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Fareed Zakaria GPS

Grading President Biden's Middle East Tour; Interview with Iraqi President Barham Salih; Interview With Finnish Foreign Minister Pekka Haavisto. Aired 10-11a ET

Aired July 17, 2022 - 10:00   ET

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

[10:00:00]

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.

(BEGIN VIDEOTAPE)

ZAKARIA (voice-over): Today on the program, Joe Biden's first trip to the Middle East as president. What was accomplished, what was left on the table, I'll ask an expert. Then.

(On-camera): Mr. President.

(Voice-over): I sit down with one of the most respected leaders of the region. Iraq's president Barham Salih on America's new push into the Middle East.

And as Finland waits for its NATO application to be ratified, it is making preparations to close its 800-mile long border with Russia. I will talk to the Finnish foreign minister about what he thinks Putin's next move will be.

(END VIDEOTAPE)

ZAKARIA: But first, here's "My Take." Ron DeSantis e-mailed me the other day, me and hundreds of thousands of others I imagine.

"Our country is currently facing a great threat," he began. I assume that with inflation soaring, gas prices still sky high and the economy in danger of slowing down, he would hit hard on those themes. But these bread and butter issues were not mentioned anywhere in the e- mail.

"A new enemy has emerged from the shadows," he continued, "that seeks to destroy and intimidate their way to a transformed state and country that you and I would hardly recognize."

As you might by now have guessed, this enemy is the radical vigilante woke mob. Some of this is a clever effort by DeSantis to tap into the base of the Republican Party and outflank Donald Trump on the kinds of issues that propelled Trump into the Republican nomination in 2016.

And the reason New Hampshire poll of likely Republican primary voters that had DeSantis neck and neck with Trump should worry Donald.

The Florida governor has much less name recognition than Trump and yet, in a bellwether state, the Floridian has caught up. But it also reflects the looming electoral strategy among Republicans who believe they have found a deep vulnerability among Democrats. A recent comprehensive "New York Times" poll seemed to confirm this view.

Analyzing some of the findings of the poll, David Leonhardt wrote many Democrats both politicians and voters especially on the party's left flank see more focused on divisive cultural issues than on most Americans' everyday concerns like inflation.

To be fair, President Biden still beats Donald Trump in a head-to-head matchup but that dynamic might not help the Democrats in the midterm elections when Trump is not on the ballot.

There is plenty of evidence that the Democratic Party has moved left, that it is out of sync with Americans on many of these cultural issues, and that it needs to correct course. But it needs to do so clearly and forcefully and repeatedly.

Republicans are clever at weaponizing the words of a few left-wing Democrats and then branding them as the face of the party. For example, I have not found a single senior national Democratic leader who has ever endorsed the idea of defunding the police. Biden actually proposed increasing funding for cops, and yet Republicans have repeated this mantra constantly.

Democrats need to learn how to fight back, for example, by highlighting the most extreme abortion bans passed in Republican states and branding the Republican Party with them.

In Oklahoma, abortions are now banned with very few exceptions from the moment of conception onwards. In Mississippi, a doctor could face 10 years in prison for performing an illegal abortion.

Yet Democrats have another big weak spot and it centers on performance. Democrats in power often seem unable to get anything done.

Democrats squabble more and more in public than Republicans despite the fact that much of the GOP party establishment despised Donald Trump. Once he was elected, they nearly all fell in line, mostly passed his agenda and supported him unfailingly.

Democrats by contrast rarely remind the public of the two big bills that they did pass, COVID relief and infrastructure, and in fact spent months bickering over the third one that they've proposed, Build Back Better.

[10:05:02]

Why is the Biden administration not announcing large new public work projects every week financed by the federal funds appropriated in those two bills? The answer to that question might be that it has become very difficult

to build anything in America especially in blue states. President Obama who passed another big infrastructure bill in 2009 famously said later there is no such thing as shovel-ready projects.

That's because, as Ezra Klein has noted, the number of permits, reviews, and delays that have become part of the normal approval process have massively delayed or doomed the prospects of large scale public works in America.

