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Fareed Zakaria GPS

Are China And Russia Forming A New Axis Of World Power?; China's Handling Of COVID-19; Russia Continues Military Build-Up Near Ukraine; U.S. Raid Results In Death Of ISIS Leader. Aired 10-11a ET

Aired February 06, 2022 - 10:00   ET



FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world, I'm Fareed Zakaria coming to you live from New York.


ZAKARIA (voice-over): Today on the program, the West watches warily as Putin and Xi appear to get ever closer. Might this relationship, a China-Russia axis, form the basis for a new global divide? I'll ask the experts. Also --

JOE BIDEN, PRESIDENT OF THE UNITED STATES: We will come after you and find you.

ZAKARIA: U.S. Special Forces kill ISIS' top leader in a nighttime raid in Syria. It raises the question just how strong is ISIS today? How much of a threat does it pose? Fawaz Gerges will join me.

Finally, from cars to milk to housing and more, we are paying more than we were a year ago for so many items. Inflation is to blame for certain, but just how bad is it? I will do a deep dive that might surprise you.


ZAKARIA: But first, here is "My Take." It's a tale of two Olympics. Remember the 2008 Beijing Games? China was dazzling the world with its economic prowess and technological sophistication, determined to impress the world with its soft power. Praise filled the headlines in countries like Australia, the United Kingdom and the U.S. The "Sydney Morning Herald" said that the opening ceremony was a perfect 10."

London's "Evening Standard" described the event as the beginning of China's new era of greatness, witnessed and implicitly approved by much of the leadership of the planet." And indeed, there was George W. Bush, the first American president to attend an Olympics in a foreign country, telling the press that the Beijing Games exceeded my expectations.

Compare that to the Beijing Winter Olympics that began last week. Those same countries, the U.S., the U.K. and Australia, have all announced a diplomatic boycott of the games for human rights concerns. No major Western head of state is attending. The star of the show is China's ever closer ally and satrap Vladimir Putin.

The event itself is taking place without the usual screaming crowds and Olympic cheers. Traveling to China is nearly impossible due to the pandemic and the government is barring most ordinary people from attending, all of which means that the stadiums and other venues are essentially TV studios, beaming out sports that are being played in front of near empty arenas.

The COVID situation in China is a metaphor for one of the problems plaguing the country, its government's rigidity. China handled the initial outbreak of COVID brutally but very effectively, achieving what in some ways is the world's most successful pandemic containment strategy. The country has under 5,000 reported COVID deaths. Compared to America's, putting aside the possibility of underreporting, the difference is staggering.

But as many experts have noted, China now faces a real COVID nightmare. Omicron spreads so easily and fast that pursuing a zero COVID policy is like putting a finger in a dike. And China's vaccines do not appear to be very effective at preventing breakthrough Omicron infections. Add to this, the fact that according to official reports few of China's 1.4 billion people have tested positive for COVID, meaning so-called natural or virus-induced immunity is relatively low.

Every January the Eurasia Group announces a list of the top 10 global risks. This year China's zero COVID policy was the number one risk. There is a broader cost to China's COVID policy, it has cut the country off from the world. For the last two years China's president and many of its senior officials have not traveled abroad. Few diplomats and businesspeople go to the middle kingdom anymore. Tourists have basically been banned.

This is a major reversal of decades in which China reached out to the world and tried to integrate itself into global institutions. When Deng Xiaoping began China's reforms the phrase he used so often that it became a mantra was reform and opening.


That opening feels like a distant memory now. Today it's crackdown and close up. In some ways COVID highlights a central flaw in the Chinese model. Beijing can operate with ruthless efficiency which often makes Western democratic policy-making seem chaotic and second rate, but when a dictator's chosen policy needs to be changed, it's very hard for a dictatorship to correct course.

The best example of this rigidity is China's one-child policy which gained momentum in the 1980s. Now a strategy that might have made some sense in the '60s and early '70s when Chinese population growth was worrying and the economy was faltering, proved counterproductive by the 1990s by which time demographic vitality would have been an asset, but it took Beijing years and years to change. Now it appears efforts to reverse the policy's effects may be too late.

