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Fareed Zakaria GPS

Snowden and Big Data; Donilon's Exit Interview; Interview with Andrew Sullivan

Aired June 30, 2013 - 10:00   ET


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 start the show with an exclusive with Tom Donilon, President Obama's national security advisor. Today is his last day in office. He sat down with me for an exit interview.

We talk about Edward Snowden, the NSA, Russia, China, Syria, Iran and reflections on his tenure at the president's side.

Then, 24 years ago, Andrew Sullivan laid out the first major intellectual argument for same-sex marriage. The idea was controversial at that time. Today, it seems inevitable. We'll talk to him about this fascinating journey.

And the Rhodes Scholarship of the 21st century, that's what one of America's wealthiest men says he has just started at Yale, Harvard, Princeton, Stanford, nope. Stay tuned to find out where.

Then, Africa, not one but two American presidents visited there this week, Chinese President Xi hit it on his first trip abroad. I will give you my views on the hottest continent.

But, first, here's my take. "One who breaks an unjust law must do so openly, lovingly and with a willingness to accept the penalty." That was Martin Luther King Jr.'s definition of civil disobedience. It does not appear to be Edward Snowden's.

He has tried by every method possible to escape any judgment or punishment for his actions. Snowden's been compared to Daniel Ellsberg, the man who leaked the Pentagon Papers to the New York Times.

But Ellsberg did not hop on a plane to Hong Kong or Moscow once he had unloaded his cache of documents. He stood trial and faced the possibility of more than 100 years in prison before the court dismissed the case against him because of the prosecution's mistakes and abuses of justice.

Mahatma Gandhi and Jawaharlal Nehru spent years in prison in India for defying colonial British colonial rule in their native land. So, while Snowden is no hero, his revelations have focused attention on a brave new world of total information.

We are living with the consequences of two powerful, interrelated trends these days. The first is digital life. Your life today has a digital signature. Where you eat, shop and travel; whom you call, e- mail and text; every website, cafe and museum you have ever visited is all stored in the great digital cloud. And you can't delete anything, ever.

The second is Big Data. Americans were probably most shocked by the revelation that the U.S. government is collecting massive quantities of their digital signatures, billions of phone calls and e- mails and Internet searches. The feds aren't monitoring every last one, but they could easily and that is the essence of the age of Big Data.

In their excellent book, "Big Data", Viktor Mayer-Schoenberger and Kenneth Cukier write about the police in Richmond, Virginia. They track criminal incidents against a variety of events: corporate paydays, sports events, concerts, gun shows and dozens of other possible triggers.

The computer, then, identifies patterns. For example, two weeks after a gun show there is always a jump in violent crime. Now, multiply this example by thousands and you understand what the NSA computers are doing.

They don't use samples anymore, but rather the entire data set. And they don't try to construct algorithms or logic trees to predict an event they just look through the data for correlations.

As Mayer-Schoenberger and Cukier point out, if the computers can make predictions based on data analysis, should we prevent bad actions by arresting people before they act? Remember the movie "Minority Report?"

But it's not just fiction. The NSA program Prism aims to identify suspicious patterns to allow the government to prevent terrorism, that is to act before an attack takes place.

A research project at the Department of Homeland Security that tried to predict terrorist behavior based on people's vital signs, physiological patterns, was 70 percent accurate, according to the authors.

As far as we know, the U.S. government has broken no laws with all of this surveillance. It has followed all established procedures. Congress approved this program, though it did so in secret, writing laws that aren't public.

Shouldn't we know more about the actual checks and balances for this kind of surveillance?

The larger question Big Data raises though is this, should any government be permitted to use computer analysis, even if highly accurate, to observe, inform, quarantine or even arrest people simply because they are likely to do something bad?

That seems like a scenario from a horrifying sci-fi thriller. Yet here we are, very close to a real-world version. For more on this go to for a link to my column in Time Magazine and let's get started.

President Obama's first meeting every morning is with Tom Donilon, the National Security Advisor. Donilon briefs President Obama on his portfolio which the president has said is, "literally the entire world."

Henry Kissinger said on this program that he believed Tom Donilon had fulfilled his role superbly. Today is Donilon's last day on the job. On Friday, he sat down with me for an exit interview.


FAREED ZAKARIA, CNN HOST: Tom Donilon, pleasure to have you on.

TOM DONILON, NATIONAL SECURITY ADVISOR: Yes. Thank you, Fareed, good to see you.

