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Fareed Zakaria GPS

MAGA Shaken by Epstein Scandal It Helped Stir; Fears of A.I. Bubble Loom Over the Economy. Interview With Former Venezuelan Trade And Industry Minister Moises Naim; Interview With Author Salman Rushdie. Aired 10-11a ET

Aired November 23, 2025 - 10:00   ET

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

[10:00:35]

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 from New York.

(BEGIN VIDEOTAPE)

ZAKARIA: Today on the program, Donald Trump rode to office partially on the back of conspiracy theories. And for years, his MAGA base has fixated on conspiracies to do with Jeffrey Epstein. But what happens if new disclosures show ever closer ties between the president and the pedophile? Will it shake MAGA's faith in Trump?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The whole thing is a hoax.

ZAKARIA: I'll talk to the "Atlantic's" Adrienne LaFrance.

And American markets are wobbling from their lofty heights as fears of an A.I. bubble persist. I'll ask the "FT's" Ruchir Sharma if this is the beginning of the crash.

Also Venezuela. Trump has reportedly signed off on CIA plans for covert action there as he prepares for potential overt action on land. The largest U.S. aircraft carrier arrived a week ago in the region. What can we expect next? I'll ask Moises Naim, that country's former trade minister.

(END VIDEOTAPE)

ZAKARIA: But first, here's "My Take."

Donald Trump has a new Ukraine policy. It's the same as his old Ukraine policy. Force Kyiv to make more concessions and hope that Putin will be satisfied, take the deal, and set the stage for Trump to get the Nobel Prize.

It hasn't worked before and it won't work now. Worse, it comes at a moment of critical vulnerability for Ukraine. Reports from the field suggest that the fighting has intensified. The metrics are worsening and without action, Ukraine could soon suffer a military defeat that will give Russia an important symbolic victory and perhaps more. Pokrovsk, an industrial and rail hub in eastern Ukraine, is teetering.

For months, Ukraine has held on against relentless Russian pressure, but now Russian troops are close to encircling the area, leaving about a 10-kilometer corridor through which Ukraine can supply what remains of its defense.

President Volodymyr Zelenskyy recently said Russian forces in the sector outnumber the Ukrainians eight to one. The Ukrainian Defense Ministry has said that over 300 Russian troops have infiltrated the city, and Moscow is trying to seed sabotage teams to create chaos from within.

Pokrovsk would be the largest urban area to fall in more than two years. And this is not simply about one city. For much of the war, Pokrovsk has been a central node for Ukrainian logistics, close to Ukraine's linked urban fortresses. Ukraine has shifted its supply networks, some to account for this. But the city's collapse could still endanger the entire defensive line in Donetsk.

Moscow's progress stems less from tactical brilliance than from political will and sheer endurance. Russian budget data suggests about 29,000 people signed military contracts per month from January to September 2025, according to the Institute for the Study of War. Ukrainian estimates show Russia has been losing roughly 35,000 soldiers a month over the same period.

In other words, Moscow is losing more troops than it recruits. Yet using increasingly lucrative pay packages, it is replacing its losses fast enough to sustain the campaign.

Ukraine cannot replicate that mercenary strategy. Over 110,000 AWOL cases were registered in the first seven months of this year alone. In some battalions, commanders say they have fewer than 10 combat effective infantrymen. Ukraine mobilizes around 30,000 people per month, yet only a third are fit to fight.

Zelenskyy claims the army is one million strong. To switch out exhausted units a Ukrainian military analyst says Zelenskyy should have three times more.

Exhaustion is now a strategic threat. Many soldiers spend 100 to 200 days on the front line, with almost no rotation, according to Le Monde, as drone saturated skies make relief and movement nearly impossible.

[10:05:09]

What is causing, or at least massively compounding this crisis, is the collapse of external support. The United States has effectively halted direct, largescale military aid. Some deliveries have resumed, but mainly when paid for by European or other partners and key systems, long range missiles, Patriot batteries, precision guided rockets, often are stalled in procurement bottlenecks or held back over stockpile concerns.

Europe promised to fill the gap. It has fallen short. The E.U. pledged in 2023 to send one million artillery shells within a year. It missed the deadline. Ammunition supplies lag behind battlefield needs. Ukraine remains critically short of the long range systems required to strike deep into Russian territory, particularly to hit oil infrastructure, the lifeblood of Russia's war economy.