Democracies for all their flaws can switch policy and policymakers with much greater ease. In Washington these days many look enviously at the Beijing government's efficiency and its ability to use state power to generate economic growth. We wonder whether we need more direct industrial policy with government picking national champions and protecting industries with tariffs and subsidies.

It might be worth taking a closer look at what is actually going on in China. Beijing has succeeded wildly in some areas, but that same government, those same bureaucracies, have made major mistakes from persisting with the one-child policy to accumulating mountains of debt. The black box that is China's government often looks more impressive from the outside.

America's openness and competition, economic, political, social, often looks chaotic, but over the centuries it has endured while many seemingly efficient models of government have failed.

Go to for a link to my "Washington Post" column this week. And let us get started.

China state news agency reports that at Friday's meeting between Putin and Xi in Beijing, the two agreed to deepen strategic coordination and they pledged to support each other in safeguarding sovereignty. After the meeting the two nations also released a joint statement opposing any further expansion of NATO.

What to make of it all. Let me bring in today's panel. Gideon Rachman is the "FT's" chief foreign affairs columnist. There's a big story in the paper recently entitled "Russia and China's Plans for a New World Order." He is also the author of an upcoming book "Age of the Strongman." Cindy Yu is an editor at "The Spectator." She hosts the magazine's podcast, "Chinese Whispers."

Gideon, welcome. Let me start with you and ask you how did we get to this point? If you go back 10 years ago it certainly seemed that the United States was in this kind of almost Bismarckian position where it had better relations with both Russia and China than the two countries had with themselves. What has happened that has gotten us to this Russia-China axis?

GIDEON RACHMAN, CHIEF FOREIGN AFFAIRS COMMENTATOR, FINANCIAL TIMES: Well, I think a couple of things. I think, firstly, both Putin and Xi have come to the conclusion, possibly a false conclusion, that they are threatened domestically at home by the possibility of what they call color revolutions which are referred to explicitly actually in the Russian-Chinese joint statement after their meeting, by which they mean a kind of American-sponsored upheaval, attempt to overthrow the regime.

And they have this joint interest in a sense in making the world safe for autocracy. You'll remember Woodrow Wilson, the U.S. president, talked about making the world safe for democracy. But I think Russia and China have decided that they want to make the world safe for their autocratic regimes by pushing back against what they regard as these U.S.-inspired things that they would point to, say, Ukraine, the Russians believe that America was essentially behind the overthrow of a pro-Russian president. The Chinese say that the Americans were behind the uprising in Hong

Kong. But also I think there's a more offensive aspect to it, which is that they have a joint perception that America is also getting weaker, going back to the financial crisis, the problems with the pandemic that you referred to, you know, the storming of the Capitol, the fall of Afghanistan, you name it.


There's a lot of reasons why they think now is a good time jointly to push back against American power.

ZAKARIA: Cindy, I wonder how much of this, though, has something to do with Western policy as well. I mean, I can't help but thinking that you had these same issues in the 1970s in a sense with a closely allied Russia and China, and the Nixon administration with Henry Kissinger was able to very deftly separate the two and drive a wedge between them. Is Western policy in some way driving them together?

CINDY YU, BROADCAST EDITOR, THE SPECTATOR: Yes, Fareed, I think that's right. If you think back to the '70s, that period of time you're talking about, cracks had already been showing between the USSR as it was then and Communist China, but what Nixon was able to do (INAUDIBLE) with Chairman Mao was really formalize that and to, you know, spread aside these two communist allies which really brought on the end of the Cold War later. And China was also able to benefit from that because at that point it didn't really want to be under the Soviet Union's wings anymore.

Right now what the West is doing, but I'm not sure it's got much other option, but what it is doing is pushing Russia and China further together. And one way we can see this is, for example, through energy. So when we're talking about, for example, the Russian pipeline into Germany or Nord Stream 2 for natural gas, you know, America and Washington has been very clear that this is not a good idea for Germany to be reliant on Russian gas, yet if Germany is not reliant on Russian gas that gas is going to be sold to China.