ZAKARIA: I got to ask you first the news of the moment.


ZAKARIA: Do you have assurances from the Russian government that Edward Snowden is not going to be allowed to say in Russia and that he will have to go somewhere else?

DONILON: I'll say a few things about that. Number one, the view of the United States -- the position of the United States that we've been pursuing is that Snowden should be returned to the United States.

He is not -- he has a revoked passport. He's not traveling on valid papers and he should be returned to the United States because he's wanted here for a crime.

We've been in discussions, through law enforcement channels, with the Russian government on a regular basis about this issue and I have to agree with President Putin which -- when he said the other day that it would be better for Mr. Snowden to decide when he's leaving, sooner rather than later.

We agree with that, but the sooner this can be resolved, the better.

ZAKARIA: But you don't have a specific assurance that he will not be allowed to stay in Russia?

DONILON: Well, I mean he's currently been in the transit lounge, as you know, in the Russian airport and these discussions are taking place in law enforcement channels, which I think is the place for them to take place.

You know, as the president said yesterday, we have broad relations with Russia. We have a lot of issues to work through with Russia and other countries. And this is appropriately I think in the law enforcement channel. ZAKARIA: But isn't that signaling to the Russians or as it did perhaps to the Chinese that this is not an urgent priority?

The Washington Post had an article saying the administration gambled that it could do entirely -- use entirely legal channels to address this issue rather than putting diplomatic and political pressure on both the Hong Kong and Chinese authorities and the Russian authorities. And, in both cases, the article argues the strategy failed.

DONILON: Yes, well -- well, we've had a lot of conversations with the Russians about this through a variety of channels, but the principle channel, Fareed, really is the law enforcement channel.

We have had a history of law enforcement issues being resolved effectively, including cooperation on the Boston Marathon bombing with the Russians and that's the appropriate channel.

And, again, I think President Putin's point that this should be resolved sooner rather than later is correct.

ZAKARIA: So there will be no great consequences for the Chinese and the Russians if they don't cooperate?

DONILON: Well, let's see where this ends up. As the president said yesterday, this is a law enforcement issue.

This is -- we have broad relationships with both the countries that you mentioned, very complex set of relationships, a number of things that we have to work with these countries on.

And they shouldn't be dominated, frankly, by a single law enforcement issue involving, as he president said yesterday, a 29- year-old hacker.

ZAKARIA: We have an election in Iran with a seemingly moderate, reform-minded president. First, do you read it as such? And, secondly, is the United States going to take advantage of that opportunity and present Iran with some kind of negotiated package that it can live with?

DONILON: You know, the United States, from the offset has indicated that it would sit down with Iran and talk about the nuclear issue face-to-face and in a bona fide fashion.

The elections were interesting in Iran. They reflected, among other things, the state of the Iranian economy, which in turn, of course, reflected the effectiveness of the sanctions that the United States has led and the West has put on Iran.

And there were discussions about the West because the analysis is pretty straightforward. The economy and the situation in Iran is not going to get better unless Iran takes policy changes which would improve its relationship with the West.

The currency ... ZAKARIA: But now will the United States propose some kind of package that, you know, there has to -- presumably in any negotiation there has be something in it for the Iranians.

We know what we want them to not do. What do they get? What's the upside for them?

DONILON: There's a lot in this for the Iranian people and I think this is what the Iranians have to consider.

We have had numerous discussions with the Iranians through the P5-plus-1 process. There are any number of proposals that have been put on the table and they await an Iranian response.

But what will have to happen is two or three things; one, we'll have to see if Iran is willing to come to the table in a bona fide way and address the international community concerns about the nuclear program.

If they do that, we've indicated that we can have a discussion about Iran over time being integrated back into the international community.

If they don't come to the table and engage ...

ZAKARIA: But what does that mean? No specific promise of relaxation of sanctions?

DONILON: Well, I can't really -- I don't really want to negotiate through a television interview, but there are a number of things that Iran would have to do to satisfy the international community about its peaceful intention with respect to its nuclear program.

Absent that, the pressure will continue. But the choice now is with the administration in Tehran and the choice ultimately, of course, will be with the Supreme Leader who will have to decide whether we're at the point where his public can be -- he can be responsive to his public in terms of change here and to the change in policy which can allow us to move forward.


ZAKARIA: We will back in a moment, more with Tom Donilon on other hotspots of American foreign policy and some personal reflections.


