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Fareed Zakaria GPS

Israel Braces for Retaliation from Iran; U.S.-Iran Relations Amid High Mideast Tensions. Interview With Hermitage Capital Management CEO Bill Browder; Interview With Venezuelan Opposition Party Voluntad Popular Co-Founder Leopoldo Lopez. Aired 10-11a ET

Aired August 04, 2024 - 10:00   ET

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

[10:00:40]

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.

(BEGIN VIDEOTAPE)

ZAKARIA: Today on the program. The Middle East on edge. Iran and its axis of resistance are vowing revenge against Israel after the targeted killings of three top Hamas and Hezbollah officials.

How will the axis strike and when? And are hopes of a ceasefire in Gaza now dashed? I'll ask the "New Yorker's" Robin Wright and Vali Nasr of Johns Hopkins.

Also, the biggest prisoner swap since the Cold War. Seven countries were involved and 24 prisoners were delivered across borders including three Americans. I'll talk to Putin critic Bill Browder about who got the better end of the deal.

Then Venezuelan President Nicolas Maduro has claimed victory in last week's elections. But the U.S. says his opponent is the actual winner. We'll sort through the situation with opposition politician Leopoldo Lopez.

(END VIDEOTAPE)

ZAKARIA: But first here's my take. The conventional wisdom about Donald Trump is that he has no coherent policy agenda. He's transactional, impulsive, and narcissistic. The 140 of his former staffers who worked on the Heritage Foundation's Project 2025 discovered this recently when Trump abruptly disavowed the project because it became controversial. But Trump does have an ideological core, and it's one that dates back a long way.

In 1987, when Donald Trump was merely a New York developer, he spent almost $100,000 to take out a full-page ad in "The New York Times." It was an open letter to the American people and its basic message should by now be familiar. It began, for decades Japan and other nations have been taking advantage of the United States.

The thrust of the letter is that the U.S. is crippling itself by spending on the defense of its allies while those allies prosper. His solution make Japan, Saudi Arabia, and others pay America to protect them and impose taxes on these nations by which he means tariffs.

This is the core of Trump's worldview. In this campaign, he has announced that he would impose 10 percent tariffs on all imported goods and 60 percent on those from China. As for America's defense commitments, Trump threatened that he would not defend NATO countries that have not yet paid their bills, by which he means met their defense spending target of 2 percent of GDP. In fact, he said he would encourage the Russians to do whatever the hell they want with these countries if they fall short of their spending commitments.

I've asked business people who support Trump how they could be in favor of an agenda that was so obviously anti-markets, anti-growth, an anti-stability. They reply that it's all bluster, that Trump's bark is always worse than his bite.

But hostility to America's allies and a fascination with protectionism is the constant in Trump's ideology. Trump's dark vision from the 1980s did not pan out. Japan and Europe stagnated, China rose and through it all, the United States stayed remarkably strong, maintaining its share of global GDP at 26 percent from 1990 through to today.

American wages, once very similar to Europe's, are now about 40 percent higher. They're even higher compared with Japan. U.S. average wages are over $77,000. Japan's are around $43,000. Countries like France protected their workers, Japan and Germany practiced industrial policy. But it was America that surged ahead in the information age.

In the 1980s and early 1990s, the Reagan and Clinton administrations tried all kinds of measures to stop Japan's advance. They amounted to costly failures. And Japan missed the information revolution anyway. Undeterred by that record of failure, Trump wants to try it all again, this time with China, which now seems to be entering a period of slower growth itself caused by its own internal mistakes.

[10:05:10]

So far the record has been clear. By Trump's own key measure, the trade deficit, which he always talks about, the tariffs against China, which have been extended by President Biden, have failed. Since the imposition of the tariffs that trade deficit has expanded rather than contracting. Many studies have shown that these measures have cost the American consumers tens of billions of dollars and have not altered China's policies.

A study by the Peterson Institute concludes that Trump's new tariffs would cost American consumers $500 billion annually. In other words, they would stoke inflation.