Democrats have become paralyzed by their own ideas and interest groups and no one seems to be able to break through and actually get things done. It's not that there is any shortage of money.

Consider the state where I live, New York. The state budget is an eye- popping $220 billion. Florida with two million more people than New York state spends half that sum. In addition, New York City's budget is $100 billion.

That is more than double the budget for the entire state of Illinois, and Illinois's population is some 50 percent larger. New York is the most heavily taxed state in the country. Its tax rates are highly progressive.

The top 1 percent of New York City residents pay over 40 percent of the city's income taxes. And yet, New York's infrastructure and services at every level are in bad shape.

This is not a perception problem. It is a reality problem. Democrats need to once more become the party that gets stuff done, builds things and makes government work for people.

Go to CNN.com/fareed for a link to my "Washington Post" column this week. And let's get started.

President Biden was wheels up from Saudi Arabia 24 hours ago and President Putin will be wheels down in Tehran two days from now. The White House says it has gathered intelligence that Iran is preparing to provide Russia with hundreds of drones for use on the war in Ukraine. Iran denies this allegation.

The big question is, are the new Cold War battle lines being solidified in the Middle East? To understand more about Washington's reset with Riyadh and Moscow's relationship with Tehran, I want to bring in Vali Nasr. Vali is a professor at the Johns Hopkins School of Advance International Studies and a former State Department adviser.

Welcome, Vali. First, tell us about this drone business. Is Russia in a kind of tacit alliance with Iran? Is Iran helping the Russians out?

VALI NASR, PROFESSOR, JOHNS HOPKINS UNIVERSITY: Well, Iran and Russia have had very strong military and intelligence relationship that goes back to Syria but this is the first time that we're hearing of a large scale Iranian military equipment being sold to Russia.

So this is a new step but it really underscores the fact that the relationship between them is strong and it's mostly in the intelligence and the military field than it does matter to regional balance of power.

ZAKARIA: Now, I am struck by one thing. It does suggest that despite all the sanctions, the Iranians are still able to manufacture something as, you know, reasonably sophisticated as high quality drones.

NASR: That's exactly the case, although we don't know much about these drones and how good they are, but in fact it's very ironic that it's the White House that it's advertising this fact in the Middle East.

You know, maybe they were hoping to by lumping Iran and Russia around Ukraine to create a greater dissatisfaction with Iran and Europe but in the Middle East, the United States is attesting to Iran's technology capability of having weaponry that the Russians would be interested in.

ZAKARIA: And what about the Biden trip? From your point of view, does it seem like the part of the trip that was intended to solidify a kind of Saudi Arabia, Israel, UAE axis that was pro-American and, you know, to a certain extent anti-Iranian. Is that dynamic working?

NASR: It is not working the way in which United States and Israel would like to portray it as if that there is a very hard and fast, you know, fault line in the Middle East between Arabs and Iranians.

[10:10:00]

I mean, first of all, Putin's visit to Tehran shows that there are other big powers in the region and the United States is not the only player and Russia has very deep relationships around oil and energy with UAE and with Saudi Arabia.

Secondly, not all the Arabs that the president met are sold on the idea of lining up against Tehran. Egyptians, Jordanians don't have an issue with Iran. Qataris and Omanis are working very hard to make JCPOA work, and even the president himself was not willing to say that JCPOA is dead.

And the picture is much more complicated in the sense that UAE and Saudi Arabia are also talking to Iran. UAE is considering reopening its embassy and the Saudis have been in dialogue with Iran.

So this is not quite the cold war that the president and the Israeli prime minister try to portray in their joint press conference in Jerusalem, but yes, there is a serious Arab-Iranian issue that is still at play in the region.

ZAKARIA: But as you say, when I've heard this from other sources in the Middle East, as well, the real -- the new story is that the Saudis are talking to the Iranians, I think largely through Iraq.

The UAE is talking to Iran. There seems to be an effort to create some kind of new modus vivendi between Iran and Saudi Arabia and other Gulf States to diffuse the tensions. NASR: That's indeed the case. I mean, the president tried to take

credit in his speech in Saudi Arabia that there is now a ceasefire in Yemen.