ZAKARIA: And we are back. More now of my exit interview with the president's National Security Advisor Tom Donilon. This is his last day in office.


ZAKARIA: Let me ask you about Syria. The president has seemed to have had a disciplined attitude about whether or not to get involved in Syria and not commit the United States.

And, then, a couple of weeks ago, it seemed like that shifted and all of the sudden there was a determination that because there had been a use of some chemical weapons at one point on the battlefield, the United States was now suddenly much more deeply and actively engaged.

Is that the appropriate yardstick by which the United States should determine whether or not to commit itself?

DONILON: Well, we've had a consistent policy in Syria in terms of supporting the opposition. The president did say that the use of chemical weapons would cause us to take changes and it did in terms of the scale and scope of the assistance that we're providing to the opposition.

Stepping back on Syria, it's a tragedy. I've been to Syria many times. And for Assad basically to wreck that country, its heritage and impose the cost he has on its people is appalling.

And we have, from the outset, organized the international community to support the opposition. We have been the leader in humanitarian assistance, now $850 million with humanitarian assistance.

We have said from -- for a long time now that we would support the opposition and we are supporting the opposition. And we're trying to work with various parties towards trying to get them to the table to pursue a political solution.

We pressed the point that it is in everybody's interest to try to get a cessation to the violence and get a political process ...

ZAKARIA: But you have no -- had no luck with the Russians yet. That photograph of Putin and Obama at the G8 seemed to say it all.

DONILON: Well, I was at the meeting with President Putin and President Obama. They agreed, as you know, during the course of that meeting, of pursuing the Geneva 1 agenda, which is a conference that would lead towards a transitional government.

We have not been able to get that scheduled at this point and put together, but we continue to work with the Russians on that. But we do share the goal of putting that together.

President Putin did sign on to a G8 statement calling for an investigation of these chemical weapons by the United Nations and Syria.

But we have had a disagreement with the Russians over the tactics here. We've had a disagreement with the Russians over what is required to move toward a political settlement.

I think our analysis has been right, frankly. Our analysis from the outset has been that longer this goes on, the more difficult this is going to become. The longer this goes on, the more it would take on a sectarian character. That the longer this goes on, you'd find al-Qaeda-related entities like al-Nusra finding their ability to take root there.

ZAKARIA: There have been books written already about the Obama administration's foreign policy and some of them place you at the absolute center, give you an enormous amount of influence.

And, in fact, Vali Nasr's book says that he White House and you had too much influence and drowned out the voice of somebody like Hilary Clinton and Richard Holbrooke, who were taking very different perspectives on Afghanistan, particularly.

How do you respond to that?

DONILON: We have had, from the outset of the administration, a very strong group of foreign policy principles. And none of whom would be "drowned out."

We have, at the Principles Committee that I led here, you would have the Vice President of the United States Joe Biden, Secretary Clinton, General Petraeus, Leon Panetta, Bob Gates before him Richard Holbrooke when he was with us.

It's a very strong group of principles and, indeed, one of the things that I am quite happy with over the last four-and-a-half years is that we have not had the historical norm.

The historical norm is that you have a tremendous amount of public conflict among very high-profile and strong-willed national security of principles. We haven't had that in this administration, very little of that.

The reason I think is that President Obama has insisted that we run a process here where it's effective, views are heard and the president gets them directly.

So I just think that's wrong. I think we've run a process here that has been fair where the evidence is overwhelming that the principles (inaudible) was fair because we haven't had this kind of public bickering that you've had in the past.

And you and I could go through some of the famous cases over the last 35 years. And you've done it not with shrinking violets, but rather with some of the most prominent national security figures and political figures in the United States.

Indeed, you know, I would be at meetings on a number of occasions where there'd be three people at the table who ran against each other for president.

So I would ...

ZAKARIA: Clinton, Obama and ...

DONILON: Yes. So, I don't think Vali's got this right. ZAKARIA: You've been working at the White House -- this White House since President Obama was elected. What was your -- what was the last day that you had a full day of vacation?

DONILON: A full day off? Christmas 2008.

ZAKARIA: So, are you -- what are going to do right after this?

DONILON: What am I going to do after I finish my work? Well, I finish at -- I guess this will air on Sunday. So, I finish at midnight tonight and, then, we'll handover the reigns to Ambassador Rice and, then, I will head up to New England to the beach for a while.