Trump's is an ideological view, which facts and evidence can do little to dissuade. He insists, for example, that the tariffs are not paid by Americans, but rather by China and other nations. It's worth pointing out that if that were the case, if Trump is right, the American revolution was a big mistake. Recall that the colonists were enraged by the imposition of tariffs by the British on imported goods.

If only the colonists knew that they were not paying those taxes, they might not have rebelled against British rule. No, even with 18th century economics, they knew that they were paying the taxes.

There's a broader point to make here. The United States did something truly revolutionary after World War II. It understood that by underwriting international stability and helping other nations get rich, it would create a zone of peace and prosperity in which it would thrive. That vision of enlightened self-interest has been at the heart of America's engagement with the world for almost eight decades now.

Donald Trump and J.D. Vance utterly reject it, choosing instead a dark, narrow, and selfish vision. One that would turn its back on one of America's greatest and most enduring achievements.

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

After the assassination of three leaders of Hamas and Hezbollah, the Middle East is on edge. The most stunning attack killed is Ismail Haniyeh, the leader of the political wing of Hamas and the chief Hamas negotiator for a ceasefire. Haniyeh was killed in Tehran. He was there for the inauguration of Iran's new president. Israel has not taken responsibility for Haniyeh's death, but it has for the others. Iran, Hamas and Hezbollah have all vowed revenge for the deaths.

Now, many countries are encouraging their citizens to leave Lebanon. Airlines are canceling flights and the U.S. is sending a carrier group and a fighter squadron to the region.

Joining me now is Robin Wright, "New Yorker" writer and fellow at the Wilson Center, and Vali Nasr, professor at Johns Hopkins School of Advanced International Studies.

Vali, let me begin with you and ask you, what does this look like to Iran? Because this has been a pretty aggressive set of moves by Israel.

VALI NASR, PROFESSOR, JOHNS HOPKINS UNIVERSITY: You're exactly right. I mean, this was seen by them as a deliberate provocation to precipitate a conflict that would ultimately probably bring in the United States into a direct confrontation with Iran. So they saw that in once Israel by killing Haniyeh killed off the ceasefire deal, which means that the Gaza war will go on.

And it also decided to carry out the assassination in Tehran. And during the inauguration of an Iranian president, the new Iranian president, which meant that it deliberately wanted to humiliate Iran and also the Iranians saw this essentially as an attack on that inauguration itself. So it's put Iran in a very difficult position of needing to both retaliate, but also to establish deterrence against Israel. And at the same time also not react in a way that would play exactly

into what they think Israel wants, which is a larger conflict.

ZAKARIA: Robin, does Israel want a larger conflict? It does seem, you know, like it's -- it doesn't suggest that they're searching for some kind of stability here. They're punching back hard.

ROBIN WRIGHT, CONTRIBUTING WRITER AND COLUMNIST, NEW YORKER: Prime Minister Netanyahu has made clear that he intends to eliminate Hamas as a political entity and as a military threat. And since January the head of Mossad, David Barnea, has said repeatedly that Israel will go after the major Hamas leaders as it has been doing steadily. And this of course does undermine peace, particularly when you eliminate the chief negotiator with the international community.

[10:10:05]

There are very few winners out of this escalation. Hamas wins because it's always wanted the -- its campaign against Israel to engage or produce a wider war across the region. And that's where it looks like we're headed. And Bibi Netanyahu also distracts the Israeli population from his own political woes and problems in court. So there's a real danger here that you have two sides that for either military or political reasons are now likely to engage in a much wider conflict which is dangerous most of all because it brings -- merges the 10 different conflicts playing out in the Middle East into one big one. And that's really hard for the United States as the chief broker to try to unravel.

ZAKARIA: Vali, the last Iranian counterattack to a punch from Israel was that very elaborate, 300 odd missiles and drones which the United States and Saudi Arabia and the UAE all help thwart off but mainly the United States. Do you think the Iranians will do something like that? Because I kind of wonder about that. It didn't really -- it was a great show, but nobody in Israel died. Was it effective? Will they do something like that again?