Washington has allowed Ukraine access to only some of the weapons that would make such attacks truly consequential. Money is also running out, the IMF says Ukraine will need at least $65 billion in external financing through 2027, assuming major hostilities end by late 2026, an increasingly unlikely scenario. According to "The Economist," this year's war burden alone amounts to $100 billion to $110 billion, or about half of Ukraine's GDP.

Yet the E.U. remains divided on how to provide the necessary support. Belgium has blocked the E.U.'s use of frozen Russian sovereign assets, worried about legal risks and potential retaliation from Moscow. To put it bluntly, Russian threats have produced European appeasement.

The Trump team is asking Ukraine to make additional land concessions that Putin has demanded Ukrainians overwhelmingly reject such concessions, and the country's constitution forbids altering territory without a referendum. Were Russia to get these concessions, it might well decide to hold out for even more control over Ukraine, turning it into a client state like Belarus.

Russia's strategy has always been to outlast the West, believing that the U.S. and Europe would tire of this conflict. That belief is being reinforced not by Moscow's victories, but by the West's internal divisions and dysfunctions. Without a course correction, America may soon preside over the first negotiated defeat of a modern democracy at the hands of an aggressive autocracy in the heart of Europe, an area that American presidents have declared as vital to its national interests for 80 years.

And incidentally, the Nobel Peace Prize is awarded for peace, not surrender.

Go to FareedZakaria.com for link to my "Washington Post" column this week, and let's get started.

No modern American president has leaned into conspiracy theories more than President Donald Trump. He has pushed conspiracies about President Obama's birthplace, alleged that the 2020 election was stolen, promoted the idea of a deep state, and on and on.

Trump's embrace of conspiracies is a key part of his appeal among the conspiracist wing of his base. MAGA world has long been obsessed with conspiracies relating to the late sex trafficker Jeffrey Epstein, and now Trump's relationship with Epstein has also become an obsession.

Could it rupture MAGA's unwavering trust in Donald Trump?

Joining me now to discuss is the executive editor of the "Atlantic," Adrienne LaFrance.

Adrienne, tell us first. You know, we understand why people believe in conspiracy theories. They feel powerless. They look up. They see, you know, this sort of distant centers of power. I once read a good piece that said, you know, Americans have had this ever since the colonists used to sit there wondering about what was going on in London that was determining their fate. But it does seem to be more prevalent on the right.

You know, you think of the McCarthy era. You think about the John Birch society. You know, there's so much of that was based on the idea that there was this great conspiracy, you know, there were communist traitors in the government.

Is there something on the right, in your view, that makes it more enamored of conspiracy theories?

ADRIENNE LAFRANCE, EXECUTIVE DIRECTOR, THE ATLANTIC: So this is such an interesting question because I understand why it seems that way. But when you talk to people who study conspiracism and have followed conspiracy theories and those who follow them most closely, what they'll tell you is that it's really not ideologically determined, at least not in the way that you would think in terms of right versus left or red versus blue, whatever.

[10:10:14]

But more that the sort of conditions societally that make conspiracy theories flourish met with a sort of predisposition that you mentioned, a feeling of powerlessness or even sort of like people who are more anti-establishment generally tend to be more prone to conspiracy theorizing. And so in recent years, that has largely been the right.

The really interesting dynamic, however, is that you now have conspiracists who are part of the establishment. And so, you know, you mentioned President Trump, of course, or you look at someone like Robert Kennedy Jr., who is famously a conspiracy theorist now in a position of great power.

And so I think the key change is that the Republican leadership is defined by many people who are conspiracy theorists or were conspiracy theorists before they came to power.

ZAKARIA: So what I'm struck by, picking up on that is, you know, Trump and RFK Jr. both promulgated the idea that there were great conspiracies about or suggested or hinted about JFK's death, about RFK's death. Even about Martin Luther King, and said, oh, you know, we'll release the files and you'll see. Well, they have released the files, and there was nothing.

Has the MAGA base noticed that, you know, that all these files have been released and turned out there wasn't some second or third shooter? There wasn't -- you know, that the people who claimed these conspiracy theories existed came into government, released the files and nothing?

LAFRANCE: Right. Well, I think -- so I think partly, like your question to whether the MAGA base has noticed, I think yes, to some extent. One complicating factor is, and this is explained sort of the power of a conspiracy theory in the first place, is that we know it's true that the government does not always tell the truth, and that Americans and citizens don't always get the full story. And there really are cover ups and there really are conspiracies in some cases.

