many of whom have American PhDs.
ZAKARIA: What I'm struck by, though, is, unlike the U.S. program, it is an entirely military program.
PILLSBURY: That's right. And they are proud of it. They've actually told us that their NASA consists of a sign board and a set of offices whereas their space infrastructure is all military. And they've actually joked with Americans, including myself, why do you have two separate programs in America, the Air Force and the military, and then a separate NASA?
And our concept goes back to President Kennedy that the exploration of space should be peaceful and done by civilians, and mainly for scientific reasons. The Chinese say yes, but your first astronauts come from the Marine Corps, John Glenn, and they sort of have us on that. Yes, we did borrow.
(LAUGHTER)
ZAKARIA: So let me ask you, you know, the big picture.
PILLSBURY: Sure.
ZAKARIA: You point out, your book talks about this 40-year history -- it's longer but when the United States was trying to integrate China into the --
PILLSBURY: Yes.
ZAKARIA: Into the American or the global system or the Western system, what do you think China is trying to do? What are China's intentions?
PILLSBURY: Well, they have outsmarted us is how I would summarize my book, over and over again. They are much more knowledgeable about American politics, American technology, American science than we are knowledgeable about them. Part of their approach has been to get what they can through the front door for free. A whole series of National Science Foundation agreements that required us to, within 30 days, transfer all new American scientific discoveries to China -- a government agreement, began with Jimmy Carter, never changed until fairly recently by President Trump.
PILLSBURY: That's part of it. Part of it also has been to not be ashamed to have a predatory economy, to not be ashamed of getting $3 trillion in foreign reserves, to behave as though the 17th century, you know, is still fashionable and a country should build up its economic power and frankly rip off its neighbors and its biggest trading partner, us.
ZAKARIA: And yet, as the second largest economy in the world, they have a very small military budget, comparatively speaking.
PILLSBURY: Yes.
ZAKARIA: Is that because they think asymmetrically and they're doing things in space, in cyber...
PILLSBURY: Yes.
(LAUGHTER)
Yes, they even have a term for it called "Shashoujian." Shashoujian means "assassin's mace" -- hard to translate, but it's a secret weapon like James Bond opening up the briefcase when the KGB guy is about to murder him. Assassin's mace concepts are very cheap. So the anti-ship cruise missile, the short-range missile that can go out and kill an aircraft carrier within 1,000 miles. These are cheap. These are a few million dollars per missile, compared to $5 billion to $10 billion for the aircraft carrier.
That's helped them with their grand strategy of keeping economic spending in the forefront, science and technology the most important, and then military spending last, a relatively low percentage of the GDP. Probably 1.5 percent, I'd say, of their GDP, compared to 5 percent of our GDP, goes for military spending. That makes a huge difference over 40 years.
ZAKARIA: And that -- the spending they do on the economics has helped enormously, because it's science, technology, infrastructure.
PILLSBURY: Yes.
ZAKARIA: I mean... PILLSBURY: Their military strongly support this strategy. In my book I talk a lot about the hundred-year marathon, as perceived by the military, the hawks in China. They're quite enthusiastic because they want to get weapons that will work 10 or 20 years from now, not by old-fashioned tasks and artillery...
ZAKARIA: So I've got to ask you about...
(LAUGHTER)
ZAKARIA: ... your number one fan...
PILLSBURY: Yes, sir.
ZAKARIA: ... Donald Trump.
PILLSBURY: I'm a fan of his, too...
(LAUGHTER)
... on China.
ZAKARIA: So there are people -- there are people -- there is a debate, I think, within the administration.
PILLSBURY: Yes.
ZAKARIA: And I have heard this, between people who say, "Let's just get -- let's scare the bejesus out of them and get a good deal..."
(LAUGHTER)
PILLSBURY: Yes.
ZAKARIA: ... and then go back to normal. And then there are people who say, "No, we need a fundamentally different strategy; we have to decouple our economy from China."
PILLSBURY: Yes.
ZAKARIA: "We're too interdependent. This has to be a kind of new Cold War."
Where do you think the president is?
PILLSBURY: The president has made his views clear long ago. He wrote a book in the year 2000. It's, kind of, a famous book because at the end he says, "If I run for president, I'll pick Oprah Winfrey as my running mate."