But that ceasefire actually owes a lot to the Iranian-Saudi dialogue that's been ongoing, and it's very clear that the Arabs want protection against Iraq but they don't want the kind of aggressive policies that, for instance, Israel is following with Iran, that that could risk a war.

I think they've made a decision that the United States is not going to go to war with Iran. The United States is not focused on Ukraine and on China, and one of the ways of managing Iran is actually to lower the temperature with Iran.

This does not mean that peace is in the air but the Saudis and UAE definitely are interested in a less aggressive posture with Iran, and that's very different from the way the Israelis are pushing for a much more aggressive position against Iran where the prime minister of Israel said we should put credible military options on the table against Iran. I don't think Saudi Arabia and the UAE are quite there.

ZAKARIA: And what about the other kind of great global power these days, China? China has been busy -- it buys much of the oil from the Middle East but it has been busy cultivating relations with the same Gulf States, as well, has it not?

NASR: It has. And it's also cultivating relations with Turkey and Iran, as well, and its relationship actually with the Gulf State is of a nature that makes a tight American-Israeli relationship with these countries problematic. In other words, the Chinese are building the telecom infrastructure in UAE. They are embedded now in some military bases and military systems in UAE.

And that makes it very difficult for the United States to sort of think of the Persian Gulf the way it used to be under Bush, Clinton, et cetera, of very sort of pristine American military technology territory.

And so it's not just about Iran in this region, it's about how the United States actually makes sure that these Arab countries don't develop sort of porous borders with China and Russia when it comes to technology and military sets of issues.

ZAKARIA: That's a very complicated new Middle East. I sometimes called a post-American Middle East.

Vali Nasr, pleasure to have you on.

NASR: Thank you.

ZAKARIA: Next on GPS, more on Biden's Middle East push. I will talk to the President Barham Salih of Iraq about Mohammed bin Salman, MBS, Iraq's relationship with Iran, and much more. All when we come back.

(COMMERCIAL BREAK) [10:18:47]

ZAKARIA: President Biden left the Middle East yesterday after his first trip there as president, almost 18 months after he took office. A year ago this month Biden announced the end of the last major American combat mission in the Middle East, in Iraq. So how is Iraq fairing today? And what is America's current relationship with the other major countries of the Middle East?

Who better to ask than Barham Salih, the president of Iraq.

(BEGIN VIDEOTAPE)

ZAKARIA: President Salih, lovely to have you again.

BARHAM SALIH, IRAQI PRESIDENT: Thank you for having me, Fareed.

ZAKARIA: President Biden, going to Saudi Arabia, almost shaking hands with MBS, fist bumping. What it the right thing to do to mend fences?

SALIH: Obviously, Saudi Arabia is a very important country in the Middle East and the United States is also a major global power and this relationship needed to be brought to a better standing and I'm sure this is an opportunity to speak to the issues.

ZAKARIA: You know you're very well-schooled in the ways of the West, the values of the West. A lot of people feel that, you know, MBS, because of the murder of Khashoggi and things like that, that Biden shouldn't have done this, that, you know, it was compromising American human rights.

[10:20:09]

I tend to think he did the right thing. But what do you say to those people?

SALIH: Look, at the end of the day, nations act upon their interest, values remain important and critical, and I'm sure human rights remain a very, very important aspect to any nation that respects itself.

At the end of the day, there is a much, much bigger story that is out there and Saudi Arabia is an important player, and to be fair, the Saudi government at the moment is engaged in a significant program of modernization that needs to be watched closely and need to be appreciated for its implications for the wider neighborhood.

ZAKARIA: Talk about that. So you do think that what MBS is doing --

SALIH: Is quite impressive in terms of the modernization he's bringing about to Saudi Arabia and taking on some of the extremist elements, the tests, essentially being in reign for so many years.

ZAKARIA: Saudi Arabia's foreign policy, though, had been quite active even before MBS, and particularly toward Iraq after the American intervention, the Saudis sort of treated Iraq as if it was an Iranian client state. They were not very welcoming and friendly. Has that changed under MBS?