And so I think the Epstein case in particular is a useful example because it's this very murky, you know, there really was terrible, you know, abuses of power and a lot of what people see in sort of some of the tranche of e-mails that was recently released, for instance, easily backs up this notion that, wow, all these powerful people are getting together and doing terrible things. So the larger narrative that Trump and others have advanced seems to be in some ways validated by some of the Epstein story as it's coming out.

Obviously, the complicating factor for him is the question of his role in it and his relationship with Epstein. And so I think the MAGA base has noticed and is sort of dividing along lines of, well, wait a minute, this seems hypocritical, or wait a minute, why aren't you telling us the full story when you promised us to versus the very steady base that he has that tends to come to his defense no matter what?

ZAKARIA: Yes, I agree with that. That in the Epstein case, there are genuine, at the very least, puzzles. You know, why were these very rich people paying him these crazy amounts of money? What was, you know, what does he have on them? Why did he get such a light sentence the first time around from Acosta? Why was he allowed to commit suicide when he was on a suicide watch?

Do you think that this has sort of genuinely cracked the base of support or unless there is some big smoking gun, this will -- Trump will be able to bounce back as he has from every previous scandal?

LAFRANCE: I mean, I think it's the key question. And if we were to speculate based on sort of empirically looking at history, I think you could easily come to what might be a more cynical view of, well, he has bounced back from literally everything, including January 6th. Why would this be an exception? So I think that would be a reasonable way to speculate.

I also think that it is a real question, as you're looking at the reaction among his base and just the sort of staying power of this conspiracy turned conspiracy theory turned meme like this, the whole Epstein saga is sort of -- is one of the rare stories that feels even bigger than anything Trump can otherwise do to sort of capture people's attention.

And so, you know, I think there is this question of whether he's ultimately able to, you know, win people back or distract them or clear his name in some way or not.

ZAKARIA: Adrienne LaFrance, pleasure to have you on.

LAFRANCE: Thanks for having me.

ZAKARIA: Next on GPS, stocks wobbled from their high highs this week. I'll talk to Ruchir Sharma about fears of bubbles and of a crash, when we come back.

(COMMERCIAL BREAK)

[10:19:21]

ZAKARIA: America's stock market boom has shown signs of flagging as investors worry about an A.I. bubble. Companies like Meta have poured money into artificial intelligence, leading to concerns that these companies may be overvalued.

Are we headed for a stock market crash? And what would that mean for ordinary people?

Joining me now is Ruchir Sharma. He's the chairman of Rockefeller International and the author of the recent and very intelligent book, "What Went Wrong with Capitalism?"

Ruchir, welcome. As always, with you, we love to have charts. And so the first one we're looking at is this is the gold standard of stock valuation produced by the Nobel Prize-winning economist Robert Shiller. And tell us what you see when you look at this chart.

[10:20:09]

RUCHIR SHARMA, CONTRIBUTING EDITOR, FINANCIAL TIMES: Well, Fareed, I think the first thing is how do we define a bubble? And the way that I do it is that there are four O's of a bubble. One is that typically, like in a bubble, you end up getting overvaluation. So this is what this graph shows that if you look at historically the stock market valuation today is very expensive.

ZAKARIA: What it shows, the graph shows, is that the only times these valuations have been this high have been 1929, just before the crash of '29, and 1999 before the crash of the dotcom bubble. Right?

SHARMA: Yes. So in terms of we have definitely overvaluation. So that's the one big O. The other three big O's that we will speak about, one is overinvestment. They're typically in bubbles. What you find is that people invest a lot of money in just one theme. So today if you look at the amount of money going into A.I., the tech spend. As a share of the economy today, that's already comparable to what you saw at the peak in the 2000 internet boom and also other big bubbles.

ZAKARIA: You point out there's another graph where you look at the contribution of tech investment to U.S. GDP growth. And just in 2024, that number is well under 5 percent. It's now close to 40 percent, right?

SHARMA: Yes. So this is another significant difference in almost a bad way compared to '99, 2000. At that point in time, the buildup in investment was much more gradual. This time there's such an arms race on to be the leading player in A.I. that the acceleration that you have seen in investment in A.I. has been huge. And so therefore even some of the big companies that at one point in time used to be flushed with cash, like Meta or Amazon. These companies now are issuing debt for the first time in a long

while. So meta has gone from having a net cash position to now being one of the big issuers of debt just to finance the A.I. boom. So this is the other big change which is taking place. And so just coming back, you know, like as I said, that -- so we're seeing signs of overvaluation. We are seeing signs of overinvestment.