But in that same book, he has a long chapter on China -- they're the greatest challenge; they're smarter than we are; they're better negotiators." So he's thought about China at least 18 years, if not longer. His view is closer to the Lighthizer-Navarro view, "Yes, we should get a deal, but it should be enforceable, verifiable; lets not get tricked again." The Chinese know all this. They know about the two factions. It's in their newspapers almost every day. They copy The Wall Street Journal reporting on it. The Chinese view is, "Let's make a low-ball offer that will please Steve Mnuchin and Larry Kudlow and exacerbate the split between these two groups, see what happens."
Because Lighthizer and Navarro and others, probably myself, we would not like an agreement that's like the old SALT agreements that, you know, there was no verify; it's just trust.
ZAKARIA: Do you think Trump will be -- will be tough?
PILLSBURY: If his books are any guide, from the last 18 years, he'll be tough. He's closer to Lighthizer and Navarro than he is to Steve Mnuchin.
ZAKARIA: Michael Pillsbury, a real pleasure to have you on. I hope we can have you on again.
PILLSBURY: Thank you, Fareed.
ZAKARIA: Next on "GPS," tiny Bhutan may not have a high GDP, but it doesn't really care. What the kingdom strives for is a high GNH, or "gross national happiness." Which matters more, GDP or GNH, or any other acronym, for measuring a country's success? I'll tell you, when we come back.
(COMMERCIAL BREAK)
ZAKARIA: Now for our "What in the World" segment. We start the year with a big question. Does being richer make you happier?
The answer, for individuals and countries, seems to be the same: no. The World Happiness Report asks people across 156 countries to rate their level of life satisfaction. The United States, for example, has the largest economy in the world, but since 2015 it has been only the 18th happiest country, beaten by essentially all of northern Europe, but also by Australia, New Zealand, and even Costa Rica.
So money can't buy you love or happiness. This actually highlights a problem with public policy. Governments do everything they can to maximize GDP, gross domestic product. But taken alone, GDP is a deeply flawed metric. It counts everything that is produced in a country and bought there, no matter what. It counts all government spending as additive no matter on what the money is spent.
In his book "The Growth Delusion," the journalist David Pilling writes, "The GDP often includes some things many people would consider negative."
In Colombia, when Pablo Escobar's cartel reigned supreme, cocaine accounted for 6.3 percent of its GDP. If the U.S. builds new prisons in response to crime, that's a positive for GDP. Mafia money actually gooses the GDP of Italy. So policy wonks are looking for a better way to measure a nation's success or failure. Take the OECD's Better Life index, which measures 11 indicators,
including health, education and work-life balance across countries. The economists Joseph stiglitz wrote in a recent op-ed that such an index could have a huge impact on redirecting public policy to outcomes that improve well-being and happiness, not just economic output.
For example, had American policymakers been paying attention 20 years ago to the rising mortality of middle-aged, white working-class Americans, which was caused in part by the opioid epidemic, they might have acted on it sooner. That might not help GDP, but it would help human well-being.
There's also the Genuine Progress Indicator, a version of which is used in a number of U.S. states, as well as Japan and Finland. It includes GDP, but incorporates housework, volunteer work and natural assets like wetlands. Then it subtracts for a number of indicators like pollution, crime and underemployment.
This chart maps GDP and the Genuine Progress Indicator for 17 countries, showing that sometime around 1980, well-being ceased to rise with economic growth.
There's one country that has allowed well-being to shape policy for years, a tiny country, Bhutan. Its Gross National Happiness index has 33 indicators, stressing things like cultural and environmental preservation, values that are enshrined in its constitution.
So what index should we use? Well, possibly none. According to the epidemiologists Kate Pickett and Richard Wilkinson, there is one simple proxy for well-being in rich countries that most governments already measure, inequality. In their forthcoming book, "The Inner Level," they detail the toll inequality takes on well-being.
Take a look at this chart measuring inequality in a sampling of rich countries against rates of mental illness. The authors argue that this isn't a coincidence or a correlation. Inequality stresses societies and reduces well-being.
Don't forget, GDP is not some kind of God-given statistic. It's a recent idea, born in the 1930s, when national economies were largely industrial, trade was limited, and even in the West, millions were desperately poor. A new world, a new era, might need a new measure.
Next on "GPS," it took months and months of investigation, deliberation and consideration before President Obama made the ultimate decision to go ahead with the bin Laden raid. The best- selling author Steven Johnson will tell you what everybody, including our leaders, can learn from that decision-making process.
