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Fareed Zakaria GPS

Where Middle East Conflict Leads; Spies, Drones and Money; Growing Popularity of Soccer

Aired July 06, 2014 - 10:00   ET


FAREED ZAKARIA, HOST: This is GPS, the GLOBAL PUBLIC SQUARES. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

We'll start today's show in the Middle East where Iraq has exploded into civil war, Syria's own warheads intensified, and the Israelis and the Palestinians are once again facing off.

How does this all end? With new stakes all together or just unending violence?

I'll talk with two great experts on the future of the Middle East. Then --


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We will not be sending U.S. troops back into combat in Iraq.


ZAKARIA: So can the United States fight against terrorists with just spies and drones? I'll ask a man who once ran the CIA's operations overseas.

Also, despite being ousted from the World Cup, America has become a true soccer nation. Ann Coulter says it's a scary sign of a new America. Peter Bainart says she's right.

Then Washington, D.C. is broken, but America is actually working surprisingly well. I will take you to a place with an unemployment rate half the national average. How does this city do it? I will show you.

But first, here's my take. I've always loved July 4th, one of those special American national holidays that are celebrations not of religion, ethnicity or sect, but rather freedom and of America's unique national identity that is based on it. But around the world these days, we're seeing the rise of another kind of national identity, one that can be darker and more troubling.

In the recent elections for the European parliament, nationalist, populist and even xenophobic parties did surprisingly well. The UK Independence Party beat out all the established parties. France's National Front won handily against the ruling socialist party. In Greece the quasi-fascist Golden Dawn won half a million votes, awarding its seats in the European parliament for the first time.

Many commentators have explained the rise of these parties as a consequence of the deep recession and slow recovery that still afflicts much of Europe, but similar voting patterns can be seen in countries like Austria, Denmark, the Netherlands, Finland and Sweden, which are all doing quite well economically. And the parties that do well center their agenda not on economics, but on immigration and culture, on promoting national identity.

You can see it not just in Europe but around the world. Look at Prime Minister Abe and his plan to reinterpret Japan's pacifist constitution and remilitarize after 70 years. Or Putin in Russia, Erdogan in Turkey, Xi Jinping in China. In all cases assertive nationalism is a core part of the leader's appeal.

Why is this happening? Well, one explanation is that as globalization and technological revolutions transform the world, people feel uneasy, uneasy at the pace of change, and they search for something they can hold on to, as a source of sucker and stability. Look around the world and everywhere we see this phenomenon.

People are worried that their country is changing beyond recognition, and that they are being ruled by vast distant forces, whether the European Union in Brussels, the IMF, or the federal government in Washington, forces that are beyond their control, and by people who do not share their values.

The rise of the Tea Party fits this pattern. After exhaustive research, the scholars Vanessa Williamson and Peter Scotchford concluded that immigration was a central issue, perhaps the central issue for Tea Party members, something that has been reinforced by Eric Cantor's loss in his primary election.

In an age of globalization, elites have discussions that are political ideology, more government, less government, different government, but as Samuel Huntington noted many years ago, the force that seems to be moving the world these days is not political ideology, but political identity. Everyone is asking the question, who are we? And who are we not?

Even in America, even on July 4th.

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

So let's make sense of all of this turmoil in the Middle East and where it's likely to lead. Joining me now to do just that, Robin Wright is a longtime foreign correspondent having reported from an astounding 140 countries. Her latest book is "Rock the Casbah: Rage and Rebellion Across the Islamic World." And Fawaz Gerges is professor of International Relations at the London School of Economics. His latest book is "The New Middle East: Protest and Revolution in the Arab World."

Welcome back to both of you.

Robin, let me start with you. You had a terrific piece in the "New York Times" a year ago that struck me in which you mapped out a new Middle East based on really the realities of the ground. Describe for us what the new map of the Middle East looks like.

ROBIN WRIGHT, AUTHOR, "ROCK THE CASBAH: RAGE AND REBELLION ACROSS THE ISLAMIC WORLD": Well, in the aftermath of the Arab uprisings, we saw a kind of combustible situation emerge that allowed rival ethnicities and tribes and religions begin to fight for their rights with dictators now absent from the scene and that exploded.