Plus we are seeing -- also seeing signs now of leverage, over leverage, which is starting to show up in the marketplace as well. And then the other point, which is, you know, there about a bubble, which is also what we show here in a graph that if you look at the bubble today, the amount that people have exposure towards the equity market, the over ownership, the photo is very high, that this is now higher than what it used to be back in 2000, that today the average American household has more than half of their financial wealth in stocks.

ZAKARIA: And this is, again, this chart where you see the only time it got to that point was 1999, 2000.

SHARMA: Yes. And we are in fact higher than that point now. Now, of course, as we know with, there's no signs as to when this bubble is going to come to an end. And my point has been that it's very hard to know that because typically what bursts a bubble? What bursts a bubble is when people run out of money to invest in this frantic way. Right? And so I think that what's happened now is that currently we are seeing some signs of that, you know, because people are issuing much more debt.

But usually the catalyst is when the U.S. Federal Reserve decides to increase interest rates, and that typically bursts bubbles. So you refer to 1929, 1999. That was the one common factor behind those bubbles bursting. And so that's the one thing which gives a lot of the optimists some hope still.

ZAKARIA: Right.

SHARMA: That this bubble can inflate further because the Fed is still keen to cut interest rates. Prodded partly by the White House. But in general it's keen to cut interest rates.

ZAKARIA: But will that not just create a bigger crash when it happens?

SHARMA: Absolutely. So, I mean, and that's the reason why we're seeing this wobble as well in the last few weeks. Why has this happened all of a sudden in the last month? All it has taken is for the U.S. Federal Reserve to say they may not cut interest rates in December. That's been the catalyst for why we are seeing this wobble take place in the equity market.

Now, if by any chance, next year, let's say inflation goes up and the Fed is forced to increase interest rates, then I think that what you could be staring at is a big, big downturn. But until that happens, everyone says the party is still on, the music is still running and we got to keep dancing.

ZAKARIA: That gets me to the final chart you have, which is percentage of people comfortable with this new technology. So in 1995, in the midst of dotcom boom, it was 72 percent. We don't have a number for it in 1999. I bet you would be even higher at that point.

SHARMA: Right.

ZAKARIA: Because that was a period of great optimism about America, technology, globalization, democracy. Now, that number is 31 percent are comfortable with this technology. What does that tell you?

[10:25:06]

SHARMA: Well, I think that this tells me that this is the most hated bubble in history because usually what bubbles do is that they lead to a lot of irrational exuberance. Right? People are really excited. People are really happy. And for those of us who lived through the late 1990s, you remember that. It's a period of incredible optimism. The difference this time is that people are really scared about what A.I. may bring, because even the techno optimists who are embracing A.I., they are telling us that we're going to take your job away.

And if you don't know how to use A.I., you're going to be in big trouble. So that's the fear that A.I. has brought. So if and when this A.I. bubble does burst, I think you'll have very mixed emotions. At one level, I think people will just be a bit relieved. On the other hand, because of the amount of exposure that the American economy has and the average household has to the equity market, that's going to be painful.

ZAKARIA: Yes. And if it unwinds, I think it will have a big effect because the pessimism is already there and more pessimism means less spending and less economic activity.

Ruchir Sharma, pleasure to have you on as always.

SHARMA: Thanks. Fareed.

ZAKARIA: Next on GPS, will President Trump's standoff with Venezuela come to a head? I'll talk to a former top Venezuelan official when we come back.

(COMMERCIAL BREAK)

[10:30:45]

ZAKARIA: This week, the U.S. moved its largest aircraft carrier into the Caribbean, marking the latest escalation by the Trump administration in its standoff with Venezuelan President Nicolas Maduro. The last several months have seen a massive buildup of American military might in the region as the U.S. carries out strikes on boats allegedly transporting drugs.

Trump also recently authorized the CIA to take covert action in Venezuela and refuses to rule out the possibility of a ground invasion. The White House insists that the goal is to stem the drug trade, but many observers believe the real aim is to facilitate regime change. Joining me now to discuss is Moises Naim, the former minister of trade for Venezuela, former executive director of the World Bank, former editor of Foreign Policy. He has a new book out that is terrific, "Charlatans: How Grifters, Swindlers, and Hucksters Bamboozle the Media, the Markets, and the Masses."

Moises, welcome. Do you think the Trump administration is actually trying regime change in Venezuela?

MOISES NAIM, FORMER VENEZUELAN TRADE AND INDUSTRY MINISTER: Absolutely, yes. They're using and sticking to the point of this is an anti-narcotics effort. But in fact, the hope for them, I think, would be regime change and take Maduro out of power, which I think is a -- is a positive thing.