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ZAKARIA: President Obama's decision to send Seal Team Six into a compound in Abbottabad, Pakistan, surely wasn't easy. What if the target, Osama bin Laden, wasn't there? What if there were casualties among the special ops soldiers? What if one of the helicopters went down, as, of course, ended up happening? What if Pakistan retaliated in some way for America's violation of its sovereignty?
But the big decision to do it and all of the smaller decisions on how to execute it were made meticulously. Can we make this model and use it to make decisions in our own lives?
My next guess, Steven Johnson, does just that, in his newest book, "Farsighted: How We Make the Decisions That Matter the Most."
So you argue that, basically, we're making decisions all the time, but we don't think about it systematically, and as a result we're probably doing it badly?
JOHNSON: Yeah, the question is, when you -- when you come to an important decision in your life -- like there -- there are everyday decisions that we make, minute by minute, that aren't that important, that don't require this level of process. But when we hit those moments where we're trying to decide whether to take a new job or launch a new product or move from the city to the country, whatever it is, those are the kinds of decisions that I argue that we need to have a process in making the choice.
And in the case the bin Laden raid, we tend to celebrate the results of great decisions, right? We celebrate the heroism and the bravery and, you know, the daring of the raid itself. But, actually, what made that particular success story a true success was this nine-month process of deliberating.
First, is this person really Osama bin Laden? And, second, what should we do about it if we determine that it is bin Laden?
And as a society, I think we don't celebrate that decision process, because it's slower and more contemplative. And that's what farsighted is trying to talk about.
ZAKARIA: You contrast the bin Laden raid with the Iran hostage rescue, which goes badly awry. And you point out, it's not just an accident, that the Iran rescue was very poorly designed in terms of the decision-making?
JOHNSON: You know, when they were actually deciding on the bin Laden raid, they had a number of different, kind of, past decisions that had gone awry. There was the Iran hostage situation decision. There was the weapons of mass destruction during the Iraq war -- all the way back to Bay of Pigs.
And they looked at the kinds of processes that, you know, that went wrong in those situations, the confirmation bias and overconfidence. And they really tried to challenge their assumptions at every step of the process. And that's the kind of thing that I think we can apply in our own lives, right? We tend to go with our gut; we tend to go with our first impression of the situation. And we actually need to take time, imagine alternate scenarios, challenge our assumptions. That's the kind of exercise that I write about in the book.
ZAKARIA: And you talk about how it's important to imagine what things will look like two years, three years, four years out, not just tomorrow?
JOHNSON: So, in some sense, a big life decision or a big corporate decision is, on some level, a prediction about the future, right? And so one of the things that I did in the book is I went back and looked at people and the science of prediction, like how -- where have we gotten better at making predictions, right? What can we learn from the studies of people who are good forecasters?
And one of the things that we have learned -- this is from a famous set of studies from guy named Philip Tetlock -- it that people who are good predictors of the future have a diverse set of interests, right? They don't just have a single unified theory of the world, right? They're interested in lots of different things. And those are the people, when they are trying to forecast events in a complex system, those are the people who end up being smarter and more farsighted, basically, in the judgments they make.
ZAKARIA: There are some people who do approach their decision-making in exactly the kind of analytic way you want them to -- Charles Darwin. When he was deciding how to get married, what did he do?
JOHNSON: So this was actually the seed of this book for me. Years ago I was writing about Darwin's notebooks, during the 1830s, when he was coming up with the theory of evolution. And there's a very funny -- in the middle of all of his scientific jottings to himself, all of us his fascinating, kind of, intellectual explorations of evolution, he takes over two pages in the notebooks and he creates a pros and cons list for getting married.
And it's a -- the list is, kind of, dated, a little bit. I mean, I reproduced it in the book. One of his things he's concerned about, if he gets married, is that he will give up the clever conversation of men in clubs...
(LAUGHTER)
... like, that's one of his concerns. But what struck me about it is the pros and cons list is the one technique that, you know, most of us learn from making complex decisions. And so here Darwin was doing it 170, 180 years ago. Surely the techniques have advanced. Surely, there are more tools than just making a pros and cons list that we can use on -- use in making a decision like that.
ZAKARIA: So all the things you say go into making good decisions, listen to the strongest case against your idea; imagine alternative scenarios that are not your preconceived notions; take in outside information; take in information that may contradict what you are looking at; run out what this will look like going forward -- it seems to me what we, at least in the United States, when we make political decisions as citizens, we do everything wrong. We listen only to the -- to one side of the story. We have reinforced our biases. We never look at the alternative.