Syria, of course, lit the match. And we're now seeing Syria already at least into three different pieces, and that has been explosive in rippling across borders, challenging traditional boundaries established a century ago. We see that play out in Iraq today, where we see the emergence again of three -- at least three different parts of the country, the Kurds particularly in the north, almost kind of de facto establishing their own boundary with the rest of Iraq by deploying Peshmerga, their own militia, along that border.

But it plays out not just in this part of the Levant. It also is playing out in North Africa, where you see the end of Gadhafi's rule three years ago unleashing again rival tribes and all the sources of identity that come alive again. And here we're seeing in Libya, those who live around the capital in Tripoli, looking increasingly toward the western Islamic world and those in Benghazi looking toward the eastern Islamic world, and they have been long-standing rivals over resources and power.

And then you have the south, which is much more like Africa than it is like North Africa. And it's -- you see these dynamics that are rippling across the region.

ZAKARIA: Fawaz, when you have written about this would you have emphasized that the core reason why this is happening is really state failure. The failure of these governments to have built any institution, so that when the dictators left, you realize there was almost nothing there.

And I think of Syria, the place that you come from, which had, what was it, seven or eight coups between the 1940s and the 1970s then had 40 years of highly repressive stability and now is back to a period of pure chaos?

FAWAZ GERGES, PROFESSOR, LONDON SCHOOL OF ECONOMICS: You know, Fareed, this is not about sectarianism or tribalism, it's about state failure. It's a developmental failure. The colonial state, the post- colonial state, the existing state has basically delivered neither prosperity nor security, nor human security in the last 60 or 70 years. Has bled societies dry, has destroyed even the fragile institutions that existed in colonialism and replaced it with a cult of personality.

So you have al-Assad, you have Saddam Hussein, you had Moammar Gadhafi, you have Ali Abdullah Saleh. I mean, people think of them at least as some of the richest regions in the world, and it is, yet, Fareed, out of the 320 million Arabs, 40 percent of Arabs live either in poverty or below the poverty line.

You also had -- have had foreign intervention, think of the American invasion or occupation of Iraq, what it has done to state institutions. How it dismantled state institutions. Finally you have, of course, the lack of progressive leaders in the Arab world. And this is again linked to the crisis of authoritarianism? Where's the Nelson Mandela of the Arab world?

ZAKARIA: Robin, is there any prospect of leadership that has the authority to, first of all, actually control the country, take control of it, you know, in effect have a monopoly of force on the borders, then to build these state institutions, create -- make them inclusive, but still strong enough to actually govern the country?

It seems like a tall order when you look at the characters, you know, at play in Iraq, in Syria, Libya.

WRIGHT: Absolutely, but I think the problem is not as much state institutions as it is the basic principle. And it's hard to build an institution when you don't have an agreement on which to found your democracy, to build those institutions, and who is going to do it, how are you going to divide up the different responsibilities.

And this is where we're seeing increasingly across the region, a kind of Darwinian evolution, rather than democracy taking flower. It's survival of the fittest rather than trying to develop a sense of common good. And that's where Iraq has been such a tragedy. In the same say that Lebanon was when I lived there in the 1980s, when it went through its own civil war, 15 years over the issue of power sharing between Christians and Muslims. And it took 15 years to sort out that basic principle.

The danger is that Iraq becomes Lebonized that you see this become a prolonged struggle over the basic struggle of how do -- whether its Kurds, Shiites, Sunnis, and others -- share power so that they all feel invested in this country. Because if they can't come up with that basic principle, there's no prospect of building institutions, much less holding these countries together. And then we get into kind of -- the kind of chaos that will have a strong rippling effect on whether it's the patterns of trade, energy flows, security challenges not just for the region, but for the outside world as well.

ZAKARIA: Fawaz, what should the United States -- I mean, any outside power but the United States as the principal outside power. What can the United States do? Is what President Obama doing right now a plausible response to this chaos?

GERGES: Fareed, I think what Barack Obama is doing is doing the right thing. And I'll say why. I am very critical of American foreign policy as you know, Fareed, although I myself am American. I've written extensively on American foreign policy on the Middle East.