ZAKARIA: You've for President Carter, you've worked for President Clinton, you've worked for President Obama. What do you think is the key -- you know, if somebody were to want to understand how President Obama approaches foreign policy, what would you say is the key difference or the characteristic of this president?

DONILON: Yes, I don't want to compare presidents. As you said, I worked closely with three presidents over the last 36 years or so and one of the keys to being able to do that is not to engage in comparisons and how (inaudible) among presidents in a public forum.

But I can say this about President Obama, he is strategic, very determined in terms of understanding fully the problems that the country faces. He is a very efficient and effective decision-maker.

He insists on a rigorous process, as I have said. He insists on seeing all the options fully developed. He insists on hearing from his advisors and has asked the same question over and over again, what's in the national interest.

And, very importantly, and this goes back to your question on Syria for example, asked not just what would seem to be a good idea today, but how does this play out two and three and four steps down the line. And I've seen this now, again, close up for four-and-a-half years.

ZAKARIA: Tom Donilon, thank you very much and thank you for the work you've done for the country.

DONILON: Thank you, Fareed, it's great to be here.


ZAKARIA: Up next, What in the World. A look at the fastest growing continent in the world, it is not Asia. We will be right back.


ZAKARIA: Now for our What in the World segment.

(AUDIO GAP) ZAKARIA: President to visit Africa. This week, two of them are there; President Obama, of course, but also his predecessor George W. Bush. The two visits are unrelated, but the focus is common, how to engage with the world's fastest growing continent.

Africa was, for many decades, the "Dark Continent" or the "Hopeless Continent," as The Economist put it. More recently, it has become the great hope of the business world. The Economist updated its take to "Africa Rising."

The World Bank recently said Africa could be on the verge of a take-off the like of China's 30 years ago. Africa's recent growth has been impressive and important, but let's step back and get some perspective before we break out the champagne.

First, the case for optimism, growth, as population's stagnate or even decline in Europe, Japan and China, Africa's population of 1 billion is expected to more than double by 2050. More people means more consumption, more production, more growth.

African economies grew, on average, around 6 percent last year. That's three times the pace of America's growth and faster than many Asian countries.

A new world is opening up to Africans as they get used to credit cards and mobile phones. They're also becoming economically more free and more democratic.

But there are hurdles ahead. The World Economic Forum's new Africa Competitive Report shows that of the 20 least competitive economies in the world, 14 are African.

What this means is that African economies are blighted by low productively. African economies may be growing for now and from a very low base, but they are over dependent on commodities.

More than half of the continent's total exports are minerals, a focus which makes it vulnerable to fluctuations in global demand. More than two-thirds of Africa's labor force is employed in agriculture, much of it subsistence agriculture.

On the other hand, manufacturing, the hallmark of a developed economy, has essentially remained stagnant. Its share of total GDP is the same as what it used to be in the 1970s.

The African Economic Outlook, published by the African Development Bank and others builds on some of these points. It turns out that if the world's rich countries experience a 1 percent drop in growth, that translates into a 10 percent drop for Africa's export earnings.

In most African countries, economic and political reforms have stalled, corruption remains staggeringly high and the private sector remains much too tied to government favors.

Look at Africa's biggest economy, as attention centers on the great Nelson Mandela's life and legacy, South Africa itself is languishing. Annual growth fell to less than 1 percent in the latest quarter. Youth unemployment hovers around 50 percent, a recipe for future crises.

What to make of all these facts and reports? South Africa's case is a warning for the rest of the continent. African countries have immense potential, but they need a continued commitment to bold reforms, transparency, free markets and trade.

Perhaps the most crucial thing to watch is how Africa deals with its greatest resource, not oil, not minerals, but people. Africa's share of the world's population will rise from one-seventh to about one-fifth by the middle of the century.

If Africans get the right access to education, health care, good governance and jobs, Africa will be a powerhouse. If not, the population growth is curse not a blessing.

This week's visits by Obama and Bush are important, but what African countries need is not so much external attention, but internal reform.

Up next, a big milestone for gay marriage in America. I'm going to speak to man who made the case for it more than two decades ago and he's a conservative. Right back.


CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington, getting you up to speed on a story we're following in Egypt. Massive demonstrations taking place today against and some for the country's president, Mohamed Morsi. We went to go to CNN's Reza Sayah. He is outside the Presidential Palace in Cairo. What's going on, Reza?