Is it fair to say that American civic decision-making is particularly broken? JOHNSON: I -- this book does feel like a book that is useful to read
right now at this particular moment in time. I think we don't have enough deliberative decision-making, in terms of the electorate and in terms of some of our leaders right now.
But, you know, a key point, actually, that is a theme that runs throughout all of "Farsighted" is the importance of diversity in making decisions. This is one of the great findings of the social sciences over the last 20 years, that diverse groups make better decisions, make more original decisions collectively. And that diversity can be measured in terms of age and ethnicity, gender, but also intellectual diversity, people coming from different perspectives, different fields of expertise.
And I think that's one of the reasons why we try to celebrate diversity in terms of social tolerance, in terms of equality of opportunity, but we should also remind ourselves that, when we have diverse leaders, for instance, when Congress gets more diverse, as it is happening right now, we can expect that group to actually make better decisions. That group will be collectively smarter.
ZAKARIA: As long as it functions as a group, not as two warring factions.
JOHNSON: Right, right, so figuring out a way to communicate and share ideas and collaborate with people who have different perspectives -- that's -- that's clearly going to be crucial.
ZAKARIA: Well, Steven, obviously a good decision to have you on the show.
(LAUGHTER)
JOHNSON: Thank you so much.
ZAKARIA: Thank you.
Next on "GPS," we want you to take everything you just learned from Steven Johnson and make some of your own decisions and predictions about what will happen in 2019. Will you predict the major events of the year correctly? Well, stay here to find out how you can tell us your global prognostications.
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ZAKARIA: So how good are you at predicting what will happen in the world?
You might remember that, this year, we've been partnering with Good Judgment Open, a crowd-sourcing platform that asks everyday people to predict the future. Some 6,400 of you went online to participate in our Global Judgment Challenge in 2018, making more than 35,000 forecasts.
Here's what you predicted. In November, America held its midterm elections. We asked whether the Democrats would win control of the House but not the Senate, and while you said the likelihood was about 20% in the beginning of the year, the numbers rose steadily throughout the year until Election Day, when GPS prognosticators saw a 61% chance of a Democratic-led House of Representatives.
Not all the predictions were that accurate. After the school shooting in Parkland, Florida, forecasters were asked if the federal government would ban bump stocks within the year. Confidence rose quickly to a high of 85 percent, but then dropped as the issue fell from the headlines.
On average, forecasters became increasingly skeptical the Trump administration could enact a bump stock ban by year's end. On December 17, people gave it a 7 percent chance. Then, on December 18, the administration announced the ban.
Another question also highlights how forecasters use the news. Would Mueller cease to be special counsel, whether by ending the investigation or being removed from the position? Odds never went above 50 percent, but what happened right before these spikes? Here, Giuliani announced that Trump reimbursed Michael Cohen for payments to Stormy Daniels, and here the Justice Department inspector general released a lengthy report critical of the FBI's investigation into Hillary Clinton's e-mails.
And this one? Attorney General Jeff Sessions resigned.
Though it felt like a volatile year, the forecasters provide a relative stable view of some geopolitical hot spots. While the war in Syria raged on, forecasters were confident that Bashar al-Assad would remain president, giving him on average a nearly 95 percent chance throughout the year.
Such consistent forecast opinions doesn't mean it's time to throw caution to the wind. Take for instance the contested South and East China Seas. The wisdom of the crowd held that a lethal confrontation there was unlikely, with a stable probability of between 5 percent to 15 percent over the course of the year. Accurate? Yes, but very nearly not. Remember that in October, a Chinese ship came within 45 yards of the U.S. guided missile destroyer, the USS Decatur.
Do you want to try your hand at predicting the future for the coming year? Go to gjopen.com/fareed. What do you think the next year will hold? With a Democratic majority in the House, will President Trump be impeached? As Facebook struggles with privacy concerns and foreign meddling, will Mark Zuckerberg remain the company's CEO? Will the U.K. hold a new Brexit referendum? Will the U.S. be plunged into a recession this year?
Again, that's gjopen.com/fareed. And as always, tune in to "GPS" as we stay up to date on these questions and more. Thanks to all of you for being part of my program this week. I will see you next week.