And that's what we've seen in the last 10 years, that the Chinese market has become increasingly important to Russian energy suppliers. So, you know, through, you know, reducing Western reliance on Russia, what we do is increase Russian reliance on China.

ZAKARIA: Gideon, aren't these two countries very different in a kind of odd couple, in a way? China is fundamentally a rising power. Russia is fundamentally a declining power. The Atlantic Council has a nice interesting report on the two called axis of collusion, the fragile Putin-Xi relationship. It makes a point that, you know, there's all this rhetoric of partnership but underneath it Chinese investment in Russia is actually declining.

The Chinese are not trying to help Russia, for example, diversify its economy away from the petrol state that it is. Do you think that the West should be exploiting those tensions?

RACHMAN: Well, I think, you know -- I think it's probably easier said than done. I mean, this idea of doing, if you like, a reverse Kissinger and perhaps pulling Russia away from China because China is now the bigger threat is an idea that does the rounds and think tanks you'll have heard it talked about, but it's not as simple as that because for the moment these two countries do have shared interests.

What is the case, however, is I think that in the long run you clearly can identify divergent interests and actually say China, you know, is the rising power, its economy is much, much larger than that of Russia, its population is 10 times that of Russia, and even potentially in the future there could be territorial tensions between Russia and China. A lot of modern-day Russia was once in China, you know, in the 19th century.

And the Russians I think are anxious that all of their energy resources, most of them are in the east, which is very underpopulated. China is very, you know, short of energy. So you could see maybe in a decade's time potential tensions between the two countries, but I just don't think that's where we're at right now because I think at the moment they currently have a joint perception of an American threat.

ZAKARIA: Stay with us. When we come back I'm going to ask Cindy about the Beijing Olympics and Gideon about whether Russia will, in fact, invade Ukraine.



ZAKARIA: We are back with Gideon Rachman of the "Financial Times" and Cindy Yu of "The Spectator."

Cindy, you've written a piece in "The Spectator," that's very similar to some of the points I made in my opening commentary. So let me ask you to expand on it. Where does China go for now? Is there discussion about, you know, dealing with COVID somewhat differently because I'm struck by the fact that other countries that have pursued a very tough policy, kind of zero COVID policy like Australia, New Zealand, Taiwan, Singapore, they're beginning to ease up.

They're recognizing that Omicron is going to spread like wildfire no matter what you do. What is going on in China? The government is very, very smart and competent and are they beginning to move in that direction, even in small ways?

YU: Well, there's not enough discussion of what comes after zero COVID, really, because, you know, whereas in these other countries you have these discussions in civil society and public opinion about living with COVID. There's not really a sign of that in China. Last summer there was one state epidemiologist, Dr. (INAUDIBLE), who tried to say, you know, at some stage we're going to have to live with COVID.

What happened instead was that he was subjected to an online witch- hunt. They investigated -- they triggered an investigation into his dissertation, plagiarism inquiry. So it's completely a witch-hunt and he's kind of stopped talking about that line of argument now and we don't really see really much else.

I think China does obviously want to be thinking about its next stages but it was never going to do that this year because in October is National Party Congress, which is when President Xi was meant to have stepped down, but obviously because he has abolished term limits he's not going to be stepping down anymore.


But nevertheless it will be a politically sensitive time to mark his first decade in power. And there was just no way they were going to risk some kind of COVID outbreak before then. So as I've written in "The Spectator," until then the country is in a holding pattern, locking down wherever it sees COVID, even one case is too many and then easing lockdown when locally transmitted cases are completely gone, which is obviously socially economically damaging but in terms of the absolute results, in terms of the lives and infections it is highly effective.

ZAKARIA: Cindy, let me quickly ask you about something. George Soros, the legendary investor and philanthropist, made a speech in which he predicted may be too strong a word but he cautioned that Xi might not get his third term, that there is rising opposition within China and that if COVID goes very badly things could unravel.

As far as I can tell that sounds more like wishful thinking than careful reading of actual things on the ground. Would you agree? I do not see much potent opposition to Xi getting his third term in China.