REZA SAYAH, CNN CORRESPONDENT: Candy, the drama and the anticipation is building as thousands of people make their way to the presidential palace. And we are anticipating mass protests against President Morsi on the anniversary of his presidency. These are the opposition factions, the liberals, the moderates who say the president and the Muslim Brotherhood have hijacked the revolution and pushed everyone aside. Across town, in Tahrir Square, more opposition factions protesting. In a short drive away from us, the supporters of the president are demonstrating. And the concern is in the coming hours if these two demonstrations cross paths, there's going to be violence. Candy?

CROWLEY: Reza, clearly there is some worry inside the presidential palace as we were told earlier, there will be a news conference we expect probably shortly, but it will not be from President Morsi himself. But we want to tell our viewers, it will be by the spokesman from President Morsi. Reza Sayah, Ben Wedeman, all of them in Cairo for us. We are following the story. We will stick with it and be back to you. Now, it's back to Fareed Zakaria "GPS." And coming up at the top of the hour, Howie Kurtz's last "Reliable Sources." ZAKARIA: The August 28, 1989, issue of "The New Republic" magazine had a controversial cover. It featured an artist's rendering of a wedding cake, but with the figures of two men on top. Inside was a ground-breaking essay by Andrew Sullivan, then seen as an ardent conservative laying out the case for same-sex marriage. It's a reminder of the ultimate importance of intellectual work, which often lays the foundation for things that later happen in the so-called real world. Given this week's historic Supreme Court rulings on the subject, I asked Sullivan to come on and talk to me about his essay and where we are today. Welcome, Andrew.


ZAKARIA: So, tell me about when you wrote that essay, because I remember it. We knew each other then. It was controversial, and it was controversial in the gay community.

SULLIVAN: Oh, yes.


SULLIVAN: Gay marriage was -- I spent the first ten years battling the gay left. I was picketed, attacked. I was called the anti-Christ for proposing this.

ZAKARIA: And why - why did they not like it? Explain.

SULLIVAN: Because the gay movement then was very much a product of the new left, of the late '60s and early '70s. That they believed that their goal was to uproot existing institutions and to dissolve marriage. And to go there and say, no, we have a right to marry, we should have a right to marry they thought was heterosexist, patriarchal, right wing, fascist, so we were for the first ten years just kicked, you know, continuously by the gays.

Until suddenly from the ground up, and I'm talking about the establishment, the ground up, the gay men who had been cut off from their husbands in hospital rooms in the AIDS epidemic, people who had suffered horrible indignities, people who had been with their spouses through (ph) the last of this minutes, thrown out of their house by eventual relatives immediately thereafter, denied access to the funeral, no rights, whatever. And lesbians started having babies. So this actually created a constituency on both from death and life to secure our relationships, to take care of our children, to take care of our spouses.

ZAKARIA: That's what my impression was, that you were fighting a kind of - you know, again, looking from the outside, there was a kind of activist community that was more left wing and viewed this more, you know, it's important to be bohemian, to have a kind of rejection of bourgeois life, but your argument seemed more in accord with what the majority of gays probably wanted ...


ZAKARIA: ... which is just a normal life. SULLIVAN: I was challenged by a lot of left wingists by saying we reject marriage. We don't want to have anything to do with this. My response was, with all due respect, you don't reject marriage, because you cannot. Because it's never been offered to you. I'm fighting for your right not to marry as well as to marry. But you're right ...

ZAKARIA: You don't have to get married.

SULLIVAN: You don't have to. I mean - straight people don't have to either. But look, we're part of families. Gay people don't -- they're not born under a gooseberry bush in San Francisco and then just unleashed on the country to improve your dinner party conversations and interior design. That's not what happened. They're born and bred in Texas, in Oklahoma, in Alabama, and they're in the military and they're part of this country's entire diversity. And they want to be a part of their own families. And they're more traditional than you realize.

ZAKARIA: So then began the battle you're still battling, which is with conservatives.

SULLIVAN: Yes. I think the great disappointment, the great disappointment is that this was a really in some ways a conservative argument. This was a minority group seeking responsibility, commitment, pooling resources. If you're a couple and something happens to one of you, you have someone else to take care of you, not the government. There's a really powerful conservative case for this. And so many of the Republican Party just never grappled with it until it was too late.

But in Kennedy, you know, Anthony Kennedy, Reagan appointee, I think you see the last strains of that moderate conservatism which is, you know, we do have this new - this new emergent population. How do we integrate them? How do we make them part? I don't want us to have a separate, but equal institution of civil unions, and that was the big threat. And then Bush, when he actually endorsed a federal marriage amendment, suddenly the entire gay establishment were like, OK, we're with you. It was like ...