Barack Obama is correct to basically keep a distance from the killing fields in the Middle East. Barack Obama is correct to let the region develop its own instruments of government. The reality is this is a crisis that only people in the region should and can resolve. What the United States can do and Barack Obama can do is to work with multilateral powers, with the United Nations, the international community, the European powers, the regional powers, invest leadership capital in order to help basically build institutions and also bridge the divide between the contesting and contending forces in the region.

ZAKARIA: Fascinating conversation, sobering, but very enlightening. Thank you both very much.

Let's take this issue to the next step. How should the United States protect itself from terrorism and terrorists in this violent and changing landscape? Can we just stay out and use drones and spies to do the dirty work?

I have two experts to answer just that question, when we come back.


ZAKARIA: President Obama promised three week ago not to send combat troops back into Iraq to fight against the insurgency, but ever since then those insurgents have been gaining ground. So what if they set up terrorist training camps? Will drones do the trick? How about covert operations?

My next two guests are experts on just those topics. Jack Devine surely knows the spy game. He was at the CIA for 32 years including stints as both acting director and associate director of the CIA's overseas operations. His book "Good Hunting: An American Spy Master Story" was recently published. And Greg Johnson is a journalist, scholar and expert on the use of drones. He is the author of "Refuge: Yemen, Al Qaeda and America's War in Arabia."

Greg, let me start with you. You had a very interesting piece in which you said you will not be able to do what the United States has done in Yemen, which is use drones and kind of zap bad guys when you see them in Iraq. Explain why.

GREGORY JOHNSEN, AUTHOR, "REFUGE: YEMEN, AL QAEDA AND AMERICA'S WAR IN ARABIA": Right. So Yemen and Iraq are completely different. In Yemen, al Qaeda in the Arabian Peninsula, they're hiding in mountains they're up in the hills. In Iraq the group, the Islamic State as they're now calling themselves, they're mingling with the population in the cities.

And so what I think we have is the U.S. in Yemen is really trying to bomb al Qaeda in the Arabian Peninsula as a way of containing the groups, so that the group doesn't send any bombs to the United States. We don't have another underwear bomber. We don't have another cartridge bomber. In Iraq, it's different. What you're trying to do is you're trying to uproot this group from territory that they've taken. Drones are amazing. But they can't solve every problem.

ZAKARIA: And so if you're trying to get out of territories you can't use the drone and the problem with using them in cities is that of course you'll have massive civilian casualties since they would be intermingled with the population?

JOHNSEN: Absolutely. The really I think the thing that is the weak link when it comes to drones is, you know, you can hit the car driving down the road, and you can hit nothing else. But if you don't have the intelligence, if you don't have the spies on the ground to know which car to hit, then you're going to hit civilians and then we're going to have a problem like we've had recently.

So what we see is U.S. has been bombing -- using drones in Yemen for the past four years, but instead of al Qaeda getting smaller in Yemen, al Qaeda is getting bigger. And that's a real problem for the Obama administration and if they try to do the same thing in Iraq, my worry is that the same thing will happen in Iraq. That the group will get much bigger instead of being reduced in size.

ZAKARIA: Jack, you've dealt with this kind of situations all over the world. When you look at what's happening in Iraq and Syria, you were back in your old job and told your job is to make sure the terrorists don't gain strength, find them, and help us kill them, what would you do?

JACK DEVINE, AUTHOR, "GOOD HUNTING: AN AMERICAN SPY MASTER STORY": First of all, I think problem solving used to be by heading the plumbing in ahead of time, and anticipating a problem. And I'm hopeful that that's what we have here. Not all Sunnis are supportive of ISIS, OK, so there are groups that we have worked with before.

ZAKARIA: And when you said plumbing, you mean you hope that the CIA has been putting in place friends, allies, informants in Iraq.

DEVINE: Exactly. Exactly correct. Because I think -- Greg's point is right on target. If you don't have the sources, your drone effort is not going to be very good. It's only going to be effective if you have high quality intelligence, and it is not the end -- that is not the solution. Drones are not, I agree 100 percent, are not going to solve the problem but I do believe it's part of the package.