SALIH: I think Iraq has changed and has been projecting itself and its values to our entire neighborhood. This is not about a zero sum game. Iran is our neighbor. We have vital national interests in developing good relations with Iran.

We do not want to go back to the days of Saddam Hussein where we are at war with our neighbor. We fought eight years, Iraqis were committed to this war and we have to fight it with our blood and our treasure on behalf of others.

We're not going to do that again. By the same token Arabia is an important neighbor of Iraq. It's in our interest to develop Iraq's relations with what I call its Arab death.

Saudi Arabia is an important part of that Arab domain and I hope that Iraq by virtue of geopolitics will really play that role as a balancer in the neighborhood.

We do not want to be a staging ground for offending, threatening the national security of any of our neighbors, but by the same tokens, we do not want them interfere in our affairs. A first sovereign stable Iraq should be the common interest of our neighborhood.

ZAKARIA: Iraq is, at this point given what's happening in Tunisia, the only Arab nation in democracy. Is it a stable democracy?

SALIH: Look, democracy by nature is messy and difficult. Iraq is a nascent democracy. We have had elections about eight, nine months ago. Unfortunately we have not been able to bring it to a closure and establish a new government.

Iraqi political actors have been engaged in all kinds of legal maneuvering through our Supreme Court. It is disappointing that we have not been able to bring it to a closure but we are trying hard.

We're not fighting it in the streets. We're fighting it through the legal parliamentary system that we have, and I very much hope that even though it's precarious, even though it is nascent and it is yet to be deep-rooted but Iraqi democracy has something to offer our neighborhood.

Remember, Iraq was dominated by autocracy and tyranny for decades and a nation out of that experienced, a nation that was experiencing terrorists onslaughts day in, day out for the last 20 years, so committed to at least the parameters of a constitutional democratic process with all the frustrations it poses.

I will take that over dictatorship and tyranny any day.

(END VIDEOTAPE)

ZAKARIA: When we come back, President Biden has been trying to convince Israel and Saudi Arabia that the region would be better off if Iran were back in the nuclear deal. What does President Salih think and how dangerous are the tensions between Iran and Israel? (COMMERCIAL BREAK)

[10:28:52]

ZAKARIA: We are back here on GPS with more of my interview with Iraq's president, Barham Salih, talking about Iran and the rest of the region.

(BEGIN VIDEOTAPE)

ZAKARIA: One of the things that President Biden was trying to do in the trip, I think, was find a way to have a better understanding of what to do about Iran, and I think he was trying to convince him particularly the Israelis and the Saudis that it actually makes sense for Iran to go and the United States to go back into the Iran nuclear deal, put limits on Iran's nuclear program.

Do you think President Biden is right? Should we all be trying to get that deal put back together?

SALIH: Iran is a major, major actor in that part of the world and for me in Iraq, we have long borders with Iran. We have all kinds of interaction, social, cultural, common security interest.

You name it. So obviously this is an issue of consequence to us and is a consequence to the wider region and indeed the world. There is no military solutions to these.

We need a security arrangement in the Middle East where we can come together to combat terrorism which remains a major problem.

Look at where Syria is. Look at northern Syria. Look at the militants that exist and take base in Syria that still pose a real threat to the stability, not just the Middle East but also the wider world.

Compare that to Afghanistan in 2001 where a few men where in remote case of Afghanistan and could manage to pull off that terrible attack on September 11th.

And now we're talking about thousands and thousands of militants, well equipped, well trained in the heartland of the urban Middle East.

It's a danger. We need to bring the neighborhood together as part of a common architecture to push back against these elements but also really attend to the fundamental challenges that the Middle East is facing, jobs, economic challenges that we are faced with, the terrible, terrible climate changes that are affecting the entire neighborhood.

ZAKARIA: But let me translate what I think you're saying which is, yes, we should have a nuclear deal --

SALIH: Yes, of course.

ZAKARIA: -- but it's even more than that. You are talking, I think, about a broader -- SALIH: An integration of our part of the world.

ZAKARIA: And kind of reconciliation between Iran and the Arab.