ZAKARIA: If Bush is against it, we were for it.

SULLIVAN: Yes, Bush -- I would like to say that my arguments or whatever, Evan's (ph) brilliant strategy really persuaded the gay community. But no, I think George Bush by endorsing the most unbelievably draconian, to actually write us out of equality in the Constitution itself, unprecedented attack upon a minority, galvanized everybody around this issue.

ZAKARIA: Do you worry that there will be a right-wing backlash of the kind that Roe v. Wade produced for the next decade or two?

SULLIVAN: No. I think that backlash happened. We're sort of in a backlash lash at this point. And because this decision was not as sweeping as Roe versus Wade.


SULLIVAN: It still allows every state to make their own decisions. My worry is that there will be an overplaying of our hand, and that people will try and force this more quickly than we really should. What I'm proud of so far is that we have done this the right way. We have done this state by state. We've done it legislatively, we've done it through arguments, through that kind of -- what the founders wanted us to do. Make our case bit by bit, persuade more and more people and move that forward. And I don't want anybody's religious liberty, I want that to be defined as maximally as possible. We do not threaten and we should never threaten the conscientious beliefs of those who disagree with us, but we should welcome their freedom because it's our freedom too. And so I'm very concerned, actually, that we may become intolerant of people who believe homosexuality is still sinful. And we have to -- we have to live by ...

ZAKARIA: You want to be tolerant of their intolerance?

SULLIVAN: Yes. Because I think in the end that's the only way to solve it. I mean I'm a Christian. I really believe in the end on this matter. You up the ante and start calling them bigots and trying to coerce them, you're as bad as they were to us. And we must never do that.

ZAKARIA: Andrew Sullivan, pleasure to have you on, and congratulations.

SULLIVAN: Thanks, Fareed.

Up next, the Rhodes scholarship of the 21st century. My next guest says it will take students not to the U.K., but to China. He'll explain, Steve Schwarzman, the CEO of Blackstone, up next.


ZAKARIA: The very successful British businessman named Cecil Rhodes set up a scholarship to bring students from the British colonies, the United States and Germany to study at Oxford. The idea was to promote international understanding. 110 years later, a very successful American businessman named Stephen Schwarzman set up a scholarship to bring students from around the world to study in China. The idea is also to promote international understanding. Schwarzman is the chairman and CEO of the Blackstone Group, a private equity firm that has grown from having $400,000 of assets at its founding almost 30 years ago to over $200 billion of assets today.

Steve Schwarzman, good to have you on.


ZAKARIA: I've got to ask you about this big initiative that you have made in China, a program, which will bring students from all over the world, the kind of best and the brightest, to China in the way that the Rhodes scholarship brings people to Oxford. That's correct? SCHWARZMAN: That's correct. What we're trying to do is take 200 people from around the world, 45 percent Americans, 20 percent Chinese, and 35 percent from rest of world, top 20 economies basically, and have them come to Tsinghua University in Beijing. And the reason that we're doing this is because I'm concerned about what happens if China continues growing at double or triple the rate of the West. The West unbalances in producing jobs. China is producing 10 million jobs a year. And with the burdens on governments in the West, people are going to become more and more unhappy just generally. They're not so happy at the moment anyhow. If they see one country, which is now the second biggest economy in the world, China, growing rapidly, the tensions are going to go up because people seldom blame themselves for their own underperformance. It's always got to be somebody else that did it to them. And as China becomes a focus as the U.S.' largest creditor and there becomes hostility between China and the rest of the world, and if that occurs, not over a year or two, but over decades, you could have major trade problems, major economic problems, and potentially military problems.

ZAKARIA: How does this -- how does this solve that?

SCHWARZMAN: By the way, before we get to the solution, those problems are already occurring between China and Japan, between China and Europe on certain types of products. That the Schwarzman scholars is designed to create leaders, actually people who are already highly accomplished, like the Rhodes, and have them come to China, meet the leaders of the country, take trips around the country, so they get a sense of it, be assigned a mentor from the real world, so that they know how the real world and China works. And so when the issue of China comes up, they can be the people who explain what China believes, what China's intention is on an individual thing, so other people won't get angry or aggressive unnecessarily.