ZAKARIA: You know, what you're describing, it seems to me, is your fear that if you use drones, you produce more of a backlash and it grows the insurgency or the terrorist group. If that's the case, why have we been using drones so much over the last five years and why we're proclaiming it a big success?

JOHNSEN: Right. That's a very good question. In President Obama's commencement address at West Point, he said U.S. actions have to meet a very simple test. They have to kill more terrorists than they produce. And right now the U.S. is not meeting that test. So you look around the Middle East. You look in Yemen. You look in Iraq, in Syria, in North Africa, in Libya and in Egypt and in other places and it seems like the problem is growing instead of being tamped down.

And I think one of the problems -- and I agree completely with what Jack said -- is that you can't go at it, you can't wait and wait and wait and then wait for a crisis and then act. You have to be going all along and I think the problem that the U.S. has had over the past several years is that we've been burned so much as a country by being in the Middle East that we want a hands-off policy and so we do nothing for such a long time and then things reach a crisis point and then it's all or nothing. And that I think is a real problem.

DEVINE: I think Greg and I -- love fest is going to end right here.


I think the drones have immensely successful when you look at their application and we've taken out so many of the al Qaeda leadership. Two thirds. I don't think there's a direct line between those attacks and the growing problem that we have of (INAUDIBLE). We have a much more serious problem in the sectarian Sunni-Shia struggle that is producing warriors for their side. It's not tied directly to the drones.

ZAKARIA: And one of the big lessons that you talk about in your book from Afghanistan is complete withdrawals can leave you with very few options.

DEVINE: That's right. That's where an advocate for using the agency. When you withdraw, you leave behind the agency maintaining the plumbing, adding to the plumbing so that when circumstances require, you're not starting from ground zero.

ZAKARIA: I love the terminology. Maintain the plumbing, keep the agency -- Greg?

JOHNSEN: Yes. So just on Jack's point, the U.S. has done a spectacular job about -- of eliminating people in Yemen. They've killed people like Anwar al-Awlaki, the American-born cleric, Said al- Shihri, a former Guantanamo Bay detainee, who was second in the organization, but they've killed these people, and yet the organization isn't crumbling like many thought it would.

You're cutting off the heads but the organization continues to grow and so I think what the U.S. is facing is the U.S. is facing --

ZAKARIA: But they haven't -- they haven't been able to execute any major terrorist attack in the Western world for a while.

JOHNSEN: Right. They haven't, but they've come very, very close. And we're continually worrying about the bomb maker Ibrahim al-Asiri, we are hearing reports that he has pledged the Oath of Allegiance to the new self-described caliph. And I think the problem is that this is a new type of war for the U.S. and this is a type of war in which success may not be best measured by body bags. So just because we kill more people and just because we kill leaders, doesn't necessarily mean that U.S. wining a war like this.

ZAKARIA: Fascinating. Sobering conversation as well.

When we come back, there is general agreement that China doesn't always play by the rules and trade in economics, so Washington's brilliant solution promoted by conservatives no less is unilateral disarmament.

I will explain when we come back.


ZAKARIA: Now for our "What in the World" segment.

You know countries don't always play by the rules of international trade, especially countries where the government and large companies are really all part of the same team.

Take for example China, the most notorious player who hasn't read the rule sheet. The government of China lavishes subsidies on its companies to make their products more competitive in the global marketplace. And it's not just subsidies that help Chinese companies last year China's government gave its domestic companies $111 billion in guarantees, loans and insurance to help them sell their various products overseas.

And China is just one example. Japan's company has got $33 billion worth of such treatment. South Korea $24 billion. And by contrast the U.S. total was just $15 billion. Keep in mind that South Korea's economy is less than .1 the size of America's. Now this creates a very uneven playing field. One in which it stopped for many U.S. companies to compete. And if American firms are struggling to compete, that's bad news for the millions of unemployed in this country.

So how can America stop these other countries from winning at its expense?