NASR: Well, clearly it was not effective if Israel felt emboldened to carry out another provocative attack inside Iran. Last time around Iran and the United States engaged intensively during that two-week period between the Israeli attack in Damascus and the Iranian retaliation, and then the Israeli retaliation in order to manage and calibrate the Iranian response. This was all done through third parties.

And all Iranians have not seen that. Obviously the United States, much like last time, either didn't know or can't contain Israel's impulse to escalate. And it doesn't have a say in restraining Israel. And so the United States -- whatever deterrence existed in Iranian attack last time in getting Washington much more engaged in managing Israel hasn't worked.

What Iranians are now saying is that they clearly have to do something much more effective against Israel in order to achieve what they didn't achieve last time, which is to make Israel think twice before it escalates and to really assume that there's a cost to do that -- to the kind of action they took in Iran.

What that might look like is I think is being debated between Iran, Hezbollah, the Houthis, and others, and is also subject of discussion behind the scenes with the United States. For instance, today the Jordanian foreign minister went to Iran with a specific message from both the king of Jordan and from the United States, which suggests that this is being discussed even between the United States and Iran.

ZAKARIA: Robin, very quickly, you've lived in Lebanon for five years. How dangerous do you think this situation is? Could you imagine Israel trying to invade Lebanon and reoccupied part of it as it did in the 1980s?

WRIGHT: Well, that would be a very dangerous move for Israel because it learned during the 18-year occupation from 1982 to 2000 that it couldn't beat Hezbollah and had engaged in what was in 2006 its most difficult war, in which first one that Israel did not win. There's a problem militarily. But I think Vali is right, that there will be a multi-pronged operation, that this is very different from what happened in April, on that you'll see activity on multiple fronts.

And because of Iran's missile arsenal, because of what Hezbollah has, they have reached what's known as overmatch, the inability of Israel to intercept or prevent all of those drones and missiles from hitting Israel. And the United States will have a critical role in being there militarily to intercept. Remember it played a huge role in intercepting more than 80 drones and six ballistic missiles in April.

Israel will have to have the United States military on its side in order to prevent serious damage if Israel attacks -- Iran attacks.

ZAKARIA: Well, stay with us. We will talk about exactly that. And also, what the United States' Iran policy should be when we come back.

(COMMERCIAL BREAK)

[10:18:53]

ZAKARIA: And we're talking about rising tensions in the Middle East with Robin Wright and Vali Nasr.

Robin, it seems to me that the Biden administration is trying to tamp down this crisis, has seemed to signal to Bibi Netanyahu that it would not or want to see more aggressive actions would not back if Bibi, if he did something, but he has so far called Biden's bluff on a lot of this stuff. Expanded the one Gaza when Biden has put down some red lines. Do you think that, A, Biden is really trying to restrain him and B, will Bibi listen, especially to a president who is no longer even running for reelection?

WRIGHT: Fareed, I think President Biden has sent strong messages, some even in public, to Bibi about restraining his military operations, whether it's in Gaza or in the wider Middle East. I don't think Prime Minister Netanyahu is listening. He has his very own agenda, both political and personal. The great danger for the Biden administration is that as time is

running out and there had been talks twice this year in Oman between Iranian and U.S. officials indirectly conducted by Oman diplomat shuttling between the two delegations.

[10:20:12]

So there are some indication that the Biden administration is interested in trying to de-escalate the issue of both regional tensions, Iran strikes and its -- what its allies are doing across the region, as well as tensions with Israel. Unfortunately, the nuclear deal, the terms of the nuclear deal are almost obsolete and it's kind of starting from scratch.

The timing of the death of Haniyeh was particularly difficult because it came on the day that the new president, Masoud Pezeshkian, was inaugurated, and that forced his hand, a man who had been talking about easing relations with the outside world, So for the Biden administration dealing with the tensions, the multi -- the very diverse and disparate players is increasingly difficult as the focus in the United States shifts to our own domestic agenda.