YU: Yes, I would agree with you, Fareed. If George Soros can point us to where that opposition is, I'm sure many people would be very eager to hear about it. You know, there are signs, there are always signs, but China's political system is incredibly opaque, nobody really knows what happens behind the scenes until decades later when memoires get written and even then, that's not common.

And with the COVID situation obviously it's part of President Xi's political legacy now but it doesn't look like it's failing. You know, it looks like it'd be, you know, indefinitely continued as long as President Xi is happy to pay the price through the economy. But even with the economy, you know, it's still growing. So China has not had the economic damage that a lot of other countries in the world have had either. So I don't really think that President Xi will be stepping down this year, no.

ZAKARIA: Gideon, let's switch, if we can, to Russia. What do you think? Is this all kind of coercion diplomacy designed to get something from the West, or does Putin really want to teach Ukraine a lesson?

RACHMAN: Look, I think that the real truth is that nobody really knows and there is a good reason for that which is that the decision will ultimately be taken by one man, Vladimir Putin. He is expectedly a new czar, he's ordered this buildup of troops, he may not even have made up his own mind. And I know that people who deal with Russian officials say that they sense a kind of uneasiness amongst them because they don't quite know where this is going to go.

But I think what you can say is that there is a division of opinion amongst the Western allies. As one French diplomat put it to me, the Americans think an invasion is imminent and we, the French in this case, think it could be imminent. In other words, they're both seeing the same buildup of forces and they're both very concerned by, in particular by the move of troops into Belarus, which is two hours' drive from Kyiv.

And as far as the Americans see it, you know, there's been an intensification over the last two weeks, Russia is putting in all -- everything it would need to stage an invasion which could be -- include actually going all the way to Kyiv. And I think the Americans think that as Biden said publicly, he's going to do something, but the Europeans, in fact, Macron was just saying, who's going -- President Macron of France who is going to Moscow tomorrow are now saying that, well, maybe, you know, we are now on the diplomatic path and we can talk him out of this.

But, you know, we will find out soon enough. And as I say, Putin himself may not have fully decided.

ZAKARIA: Gideon Rachman, Cindy Yu, pleasure to have you on. Thank you so much.

When we come back, we're going to talk about the head of ISIS who died in a U.S. military raid this week. Is ISIS still powerful? We will get the answers from Fawaz Gerges.




BIDEN: Last night's operation took a major terrorist leader off the battlefield and has sent a strong message to terrorists around the world, we will come after you and find you.


ZAKARIA: That was President Biden Thursday morning after an overnight raid killed ISIS leader Abu Ibrahim al Hashimi al Qurayshi. And it raised the question, what is the state of Islamic terror and ISIS specifically? Is it still a major threat?

Joining me now is Fawaz Gerges, professor of international relations at the London School of Economics and the author of "ISIS: A History."

Fawaz, welcome. First, give us a sense of what al Qurayshi's death means. Is this a body blow? How would you describe it?

FAWAZ GERGES, PROFESSOR OF INTERNATIONAL RELATIONS, LONDON SCHOOL OF ECONOMICS: Well, I mean, I think the killing of al Qurayshi will have more of a tactical impact on the Islamic State than a strategic impact. My take on it, Fareed, and I'm very harsh on American foreign policy, is that American politicians tend to simplify very complex problems. Killing one individual regardless of how important this individual will not really put a permanent end to the Islamic State.


What has happened -- what has happened in the past few years, after the dismantling of the khalifat, the physical khalifat in Iraq and Syria the group has mutated into a resilient insurgency, a low-cost, resilient insurgency.


It has a few thousand fighters, low-cost operations. It has sprawling operations in Syria and Iraq and Afghanistan. It has carried out thousands -- not hundreds, Fareed -- thousands of attacks in Iraq and Syria and Afghanistan. It has targeted mainly tribal figures, village elders, security forces, local leaders. And it has basically, you know, shown its ability to persist.

We're not witnessing the resurgence of ISIS; we're really witnessing the persistence of this particular resilient and potent insurgency.