The conservative magazine "National Review," usually a staunch supporter of free trade recently ran a cover essay urging Washington to threaten trade sanctions against China, but if trade war is a nuclear response, slowing growth everywhere, damaging everyone's economy, taking jobs away from Americans and imposing higher costs on all consumers.

A much better idea is to level the playing field somewhat by having a U.S. government agency provide, I don't know, low interest loans to exporters and guarantees to foreign buyers of American goods.

Guess what? We already have one. It's called the Export Import Bank. But Washington is about to shut it down, shut down an agency that has been supported by both parties for around 80 years.

The bank's charter expires on September 30th and Congress will probably not renew it. For the first time ever. Why? Well, because Ex-Im Bank has become what the "New York Times" columnist Joe Nosera called the latest Tea Party pinata.

Eric Cantor's loss has emboldened staunch conservatives, some of whom claimed that the Ex-Im Bank is tantamount to crony capitalism or corporate welfare. Kevin McCarthy, the newly elected Republican leader of the House, recently declared that he doesn't support the bank's reauthorization and that the private sector could perform its functions. The thing is the private sector already covers 98 percent of export financing. The bank is a lender of last resort, accounting for just 2 percent of

annual exports but a crucial 2 percent. Cases where there is a bit more risk than the private sector is comfortable with. The bank says that it has helped to sustain more than 200,000 jobs in 2013 here in the United States.

Much of the opposition circles around the fact that U.S. taxpayers would technically have to foot the bill if foreign buyers would have default. But the chances of default are low. In 2013 Ex-Im actually generated $1 billion in income for the Treasury Department. So, if it creates jobs and makes money for taxpayers, why has the bank become such a rallying cry for the GOP? The Tea Party is keen on taking on big business, and the XM Bank, they say, panders to lobbyists, picks winners and losers and helps giant corporations instead of ordinary Americans. Welcome to the real world of globalization. Where every other major government supports its companies, gives them loans and lines of credit. To cut the one institution that does this for American companies would be unilateral disarmament. It's not as if the Chinese will watch America and say, oh, right we should become free market purists and end all our subsidies. No, they will simply laugh all the way to their state funded, well subsidized bank. Later on GPS, more on jobs. We'll take you to a town with an unemployment rate that is half the national average. But first, do you love soccer? Do you hate it? Either way, you will want to hear Peter Beinart explain how America became a soccer nation, and why Ann Coulter is right to be worried about it.


ZAKARIA: Tuesday's World Cup match between Belgium and the United States was record breaking in terms of live streams and probably lost productivity in the United States for a soccer game. Even though the U.S. has bowed out of the tournament, this country is certainly now a soccer nation. And that scares conservative commentator Ann Coulter, who says the growing interest in the sport is a sign of the nation's moral decay. My next guest Peter Beinart sees things a little differently. He is the associate professor of journalism and political science at the City University of New York and a contributor to "The Atlantic." Peter, you say that people like Ann Coulter are worried about this and are distressed about it, because it wears away at the fact that the United States has been a kind of country apart from essentially the entire rest of the world on this one issue, on this one sport.

PETER BEINART, CONTRIBUTOR, "ATLANTIC" MAGAZINE: Right. Ann Coulter basically believes that part of what makes America great is that America is fundamentally different from the rest of the world and she compares soccer to the metric system. If the rest of the world adopts it, per se it's a good thing if the United States stays apart from it. And I think what you're seeing with soccer is that the willingness to embrace soccer and the willingness to allow America's new immigrants to remain soccer fans without that compromising their Americanism, reflects a shift in the United States. We have a less nativist sports culture, and we are more open, at least some groups in the United States, young people, immigrants, political liberals are more open to liking the same kinds of things that people in other countries do. Thing don't have to be ours and ours alone.

ZAKARIA: And in a sense, part of what the attraction of soccer is, is that you are sharing the sport with the rest of the world, sharing the enthusiasm, sharing, you know, following something everybody in the world is following.