ZAKARIA: Vali, how does this play in Iran? Because you had a very interesting article in "Foreign Affairs" where you were talking about -- with a coauthor, where you're talking about how this election of a new precedent in Iran really signals that the Iranians are trying a new approach. What do you mean?

NASR: Well, there is a reformist who won the presidential elections in Iran. He ran on a campaign that he wants to reduce sanctions pressure on Iran, which means ultimately following up on what Robin mentioned those conversations in Oman continuing until there's some kind of an agreement around issues that United States has with their own nuclear regional, et cetera, in exchange for lifting sanctions.

But the problem here is that the Israeli policy and particularly these escalations vis-a-vis Iran do not create the right environment for that. In fact, going after Haniyeh on the day of the inauguration of this president who wants to start negotiations with the United States essentially makes it extremely difficult. And the onus is, in some ways the view of Tehran is that the onus is on the United States to show that it can restrain Israel and prevent it from turning the conversation away from potential and possible negotiation to war.

I mean, right now, this president was inaugurated. You would have said that this might create -- might have created some kind of momentum for preliminary conversations and instead, we're talking about a potential war between the United States and Iran as American warships are going to Iran and we may end up being in a very different place. So in a way, the United States is actually chasing Israeli policy rather than making its own policy with Iran.

ZAKARIA: Robin, how likely do you think it is that -- you mentioned there are 10 different simmering conflicts going on in the Middle East and they're all sort of coming together how possible is it that this time, you know, despite the fact that the Iranians don't want a war, despite the fact the Americans don't want a war, most of these players don't want a full out war. We could actually stumble into one.

WRIGHT: Absolutely. And that's the real danger and the real tragedy and irony. But when you look at what's been playing out over the past month with the Houthis firing a drone that hit Tel Aviv, with the kind of resumption of attacks on U.S. forces who are based in Syria and Iraq for a totally different reason. They're there to try to contain ISIS and the resurgence of ISIS.

What Hassan Nasrallah, the head of Hezbollah, said, just this week when he threatened that this war is entering a whole new phase. And I think, you know, the guns of August is taking on a whole new meaning. And I think the question is, is anybody willing to step back? We saw when the U.S. assassinated Soleimani, Iran responded with missiles on U.S. forces. But at the same time sent messages to Washington. We want know no escalation in April, again, with the strikes by Israel on Iranian generals in Syria, and then the Iranian response on Israel.

There was a sense that that was, you know, it was a tit-for-tat and no further. The question is whether this will end in a tit-for-tat exchange. Retaliation by Iran for Haniyeh's death and by Hezbollah for the death of its commander in Beirut, or will this continue to unravel at a time when there's no diplomacy and no one's really talking much about Gaza. So we're not even dealing with the basic issue that generated this horrendous challenge.

ZAKARIA: Robin Wright, Vali Nasr, thank you both so much. Very insightful.

Next on GPS, we will take a closer look at Thursday's historic prisoner swap. What's next for the West with its relations with Russia? I will ask the financier and longtime anti-Kremlin activist sir William Browder.

[10:25:06]

(COMMERCIAL BREAK)

ZAKARIA: On Thursday, the world witnessed the largest prisoner swap between the Western Russia since the Cold War. Russian British journalist Vladimir Kara-Murza was one of those freed after being sentenced to 25 years in prison for criticizing the war on Ukraine.

My next guest is close friend of Kara-Muza. William Bradow was once the top foreign investor in Russia. That was until 2005 when he was barred from the country after exposing government corruption. Since then, Browder has been one of the Kremlin's fiercest critics. He is now sir William Browder.

Welcome, Bill. Am I supposed to call you Sir Bill or what?

BILL BROWDER, AUTHOR, "FREEZING ORDER": So, you're an old friend. You can call me whatever you want.

ZAKARIA: Tell me what you make of this deal. It seems like the Biden administration pulled off something very complex and basically did a good job. Would you agree?