ZAKARIA: So, you've got this vast array of companies operating in the United States, but all over the world. What's your take on how the U.S. economy is doing? Is this recovery real?

SCHWARZMAN: I think the recovery is real. You have a number of real strong areas in the economy, housing, for example, is very widespread recovery. We're the largest owner of houses in the United States among the many things that we do, and we can see the housing market strengthening across the country. We've got auto, which is now doing 15 million cars a year, up from 8.5 at the bottom of the financial crisis. So we're seeing pockets of strength.

ZAKARIA: Why do you think that this -- these very strong results across the board in many sectors don't translate more into jobs? Why is it that that while corporate profits are doing well, you still have -- it still seems tough to get the unemployment numbers down?

SCHWARZMAN: Well, I think there's a lag. I think business is cautious. And I think we'll get that increase, particularly as construction starts coming back. It won't be radical, but if you're running a major business today, and you have the uncertainty of the new Obamacare being implemented, you have tax reform of virtually every conceivable type being discussed, it's very difficult to make longer term plans when you don't know what the rules are.

ZAKARIA: You have been critical of President Obama in the past, very critical in some cases, at least the reported comments have you saying pretty strong stuff about him. Do you think that the things still are pretty bad in the sense that are you still -- you still feel President Obama's policies are hurting the economy?

SCHWARZMAN: No, I think he's -- frankly he's a very nice guy, and I get along well with him as a person. I have a different philosophy on certain issues. I think it's equitable that when a country is in trouble, if you have tax policy, everyone should bear some load with the people at the top bearing the most and the people at the middle bearing less and the people towards the bottom bearing very little. But to basically have a tax increase that only affects one-tenth -- excuse me, nine tenths of one percent of the population with income tax increases strikes me as like an odd way to get the country together. We can't solve our budget problems by fundamentally excluding almost everyone in the country. Those numbers don't add.

ZAKARIA: Steve Schwarzman, pleasure to have you on.

SCHWARZMAN: My pleasure to be here.

ZAKARIA: Up next, have you ever thought Parisians are not very welcoming to tourists? Well, whether it's true or not, France has a plan to correct that impression. You'll want to see this.


ZAKARIA: President Obama's trip to Africa brings me to my question of the week. South Sudan was the last African state to gain independence in 2011. Which was the second to last country? A, Eritrea, B, Zimbabwe, C, Namibia or D, Botswana. Stay tuned and we'll tell you the correct answer. Go to for more of the "GPS Challenge" and lots of insight and analysis. You can also follow us on Twitter and Facebook. Remember you can go to if you ever miss a show or a special.

This week's book of the week is Lynda Obst's "Sleepless in Hollywood." Obst answers the question many of you might be puzzling over, why are there no great movies made any more? And why are so many movies, sequels and prequels and part threes and fours. This is a really entertaining book with an important message. And now for the last look.

The world's most visited city this year is not Paris. Paris would like to be number one, since tourism is a huge contributor to the French economy. So the City of Lights is taking on its problem with urgency. The Parisian Chamber of Commerce started a campaign on the Web and in printed pamphlets called "Do you speak tourist?" And it's targeted at taxi drivers, shop keepers and restaurant and hotel workers. It offers suggestions on how to conduct polite conversation with foreigners.


UNIDENTIFIED FEMALE: Hello, I would like to make a reservation for four people.

UNIDENTIFIED FEMALE: Yes, of course. What time would you like to come in?


ZAKARIA: It's also chockfull of advice on what certain nationalities prefer. It claims that Brits like to be called by their first names, Brazilians like Wi-Fi and the Japanese wait until they are back home to make criticisms. These are all national stereotypes, of course. I wonder how most people would characterize the French? Maybe as being a bit rude or stand-offish, right? And that's exactly why Paris had to institute this "get friendly" program in the first place.

By the way, you might wonder what will be the world's most visited city in 2013? Well, according to a study by MasterCard, it's Bangkok, the first Asian city to ever take the crown.

The correct answer to our "GPS Challenge" question is A, Eritrea, which officially gained independence from Ethiopia in 1993. Sadly, it has not extended that freedom to the media. According to the 2013 press freedom index, it is ranked dead last at 179, right behind North Korea, Turkmenistan and Syria.

One final note. In a recent story on global shipping, we overstated the wait time for ships at the Panama Canal. According to the canal authority's own records, the average time for a ship to wait and transit through the canal was 25.66 hours. Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "Reliable Sources."