BEINART: Right. And I think this reflects a larger shift. I mean it's really fascinating, if you look at the Pew polling, for instance. Young Americans are far less likely than older Americans to say that America's culture is superior or to say that America is the greatest country in the world. Now, Ann Coulter may see that as pessimism and defeatism and declinism, but I actually think what it reflects is a more cosmopolitan temperament, more of a recognition that America has things to learn from the rest of the world, and that in fact, perhaps we have to learn from the rest of the world if we're going to remain a successful country.

ZAKARIA: Now the kinds of people you were describing as soccer fans in the United States, a younger immigrants, children of immigrants, this all sounds a little bit like this sort of Obama coalition.

BEINART: That's exactly right. And in fact, if you look at the states where soccer is most popular, they're overwhelmingly blue states, and the states where soccer is least popular are red states. The only difference between the soccer coalition and the Obama coalition, is that African-Americans are right now not such big soccer fans and, of course, important parts of the Obama coalition, so African-Americans have a disproportionate devotion to basketball, if you look at the polls. So, but you can see the Obama coalition as essentially soccer plus basketball. The Republican coalition is essentially baseball plus golf plus NASCAR. And then football is our one bipartisan sport, because that's the one that everybody loves.

ZAKARIA: And you really do see this as part of a broader shift, where you - you've been tracking the numbers, that the kinds of things that would define American exceptionalism, are declining particularly among young people, right?

BEINART: Right, so, for instance, if you look at religiosity, which has historically been a dividing line between America and Europe, you find that among younger people there's much less of a stark divide, not because Europe has changed, but because younger Americans are much less likely to be affiliated. If you look at questions about patriotism or even chauvinism, is our country better, you also find that the gap that exists among older Americans has virtually disappeared for younger people. And I think this is part of the openness to the embrace of soccer. It's the same reason that younger people are far much more likely than older people to say they like the United Nations. There's a willingness to accept the idea that America is one of many nations. Yes, we have a special affinity for it, but it doesn't mean that in some objective sense us and everything we do are necessarily better.

You know, in a way I think that famous and much attacked line of Barack Obama is you remember, where he said, you know, "I believe that America is exceptional, and the Greeks think that Greece is exceptional," which the conservatives attacked him so for, I think, actually, a larger and larger number of Americans, especially young Americans that's basically their view, too.

ZAKARIA: And finally, what do you say to people who say I think Ann Coulter among them, that soccer is just boring? That they play for two hours, and it's 0-0 at the end of it.

BEINART: Well, look, you know, you and I both come from families where people play cricket, right?


BEINART: They play for five days into a draw. So, the truth of the matter is, these things are subjective. It is hard, if you didn't grow up, you know, with your father, your mother, your grandparents watching the game as a child, it's always hard to have the same emotional connection that you do to games that you grew up, were part of the culture, that - of the fabric of your life. I think that's actually true. But in a way this is good, this is what Americans need to do. Americans need to be willing to learn, to put in effort, to realize that there are things that don't come naturally to us, and I think that's actually part of the spirit that America needs particularly at this moment of globalization, at a time when America is the power dynamic is shifting and Americans have to be able to learn from the world and compete in a new way.

ZAKARIA: All right. Soccer today, cricket tomorrow.


ZAKARIA: Peter Beinart, thank you very much.

BEINART: Thank you.

ZAKARIA: Next on GPS, I will take you to a state where the unemployment rate is so low the governor's emissaries have to go to other states to find workers. How do they do it? When we come back.


ZAKARIA: The true measure of economic recovery boils down to just one thing -- jobs. The national unemployment rate, which is hovering around six percent, may be the lowest it's been in more than five years, but about 10 million Americans are still without jobs. What's more, only 63 percent of working age Americans have a job or are looking for one. That's the lowest level of workforce participation since 1978. But there is a city that's spurring economic development and it has an unemployment rate that is about half the national average. For the next four weeks, I'll be taking you to areas around the country where America works, places where, far from Washington's dysfunctions and paralysis, local leaders are making stuff happen. Here's my second installment. Come with me to an unlikely boomtown, one that has its fiscal house in order as well.


UNIDENTIFIED MALE: Three, two, one.


ZAKARIA: Floating on the edge of space twice as high as airplanes, balloons like this are being manufactured for Google to maybe someday provide Internet connectivity to remote parts of the globe. Balloons like this are currently conducting surveillance for the U.S. military.