BROWDER: I think it's a phenomenal job. It was an act of diplomatic genius for them to be able to get out the three Americans, my friend Vladimir, a number of other Russian opposition politicians and others.

It required seven different countries. It's almost unimaginable. All the different places this deal could have fallen apart, but they were able to pull it off. And most importantly, I would say that President Biden and his team saved the life of Vladimir Kara-Murza.

He was dying in detention. If you look at pictures of him today, he looks like a concentration camp victim. He lost a third of his body weight.

It was unbelievable what they were doing to him in the Siberian prison. And he would have gone the same way as Alexei Navalny had he not been released.

ZAKARIA: And you have personal experience of this because your lawyer, who helped expose that government corruption, was similarly jailed. And then in an absolutely harrowing series of months died of malnutrition, of beatings, of torture.

BROWDER: Yes. Sergei Magnitsky was my lawyer in Russia. He uncovered a massive Russian government corruption scheme. He exposed it in retaliation. He was arrested by the same officials he exposed, tortured for 358 days in pretrial detention, and killed at the age of 37 on November 16, 2009. And that's what launched my campaign for Justice for Sergei.

Vladimir Kara-Murza, who was just released joined me in that campaign. We got 35 countries to pass what's called the Magnitsky Act, which freezes assets of Russian human rights violators, and then Vladimir was targeted.

And so, it's a long string of heartbreak and tragedy that has led us to today, but we can really celebrate that Vladimir is safe. He's free. He's alive, and so are Evan Gershkovich, Paul Whelan, and all the others. It really is a magnificent moment, you know, something to really celebrate in a world where a lot of terrible things are happening. This is one of these moments when we can real just smile and feel good about ourselves for a day or two.

ZAKARIA: But let me then ask you about a broader question, Bill, which is you know the financial world very well. You're still a very successful investor. Why is it that the sanctions against Russia do not seem to have blunted some of Putin's ambitions? Part of it, I assume is that we do still let himself sell oil and natural gas, which is inevitable because otherwise it would -- oil prices will go to 200 and trigger a recession.

But what's your perspective on the sanctions against Russia? Are they really proving ineffective and if so, why?

BROWDER: Well, first of all, I should say that Putin wants us to believe the sanctions are not hurting him. He is out there talking real tough as if everything is fine.

Everything is not fine. We've frozen more than $300 billion of Russian central bank reserves in the West. We've frozen most of the oligarchs' money in the West. Russian companies, government agencies, have all been blocked from the financial markets. They can't transfer money. A thousand plus companies have left Russia.

It's a really painful, difficult, awful situation for Putin. But as you mentioned, there is one enormous truck size loophole in this whole sanction's regime, and that is, that while we're doing all this other stuff, we said we don't want to touch oil. And Russia sells between half a billion and a $1 billion a day in hard currency oil. And that money, that hard currency they're using to buy missiles from North Korea, drones from Iran. And they're using it to pay soldiers to go into battle.

And so, we had this terrible dilemma, which is on one side we, the United States, Europe, everyone else, is somehow getting money to Russia to pay to kill Ukrainians. And then on the other side, we're having to give money to the Ukrainians to fight back. And as you say, if we -- if we ban the sale of oil altogether the oil price would go up and we have another inflation crisis.

And so, we're stuck between a rock and a hard place because as long as Putin has the money from oil he's going to continue to conduct this war. And that's a very big dilemma.

ZAKARIA: Do you -- at the end of the day, we only have 30 seconds. Do you think the West should just keep the pressure on?

BROWDER: Absolutely. We have only one choice. If Putin wins in Ukraine, he moves on to the other countries of Europe and the Baltics, and then we have a much bigger fight on our hand.

[10:35:06]

This is a cheap way to give the Ukrainians what they need to fight off the Russian so we don't have to.

ZAKARIA: Sir William Browder, thank you very much. As always, a pleasure.

BROWDER: Thank you.

ZAKARIA: Next on GPS, Venezuela's President Maduro says he won last week. The U.S. says his opponent was the real victor. We'll make sense of it all when we come back.