ZAKARIA: And what should one do about it, Fawaz?

Because it seems to me -- I followed the -- the attacks that you are describing, and it seems that ISIS, particularly in Iraq and Syria, is feeding on a certain amount of Sunni resentment against how they are treated, particularly in Iraq, by the Shia majority. In Syria it's a little more complicated, but there are, kind of, hard-line Sunnis.

You know, if that sectarian dynamic is at its heart, what does the United States as an outside force do?

GERGES: Well, I mean, I think insurgencies, as we know, insurgencies can go for a long time, local insurgencies. It's about really addressing the grievances of the local populations. It's not just whether in the Middle East, all kind of local insurgencies, historically.

So in both Iraq and Syria, the Islamic State basically taps into mountains of grievances by Sunni communities. Let me give your viewers a glance -- a glimpse of what we're talking about.

You still have tens of thousands of Sunnis in Iraq who are treated like criminals because ISIS functioned within their own communities. They are placed in -- in detention camps; they are excluded; they are treated like basically criminals. And they are collectively punished.

So ISIS, even though it lost the Khalifa, the territorial Khalifa, in 2017, in Iraq, it has been able to find a refuge within these Sunni communities in Iraq. In fact, your question is so important because there is a growing evidence now that ISIS, or the Islamic State, has been able to renew its ranks with younger recruits from members of families who have had ties to the Islamic state, and also members internally excluded and angry Sunnis. This is in Iraq. In Syria the Kurdish-led militias who basically control the prisons,

where you have thousands of Islamic State fighters and tens of thousands of family members, have not really been able to build the trust with the local communities, mainly local Arab and Sunni communities in northeastern Syria. So ISIS, this insurgency, has been able to really find a refuge.

And the question is, how do you address the grievances? How do you deal with punishing poverty? How do you provide security and -- Fareed, look, the United States is missing in action. It -- really, the American foreign policy team is missing in action.

ZAKARIA: Let me ask you...

GERGES: It has not invested much...

ZAKARIA: Let me ask you, Fawaz, about, on that issue, you wrote a very prescient piece in Foreign Policy in August of 2021, as the Taliban was taking control of Afghanistan. You wrote, "The Taliban can't control Afghanistan. That should worry the West."

And you predicted that ISIS would be, along with Khorasan, this major problem in terms of just the Taliban taking over, which has proved to be entirely true. They face terrorist attacks all the time.

How unstable is Afghanistan? And do you worry that it could become the cockpit once again of terror groups getting larger and larger as the instability grows?

GERGES: Well, you know, there is -- we're not really talking about mysterious challenges. We know, where the Islamic State or Al Qaida or ISIS-K in Afghanistan, how they are nourished, how they survive, how they persist, how they basically find ways and means to exist, conflict zones, economic collapse, civil strife.

So if Afghanistan -- basically, if the economy collapses, as it seems to be the case; if the United States allows Afghanistan to go through this, I mean, massive economic and social collapse, I have no doubt in my mind that ISIS-K will be able to find a refuge, and even Al Qaida, the same way in Syria and Iraq.


And when I talk about the American foreign policy team missing in action, zero diplomatic investment in Syria, zero diplomatic investment in the Palestine-Israel conflict, allowing local conflicts basically to be exacerbated and escalate.

So it's not just, to come back to your earlier question, it's not just about killing key individuals, important as they are, it's about addressing the grievances and the institutional breakdown in the geostrategic...

ZAKARIA: On that...

(CROSSTALK) ZAKARIA: On that note of harsh indictment, Fawaz, I have to let you go. Thank you so much, as always. And we will be back.


ZAKARIA: Big tech should be called "massive tech" these days.


America's tech giants are becoming unfathomably large and powerful. Apple's market cap is almost $3 trillion. That is a 3 followed by 12 zeros. Microsoft isn't too far behind. And the titans of the industry have net worth's to match.

Forbes says the three richest people in the world are Tesla's Elon Musk, Amazon's Jeff Bezos and Microsoft founder Bill Gates.