SALIH: Indeed. Indeed. Absolutely. And by the way, on that count, Iraq is playing a very important role in trying to mediate between the Saudis and the Iranians.

There have been a number of conversations that have taken place in Baghdad between Iran and other Arab neighbors and there are some important atmospherics that have improved.

At the end of the day, we need to sit down at the same table and talk about the problems that are of consequence to our own constituents. At the end of the day, yes, America matters. Yes, the world matters but also our own priorities in our part of the world matter.

ZAKARIA: But this is not where things are, Mr. President.

SALIH: I know.

ZAKARIA: Right now what's happening is Saudi Arabia is making a tacit alliance with Israel. The UAE has effectively made an open alliance and that is more like old containment strategy of two warring camps.

SALIH: I think this is -- again, if you go back to history, this is a recipe of repeating the terrible, terrible tragedies of the past. This part of the world cannot go on like this. We are blessed with having oil but we also have very, very serious challenges, economic and social challenges.

We need infrastructure that can connect our economies together. We need common action against climate change. Iraq cannot do it alone. Saudi Arabia cannot do it alone. Iran cannot do it alone. The Turks cannot do it alone.

Syria, at the end of the day, has to be brought back into the fold. And we need to find a way by which we get Syria out of the mess that it is in today, has been in for so long while we are focused on the headlines of interstate rivalries between Iran, Saudis, this and that. At the end of the day there are really big, big challenges confronting each and every state in that part of the world.

We don't want to go back to the days of the past where we are part of access against another. We did that and we paid dearly for it. We have too many priorities to do that again.

ZAKARIA: Why are you optimistic?

SALIH: Look, I'm a realist. Look, we have many, many challenges and many, many difficulties that life is about trying to make it happen. I do believe that our part of the world has many resources, is blessed and endowed with good natural resources. But above all, also we have good, good people, talented people who deserve a better way of life and they can do it. And you see a lot of developments in our part of the world. Yes, it's messy. Yes, confusing as I was explaining to you about Iraq. I'm not telling you that Iraqi is fantastic. It's absolutely not. Iraqis deserve a lot better than what we have today.

But at the end of the day, the kind of debate that we have in Baghdad about making life better for Iraqis, changing the political system, improving, reforming gives me hope that we can do better and you have to try. We have been blessed with an opportunity and we should not squander it. We have to try it.

ZAKARIA: Mr. President.

SALIH: Thank you, my friend.

(END VIDEOTAPE)

ZAKARIA: Next on GPS, from one of the last big wars to the current one, I will talk to the foreign minister of Finland, Russia's neighbor that is poised to become one of the newest members of NATO.

[10:35:07]

Where does Helsinki see Moscow's hostilities going from here?

(COMMERCIAL BREAK)

ZAKARIA: Twelve days ago representatives from the 30 NATO member countries signed the protocols to expand the alliance to 32 nations. The neophytes of the group will be Finland and Sweden. Those nations were spurred to apply for membership by Russia's invasion of Ukraine. For its part, Finland shares a border with Russia some 800 miles long.

I talked this week with Finland's foreign minister Pekka Haavisto about Russia, NATO and the war in Ukraine.

[10:40:04]

(BEGIN VIDEOTAPE)

ZAKARIA: Mr. Foreign Minister, thank you for joining us.

PEKKA HAAVISTO, FINNISH FOREIGN MINISTER: Thank you.

ZAKARIA: First, let me ask you, is your application for NATO membership now accepted? The Turks did sign a memorandum. Do you think it's on its way?

HAAVISTO: We signed during the Madrid NATO summit, the memorandum of understanding with Turkey, with Sweden, tripartite memorandum, so I think now we are just fulfilling everything that has been agreed on that and it should go on.

And of course, we are in a situation that very rapidly many NATO countries ratified Finnish and Swedish membership applications so we are very pleased of that. ZAKARIA: Meanwhile, what is happening with Russia? Have, you know, Putin reacted very negatively, the president had called him and told him? What has Russia's ongoing reaction been? Has there been one?