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[10:40:09]

ZAKARIA: Last Sunday, Venezuela held presidential elections. The election was considered by many the most consequential in years as incumbent President Nicolas Maduro has led the country down a path of increasing authoritarianism, repression, and economic ruin over the last decade.

Before the results had even been formally released Maduro declared a decisive victory, a move that most observers have called blatant election fraud. Since then, thousands have taken to the streets to dispute the contested results. Many countries around the globe have called into question the results including the United States, which has formally recognized Maduro's opponent opposition leader Edmundo Gonzalez as the winner.

My next guest has dedicated his career to fighting for freedom and democracy in Venezuela. Leopoldo Lopez is an opposition leader who spent more than three years in prison for leading protests against Maduro. He escaped the country in 2020 and has been living in exile in Spain ever since.

Leopoldo, welcome. Pleasure to have you. Your own story as itself fascinating because you ran for president, disqualified. So, you know the mechanics here. What I'm puzzled by, help the world understand incredible opinion polls. The opposition was leading by 40 points against Maduro and yet Maduro claims to have one. How did they manage election fraud on this scale?

LEOPOLDO LOPEZ, CO-FOUNDER, VENEZUELAN OPPOSITION PARTY VOLUNTAD POPULAR: So, thank you, Fareed. So, as you say, all of the opinion polls going to the elections were showing that there's going to be a landslide, 70-30. The energy of the election in the street also was talking that there was going to be a massive, massive park participation in favor of Edmundo Gonzalez.

The exit polls of the day of the election all showed that it was 70- 30. But most importantly, all of the printouts from every single one of the 16,000 voting centers spoke, and it's printed, and then results are there 70-30 in favor of Edmundo Gonzalez.

What Maduro did was to basically read out a different result and is trying to impose a massive fraud on the Venezuelan people's will.

ZAKARIA: So, when you look at the situation now how likely is it that they will be able to tamp down on this? Because Maduro has in the past used brutal amount of repression, including against you and your party and your movement. Will they be able to do that again? The army seems solidly behind him.

LOPEZ: Well, that's what Maduro actually threatened before the election. He threatened to have a bloodbath and a civil conflict and that's what he is doing.

There has been a massive arrest, thousands of people arrested. People that were participating in the voting process as observers, local observers were being arrested. But Maduro is now naked in front of the country and in front of the world.

One thing is to think that we were a majority. A different reality is to know, massively know in every single state, every single municipality of Venezuela Edmundo Gonzalez won and Maduro is a minority. He only has one thing, as you said. He has the military. He has the power to repress the Venezuelan people, to persecute, repress, torture, and incarcerate.

What I believe that the will to fight of the Venezuelan people and the leadership of Edmundo Gonzalez and Maria Corina Machado is very strong. To take this opportunity and make it the true transition to democracy as we all hope.

ZAKARIA: What do you think the US's role should be here? It has tried everything. It has tried sanctions against Venezuela. I wonder whether that is the right approach because it is impoverishing people in Venezuela and Maduro seems still in charge. What would you advocate the U.S. do?

LOPEZ: Well, just a brief comment on sanctions. Many people presume that sanctions were rejected by the Venezuelan people. And if that was the case, that was the narrative of Maduro, and what we have seen is a massive support for change rather than people believing that narrative.

I believe sanctions are important. The United States lifted sanctions in the context of the Barbados Agreement. Maduro did not comply to the Barbados Agreement. So now the United States will need to decide what is it going to do with general sanctions.

But then you have individual sanctions. It sanctions to those individuals who committed the fraud. Individuals who are committing today as we speak violations of human rights.

[10:45:00]

I believe that those individuals should be sanctioned by the U.S., by the E.U., and make it clear that there is no impunity to the crimes they are committing at the eyes of the world and the Venezuelan people.

ZAKARIA: Leopoldo, when you look at your country over these last -- over this last decade it must be heartbreaking because Venezuela was the richest country in Latin America. I remember in the 70s and 80s, you know, people from all over Latin America used to go to Venezuela to work, to get good jobs. And now you have 7.5 million people or something like that have fled Venezuela. It's a little bit more have fled Syria.