Democratic Congressman Ro Khanna's district is the beating heart of tech money, Silicon Valley. Apple and Google are both headquartered in the area he represents. But Khanna acknowledges that America has a big tech problem and says we need to fix it. His new book "Dignity in a Digital Age" is all about solutions.

Ro, thanks for joining us.

And, first, let me just ask you, is it fair, when people look at these tech companies, they see extraordinary efficiency and competence and, you know, provision of services, for sure, but there are a lot of people who say we also see monopolies, places that make it very difficult for other -- other up-and-comers to compete. This is an argument that, you know, Elizabeth Warren makes all the time.

Is that basic critique fair about America's tech giants, that they are anti-competitive monopolies in some -- some form or the other?

REP. RO KHANNA (D-CA): It's fair to say that we need stronger antitrust enforcement against the companies. I think it's unfair to say "Let's just break them all up." The question is how do you do it?

My view is you should not allow companies to have big mergers, like Facebook acquiring WhatsApp and Instagram, without a default position that it's anti-competitive to be overcome by those companies, and these companies shouldn't be allowed to discriminate against sellers on their platform without actually showing that there is some real consumer benefit to doing it.

So we definitely need stronger antitrust laws.

ZAKARIA: But how do you do it?

I mean, what I don't understand is, I mean, fine, if you were to break Google and YouTube up, what would that do?

I'm -- I'm not sure I understand -- you know, the nature of the digital economy is that the first mover has huge advantages and the person who establishes the standard, kind of, everybody goes to. The reason we use Google is because everybody else uses it, and so the search results are much better because of that -- that fact, you know, what they call "network effects."

How do you -- how do you fight against that if you need to?

KHANNA: So you do things like you can acquire competitors, right? That's why I give the example with Facebook and Whatsapp and Instagram. You could certainly say that Facebook shouldn't have acquired Whatsapp and Instagram so you had more discursive spaces and more social media platforms.

But one point, Fareed, I don't think antitrust is the silver bullet to solve the biggest issue, which is that a lot of Americans have been left out of the wealth generation of the digital economy and these 25 million jobs, and how do we actually get more things like Intel into Ohio and creating jobs?

And the book really focuses on how do you decentralize it? Antitrust is not some magic wand that would do that.

ZAKARIA: Right. So -- so let's talk about that. How do you make that happen and why -- if it were a good idea, wouldn't the market be doing it anyway?

I mean, in other words, are you fighting pretty fundamental forces of the market in forcing some of these companies to go into places where they have not found a competitive advantage to doing so?

KHANNA: You know, structuring the market to incentivize that, for the longest time, here is what happened. The digital economy, globalization, took place, and you had people say, "No problem, we're going to create wealth; there's going to be this knowledge economy; go move to the jobs."

Well, the result of that is what we have, a huge wealth generation in my district, in New York, in Austin and Seattle. In large parts of America, though, you've seen de-industrialization, job loss, people actually talking about the brain drain in rural America, where their kids have to leave. And I think it was tone deaf to the importance people still put on community to -- and led in part to conditions where you see the rise of populism.

So I actually believe we should have place-based incentives. Part of it is simply investing. Why aren't we investing in digital grant universities and colleges like Abraham Lincoln did in the land grant colleges?

Why aren't we having public-private partnerships in places like Ohio, with Intel and Ohio State, why aren't we doing that across the country?

And I think we could do it; it's just been drift and neglect in taking advantage of all of the places there's talent. Mitch Kapor says that "genius doesn't come restricted in a zip code."

ZAKARIA: Do you get pushback from your constituents? There is a kind of irony here. You are representing Silicon Valley and

you are at some level a critic of big tech.


KHANNA: I do. Just this morning I got a call from one of the companies saying the CEO wasn't happy because I thought that there should be stronger antitrust legislation.

But I would say that there have to be well-crafted regulations and there has to be a balance. And I guess the, in a nutshell, my position is not let's just reflexively break up these companies, but it's also not let's allow things to continue the way they are. There have to be well-crafted regulations and there has to be an economic incentive of decentralization.