HAAVISTO: Russia's reaction mainly has been concentrating that if new weaponry will come to Finland, if in our defense plan something that they feel threatening might appear, then they react and so forth.

But our reading is that they concentrate now very much on Ukraine. And our border 800 miles between Finland and Russia is working normally so there are no any additional tensions between Finland and Russia.

ZAKARIA: What is your sense of what is going on in Russia's invasion of Ukraine? Are they gaining ground? Are they losing too many men? What is your reading?

HAAVISTO: Well, of course, many people say that Russia has a huge resilience. They can produce material. They can send men in this kind of conflict.

They don't easily step back and so forth. So this is, of course, you can expect that this conflict can be a long one and we should prepare for a long conflict.

At the same time, of course, the western powers, U.S., European Union has been strengthening Ukraine quite a lot and sending military material and supporting economically and so forth.

ZAKARIA: Do you think that the European Union will be able to hold firm on the economic sanctions against Russia?

HAAVISTO: I think the European Union economic sanction packages have been working well so far. But of course, then we come to the more sensitive areas, oil -- decision on oil was already so that we are to make some exceptions with Hungary and so forth and, of course, with the gas.

It's quite difficult to make a unified sanction decision. But, of course, it's also true that when the sanctions are established, they come to full force step by step in the sense that they are affecting the Russian economy not only -- at once but step by step. And I think in that sense they are very effective.

ZAKARIA: And you think Europeans will stay? I mean, it's going to be a cold winter. Gas prices are going to be very high. Do you worry that countries like Italy and even Germany will find it very hard to maintain unity?

HAAVISTO: There are countries who are still too dependent on Russian energy, Russian gas particularly. And at the same time, of course, we try to make decisions on green transition in Europe.

We have, for example, in Finland making the LNG decision not using the Russian gas but using the LNG tankers and using the bio plant for LNG. We are also increasing out nuclear capacity and so forth. I think Europe is in the front of very important new energy decisions. ZAKARIA: There are people that say what is going to happen is it's a long war as you say. Russia has been able to maintain and even expand its control, and Putin is waiting.

He's waiting for the gas prices to get higher, for the pain to be felt more deeply. And then at some point, he will offer to negotiate and that the Europeans will then put pressure on President Zelenskyy and say, you got to take this deal because we -- you know, we need you to -- we need this whole thing to end.

HAAVISTO: There was actually in the beginning of the Russian war against Ukraine, this kind of momentum before Bucha and before all these human rights violations that countries like Turkey offered some mediation and table some proposals.

But I think the mood also in Ukraine changed towards very bitter after the last human rights violations by the Russian military. And of course, it's clear that at some moment the war will end but I think it's also very clear that we have to maintain our support to Ukraine as long as needed and it's up to Ukraine then to decide what is the right moment for negotiations.

ZAKARIA: How do you imagine relations with Russia will be going forward in the longer term? Because you have an 800-mile border with this country.

[10:45:00]

It's difficult to see a Russia under Putin being easily reaccepted into the European and, you know, international fold sanctions being completely lifted because they're not going to get out of Crimea. They're not going to get out of certainly some parts of the Donbas. Is Russia now kind of isolated for decades?

HAAVISTO: From the Finnish perspective, everything always Russia with 100 years perspective and we look 100 years backwards. It's a tsar time. It's a Lenin, Stalin, Khrushchev, Brezhnev, Gorbachev, Yeltsin and then Putin. And we see that it has been going back and forth isolation or towards the western model and so forth.

And when we think 100 years in front of us, it might be the same. There are these kinds of moments and Russia is isolated and there will be moments when Russia is more democratic and more open towards the western society.

And, of course, our task is to support those moments and forces also inside Russia who are looking more cooperation with Europe. And there are many young people, young generation and intellectual people in the country who suffer of this current situation.

ZAKARIA: But right now, they seem very much in the minority?

HAAVISTO: Right now, they are probably minority. But of course, the influence of the war, also Russians soldiers are losing lives and get injured and so forth. This effect of the war are coming step by step, of course, to the consciousness of Russian population, as well. ZAKARIA: Mr. Foreign Minister, pleasure to have you on.