Is it now a kind of failed state? What is going on inside the country?

LOPEZ: Well, Venezuela has experienced one of the most incredible destructions of the economy. Over the past 10 years the economy collapsed to almost 80 percent. That's unheard of. There is no record to a similar case. That in itself lead to a massive complex humanitarian crisis that in itself lead to, as you said, massive exodus over the past 10 years, more than 8 million people have left our country. And experts in migration claimed that if Maduro stays in power there will be millions of people wanting to leave the country. So, I believe that the best migration policy towards Venezuela is a transfer to democracy. That's the only thing that will keep Venezuelans in Venezuela, and that will take thousands, hundreds of thousands of Venezuelans to return to our country.

But as I said before, we are optimistic because that's what we Venezuelans want. We want to be a free nation. We want to be a nation of opportunities, a nation of prosperity. And we know that the only way is to get rid of the dictatorship through the vote, as we did, and start a new era of democracy, rule of law, and free and fair elections in Venezuela.

ZAKARIA: Leopoldo Lopez, thank you. Terrific. Stay safe.

Next on GPS, both consumers and companies seem to be hitting the brakes on electric cars. I'll tell you why when we come back.

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[10:52:01]

ZAKARIA: Now for the last look. Electric cars have hit a speed bump. After a lightning, fast rise their market share in the U.S. has stagnated this year. Companies from Ford, to GM, to Tesla are scaling back plans for electric car production as sales have disappointed.

The revolution will still be electrified just a little more slowly. Consumers are flocking to hybrids and companies are racing to roll out new models. Most hybrids run on a gas engine and an electric battery that work in tandem. Much of the efficiency comes from capturing the energy that is normally wasted when you hit the brakes and using it to charge the battery. There's also a growing class of plug-in hybrids which act as fully electric cars until the battery runs out and then a gas engine kicks in.

Hybrids aren't as efficient as all electric cars, but their success shows that customers do want to go green and they do want to save money on gas. Many just aren't ready to adopt such a new technology as fully electric cars.

The biggest factor discouraging people is, of course, cost according to a recent AP-UChicago poll. Over time, consumers can save on gas and maintenance, but there is a higher upfront cost in buying the car that many can't afford. Subsidies from President Biden's Inflation Reduction Act do help. But because one of the act's goals was to reduce dependence on Chinese made materials only a limited number of models qualify for the tax credits. Even with those electric cars with 300 miles of range still take five to 10 years just to break even on savings according to a study from January.

The cost isn't the only problem. Another big problem is chargers. The number of public chargers nationwide has doubled since President Biden took office from 95,000 to 190,000. But they are unevenly distributed. Many also don't work.

Six to 22 percent are estimated to be out of service at any one time. The Biden administration secured over $7 billion to install charges and the bipartisan infrastructure law of 2021.

Based on initial bids that could fund something like 60,000 chargers. But nearly three years after the law passed, the program is proceeding at a bureaucratic pace. Only 61 charges have been completed so far.

Everyone got all excited about electric cars and they are the future, but perhaps government and industry should have leaned into hybrids more, which are a bridge to electric. There is a danger to having pushed electric cars too quickly. A new McKinsey survey found 46 percent of American electric car owners are likely to switch back to a gas-powered car far more than in European countries.

[10:55:00]

The government could have also done more to support smaller electric vehicles that are cheaper, more efficient, and easier to charge. Things like e-bikes, which nearly got included for subsidies in the IRA.

Industrial policy is difficult. The government wants to push the market in a certain direction, but it bumps up against consumer preferences and facts on the ground.

Policymakers have to weigh different priorities and pull off complex tasks. They have to move quickly, which is not the government's forte.

There's no question public investment and cleaner transportation is a good idea. But the private sector and individuals are still going to drive this transition and they seem to be pumping the brakes on electric cars.

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

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