DANIEL RYKHUS, RAVEN INDUSTRIES: I think you could ask just about anyone who works here and they would tell you our purpose.

ZAKARIA: Daniel Rykhus is the president and CEO of Raven Industries, the company behind those balloons. He says his employees understand that their purpose is to solve great challenges and that their reach is global.

RYKHUS: We get e-mails and other correspondence back from the field of actual lives saved, actual accounts of convoys that could have been under attack and weren't because of the surveillance that we provided.

ZAKARIA: But they do have some fun as well. Raven makes the stars of the Macy's Thanksgiving Day Parade in New York City. All this innovation is happening in decidedly modest Sioux Falls, South Dakota. It's the largest city in the Rushmore state, population 164,676. When most people think of the Dakotas these days, they think of the energy boom, but there's no oil or fracking anywhere on these 75 square miles.

MIKE HUETHER, MAYOR OF SIOUX FALLS: We've looked and we cannot identify - we cannot find any oil for a long, long way.

ZAKARIA: Mike Huether says Sioux Falls is a boomtown, nonetheless.

HUETHER: We find our gold and our oil in other places, and that's in the hardworking people of this town and yes, foundations egg, finance, health care, retail, construction - that is what creates the boom for Sioux Falls.

ZAKARIA: They first struck gold when Citibank moved its credit card operations here more than 30 years ago. . Mike Huether worked for the international banking giant.

HUETHER: Citi came here because our bank usury laws were more conducive to banks making money.

ZAKARIA: Due to strict laws in most states, the amount of interest banks could charge on credit cards was lower than the interest rate banks were paying to their depositors. With banks unwilling to make loans, and the entire country in recession, South Dakota saw an opportunity. In 1980, the state passed legislation that exempted banks from such caps on interest rates. So Citi moved in and others followed, transforming this town on the plains.

HUETHER: Opportunities for a young college graduate with an economics or finance degree back in the early '80s, they were pretty limited. Well, when Citibank game, it was just the beginning of something huge for folks like myself.

ZAKARIA: He would know. He runs this town.

HUETHER: Right now this town is rocking.

ZAKARIA: That's right, Mike Huether is now the mayor of Sioux Falls, and he's brought his business skills to government. Mayor Huether has added to the city's piggybank for the past four years. His predecessors did similarly, and Sioux Falls now boasts a reserve that's 32 percent of its operating budget. That's a sizable rainy day fund.

HUETHER: This is the Midwest, this is South Dakota, this is Sioux Falls. And here we value prudence, we value caution.

ZAKARIA: So prudently, the mayor decided to invest in infrastructure. Since 2010, the city has repaired or rebuilt 290 miles of roadway. In 2013, Sioux Falls broke its construction record for a single year.

HUETHER: To me if your infrastructure is not rock solid, you can't go after some of those more visionary, more grand things that are kind of hanging out there on the edges.

ZAKARIA: Like building a talented workforce. Sioux Falls has an unemployment rate of about three percent. That's good, but it also means there aren't enough people to fill the 2000-plus jobs currently available. The problem is statewide.

UNIDENTIFIED MALE: Put down your experience.

ZAKARIA: So the governor of South Dakota actually set up a kiosk in Minnesota's Mall of America to lure workers to his state.

DENNIS DAUGAARD (R), GOVERNOR OF SOUTH DAKOTA: I encourage you to go on the site ...

ZAKARIA: Governor Dennis Daugaard is a Republican.

HUETHER: I'm proud of this state. I'm proud of our governor.

ZAKARIA: Mayor Mike Huether is a Democrat, but Huether insists it's a win-win relationship.

HUETHER: One out of every four tax dollars that is generated in the state of South Dakota is generated out of Sioux Falls. So, the governor knows and I know that when South Dakota does well, Sioux Falls wins. When Sioux Falls does well, South Dakota wins.

ZAKARIA: Huether says they are winning because they are able to do on a state and local level what Washington is failing to do, providing certainly to businesses and families.