And that's the fundamental question. Do you believe that globalization should just go unchecked, lead to these concentrations of wealth, and have huge parts of the country left out, which has been the case for 30, 40 years, or do you think that's exactly the conditions that will give rise to what Donald Trump exploited and that we need, actually, government to play a steering role and make sure that globalization, digitization, are working for left-out communities?

I believe, if we don't do that, you're going to have the conditions of populism over and over again.

ZAKARIA: Ro Khanna, pleasure to have you on.

KHANNA: Thank you, Fareed.

ZAKARIA: Next on "GPS," think prices have been going up?

Of course they have. But we will take the long view and show you what the trends really look like when you pull out a little further.



ZAKARIA: And now for the last look. Americans are struggling with inflation. Prices have jumped for everything from hamburgers to housing, making it harder to stretch a paycheck. But step back and the picture looks less dire.

In recent decades inflation had stayed usually low. From 1960 to 1980, for example, prices rose 166 percent. In the next two decades they rose 117 percent. But from 2000 to January 2021 prices rose just 55 percent, including all of last year, from 2000 through December 2021, prices rose 65.5 percent.

That is a huge uptick in one year, and it is throwing household budgets out of whack. But taken as a whole, we are still in an era of low inflation.

Now, one reason prices probably stayed low for so long is because wages stayed low. This graph looks at wages going back to 2001, adjusted for inflation. You see workers didn't start to make real gains until the late 2010s, and now inflation is eating into those gains. But they have made gains. And perhaps, as inflation subsides, those gains will grow again.

Cheap goods helped keep inflation down in the last two decades. Have a look at this graph by Mark Perry of the American Enterprise Institute. Remember, overall inflation since 2000 was 65.5 percent. The blue lines are expenses that have stayed below general inflation or even gotten cheaper, products like cars, clothing and TVs.

And consider TVs. One reason they got cheaper was globalization, as other countries can produce goods at lower costs. Another reason was innovation. TVs use microchips, which have grown cheaper even as they have grown more powerful.

A further reason is quality, and this is a bit of a technicality, but it matters. Take a TV from 2000 with a sticker price of $300 and a TV that costs $300 today. Today's TV will be bigger, have better picture quality, better sound quality, connection to the Internet and, therefore, the option of infinite movies and shows on demand.

So statisticians raised the price of the old TV to reflect the fact that, with the new one, you're getting more bang for your buck. The lines in red shows things that have gotten less affordable, mainly services like health care. Obviously, health care is more essential than a new TV. There are a number of explanations for skyrocketing health costs, regulation administrative demands, hospital mergers, the limited number of slots for training new doctors.

So there's a lot that can be done to rein in costs, but that's not the whole story. The statisticians don't really adjust for quality of service like health care. Heart surgeries, for example, may have gotten more expensive, but they are also better, more effective. And the benefits of cutting-edge drugs and techniques have been significant.

From 2000 to 2019 life expectancy in the U.S. increased by a whole two years to 78.8. This was in a period that included terror attacks, two wars in the Middle East and the opioid epidemic.

Look, I don't mean to be a Pollyanna. We have seen a scary surge in inflation and families are struggling. But the flip side of the low inflation of the last few decades had been stagnant wages for a long, long period. Let's hope we can find a better balance, with rising wages and what is still by historical standards low inflation, and at the same time continue to reap the benefits of human progress that have helped us to lead better and longer lives.


Now, before we leave, I want to say thank you to someone who has been central to this program's success. For the nine years that he was president of CNN, Jeff Zucker always supported and encouraged us. He did the same with my documentary unit, for which he was the cheerleader in chief. He gave us ideas and urged us to range widely, covering history, foreign countries, culture, whatever made for a compelling story. He is at heart a news junkie, in the best sense of the word, passionate about America and the world and always curious to know more and go deeper.

He was also a great boss, smart and straightforward, tough, but fair. If we made mistakes, and I did, he always leaned toward giving people a second chance. I wish him all the best in the next chapter of his life.

Thank you, Jeff, for everything. And thanks to all of you for spending an hour with me. I will be back next week.