HAAVISTO: Thank you, my pleasure.

(END VIDEOTAPE)

ZAKARIA: Next on GPS, there is a staggering $1.7 trillion of student loan debt outstanding in America. There is a lot of talk about what President Biden should and shouldn't do about it. Should he forgive all of it, some of it, none of it? I will give you my thoughts in a moment.

(COMMERCIAL BREAK)

[10:51:10]

ZAKARIA: Now for the last look, as Americans seethe over high prices, it's worth remembering that inflation was at the heart of populism's rise in America, not the populism of Donald Trump or Bernie Sanders but the populism of 1890s, the People's Party or Populist Party.

At the time they weren't complaining about inflation, it was something they desperately wanted.

The U.S., you see, was going through a period of deflation. From 1870 to 1890, prices fell by a cumulative 30 percent or 2 percent a year. That may sound like a good thing in today's environment, but deflation can cause all kinds of problems.

One group negatively impacted, people in debt. Think of a farmer getting fewer dollars for his crops every year but still on the hook for fixed mortgage payments.

This dynamic contributed to the forming of the Populist Party and to one of its central demands that the United States abandon the gold standard and add silver to the money supply.

The idea was to get more money into circulation and drive inflation up. That's good for debtors and bad for creditors.

The populists ultimately found a tribune in Democratic presidential candidate William Jennings Bryan. Bryan railed against the gold standard as a tool of greedy capitalists.

(BEGIN AUDIO CLIP)

WILLIAM JENNINGS BRYAN, 1896 PRESIDENTIAL CANDIDATE: You shall not crucify mankind upon a cross of gold.

(END AUDIO CLIP)

ZAKARIA: Today there is a new interest group calling for debt relief, Americans with student loans. President Biden says he's close to a decision on forgiving their loans.

According to the "Washington Post," the president seems inclined to cancel $10,000 worth of debt per borrower, excluding individuals who make more than $150,000 a year.

Some Democrats like Chuck Schumer and Elizabeth Warren want him to cancel $50,000 for all borrowers which Biden opposes. The most extreme proposal championed, of course, by Bernie Sanders is to eliminate all student debt in the country which amounts to $1.7 trillion.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT): If we can give tax breaks to billionaires, you know what we can do? We can cancel all student debt in this country.

(END VIDEO CLIP)

ZAKARIA: But in a reverse of the 19th century, today's rampant inflation is already giving debt relief to these borrowers. Outstanding student debt after adjusting for inflation is declining. Most student loans have fixed interest rates.

Now, inflation, which means price increases, doesn't directly erase debt but it does indirectly when inflation drives up wages. As people are facing higher prices, they can demand higher wages.

And indeed, as of March, workers earnings were up 4.7 percent from last year, the fastest growth in almost 40 years.

Of course, they are also reckoning with higher everyday costs but most student loan debts remain the same. So this doesn't seem like the time for massive student debt forgiveness.

The policy would also be quite regressive benefitting higher income earners more than lower income Americans. People take out student loans because getting a degree will help them earn more. Granted that doesn't always pan out.

But if Washington is going to embark on more big spending, tax credits for all Americans at lower income levels would make much more sense. Also, forgiving loans would only encourage colleges to keep raising tuition costs, which have risen 2.5 times faster than inflation over the last two decades.

Biden's anticipated student debt plan, which is the least generous one on the table appear to be the most popular one among the public, yet populists on his left flank are calling it grossly inadequate and demanding more.

[10:55:02]

Broad debt forgiveness polls badly. Do Democrats want to embrace the caricature of being the party of over-educated elites who want special favors?

It's worth considering what happened to the Populist Party of the 19th century. Their man William Jennings Bryan lost to William McKinley in the election of 1896. In office, McKinley did the opposite of what the populist wanted. He

strengthened the gold standard. He then defeated Bryan again in the election of 1900. Bryan lost again in 1908, a reminder that populism is not always popular.

Thanks to all of you for being part of my program this week. I will see you next week.

Don't forget, if you miss a show, go to CNN.com/Fareed for a link --

(COMMERCIAL BREAK)