HUETHER: It's pretty simple. You infuse compromise, you communicate, you find common ground, and then you get things done. I mean how much more basic can that be? And that is absolutely what's not occurring in Washington, D.C.


ZAKARIA: We'll have more of these installments in the next four weeks.

Up next on GPS, change we can believe in. In Turkey, of all places.


ZAKARIA: It is Independence Day's weekend here in the United States, and that brings me to my question of the week -- what country once celebrated its Independence Day on July 4th? A, the Philippines, B, Rwanda, C, Ireland, or D, Australia. Stay tuned and we will tell you the correct answer.

This week's book of the week is a novel, one that you can read on the beach or on a plane, probably in a few hours. It is the British author Edward St. Aubyns's "Lost for Words." A clever biting look at the world of novelists, book prizes and pretentious literary types in general. The portraits of the people, their quirks, their vanities, their weaknesses are brilliantly rendered. Comic novels are hard to do well. This one does it effortlessly.

Now for the last look.




ZAKARIA: This week Turkey's Justice and Development Party, the act party, announced the Prime Minister Tayyip Erdogan would be its presidential candidate in the August elections. His campaign began immediately, and his logo caught my eye. Take a look. It is a red rising sun. The party said it symbolizes hope, the birth of a new Turkey, unity and togetherness, the winding road they say symbolizes Erdogan's journey of life, but people quickly pointed out that the logo looks a bit familiar. Yes, it is very similar to President Obama campaign logo. At the time Obama's logo was chosen as a symbol of hope and a new day and, of course, because it has an "O." This isn't the only logo people have compared to Obamas. In 2008, South Africa's Democratic Alliance party unveiled this logo. Taiwan Solidarity Union's logo looks like this, and this is the symbol of Egypt's al- Noor Party. In other parts of the world, similarities to the Obama campaign extend far beyond symbols. David Axelrod, the top Obama campaign adviser in 2008 and 2012 is crossing the pond to advise Labor Party leader Ed Miliband's campaign in the parliamentary elections next year. And Obama's most recent campaign manager Jim Messina will advise the other team, Prime Minister David Cameron's Conservative Party. Many elected officials around the world are asking for help, understanding microtargeting, messaging, and the dynamics of social media. But can one really transplant America's strange hyper charged political campaigns to other parts of the world thousands of miles away? I guess the answer is .... (BEGIN VIDEO CLIP)

CROWD (chanting): Yes, we can! Yes, we can!


ZAKARIA: The correct answer to the GPS challenge question was A. On June 12th, 1898, the Philippines declared its independence from Spain, but that declaration didn't work. And it was then sold to America for $20 million. On July 4th, 1946, the United States officially granted the Philippines independence, and they celebrated Independence Day on the Fourth of July until the Filipino president changed the date to June 12TH in 1962. He said that the anniversary of their independence from Spain represented a greater struggle and was more inspiring. If you guessed Rwanda, by the way, it was a good guess, July 4 is Rwanda's Liberation Day, commemorating the end of the genocide. Happy Liberation Day, Independence Day, Republic Day or Friendship Day to all who mark this as a holiday. And thanks to all of you for being part of the program this week. I will see you next week.

ALEXANDRA FIELD, CNN ANCHOR: Hello, I'm Alexandra Field. Here the big stories we're following this hour. A terrifying moment caught on camera as a swimmer is bitten by a great white shark. What shark was hooked on a fishing line and was being reeled in when the swimmer swam right into it. The man was bit across the torso, he was pulled out of the water and rushed to the hospital. He has been released and is recovering at home today. We'll talk to him about the terrifying moment coming up at 2:00 today.

The American teenager beaten in Jerusalem last week allegedly by Israeli Security Forces is speaking out. 15 years old Tarik Khdeir tells CNN he tried to run away, but was attacked. He was released from custody today, but is under house arrest for nine days. It's unclear why he's being investigated or what possible charges he might face.

Pope Francis will meet this week with victims who say they were abused in the Catholic Church. It's his first time he's done that since becoming pope. The meeting will take place at his private residence of Vatican. Officials won't give more details until after the meeting takes place. I'm Alexandra Field, "Reliable Sources" starts right now.