ZAKARIA: Now, the steal behind this regime is the army. And as somebody who served in the Venezuelan government, obviously, and in a democratic setup, what is your sense of -- is the army on Maduro's side? Could it -- could it agree to some kind of transfer of power?

NAIM: That is the expectation but it's unclear. You know, they have a very carefully monitored army. If you are not an enthusiastic supporter of the regime, bad things start happening to you, even if you're a general.

So yes, the army is in favor of Maduro as far as we know, but that has not been tested. That's a proposition that has not been tested. And it has also -- it needs to be emphasized that there are many other players in the game here. The Colombian guerrillas, all kinds of fragments of that are operating in the country and are an important part of it.

The narco traffickers, the cartels, the Mexican cartels, the Colombians, they're all there. So, the army -- the Venezuelan military has to reckon with all that panoply of interests and capabilities and armed possibilities.

ZAKARIA: So that's sounding, Moises, like a -- like a pretty complicated and treacherous place to attempt regime change. Because let's say you do it and Maria Machado comes into power will not -- won't there be elements of the old regime, elements of the military, all these various drug cartels? It'll turn into a kind of fairly bloody free for all. At least that seems -- that would be my fear.

NAIM: It is going to be very difficult. It's not going to be a straight line. It's going to have its ups and downs. It's going to be very difficult to manage. Even the -- manage the opposition is going to be very tough for -- whoever is in government. But the alternative is horrible.

So, doing nothing will just make -- mean that Maduro when -- with a victory in his hands. So, something will have to have because Trump has invested too much of his own brand on sustaining what is the largest deployment of the U.S. armada since 1965 in Latin America.

ZAKARIA: Moises Naim, pleasure to have you on. NAIM: Thanks for having me, Fareed.

ZAKARIA: Next on GPS, I'll talk to the acclaimed writer Salman Rushdie about the brutal attack against him in 2022 and the attacks on freedom of speech in America in a moment.

(COMMERCIAL BREAK)

[10:39:38]

ZAKARIA: Salman Rushdie is among the most celebrated and controversial writers in the world. His most famous work, "The Satanic Verses," published in 1988, ignited global controversy over its depiction of the Prophet Muhammad and Islam. Rushdie became the subject of death threats and assassination attempts, most notably, Iran's supreme leader issued a fatwa calling for the writer's death, forcing Rushdie into hiding for years.

[10:40:04]

In 2022, Salman Rushdie was brutally stabbed while on stage in upstate New York, leaving him blind in one eye and without the use of one hand. The prosecutor in the case says the assailant was acting on the fatwa. Rushdie has a new book out, "The Eleventh Hour," his first work of fiction since the attack.

(BEGIN VIDEOTAPE)

ZAKARIA: Welcome, Salman. Pleasure to see you.

SALMAN RUSHDIE, AUTHOR, "THE ELEVENTH HOUR": Very nice to see you.

ZAKARIA: So, how did you decide to go from, you know, writing about this life-threatening experience you had to going back to something very sweet like a collection of short stories?

RUSHDIE: I couldn't wait. That's the real truth. I mean, I think the moment I finished the memoir, I mean, actually even before it came out, I was just anxious to get back to what I think of as my real job. You know?

I mean, the reason I became a writer was to make things up. And it was very nice to get back to doing it.

ZAKARIA: So, one of the things that you have done, other than being a celebrated novelist, is you have had to embroil yourself in this whole question of free speech and censorship because of, you know, the way in which your book was -- "Satanic Verses" was not just banned, but your life was threatened. And then ultimately you paid this horrible price for it.

What do you think about what's going on in America today with it? Because, you know, on the one side you had the left, which was canceling people for what they wrote. And now you have on the right the government, you know, deporting people for things they are saying. RUSHDIE: No, I mean, I think it's very worrying that the -- that the attack comes from so many directions, you know? I think PEN America recently had released a report saying that right now in the United States, there's 23,000 active book bans. And those are not just any old books. Those are "To Kill A Mockingbird." You know, Toni Morrison's "Beloved," "Huckleberry Finn."

And those books are getting taken out of school libraries, et cetera, will affect the way in which children learn to think, you know? So, it's very worrying. And yes, you know, the fact that people can't take a joke anymore. So, late night comedians are a problem for the administration. It's very worrying because on the other hand, you do have a kind of leftist progressive feeling that it's OK to suppress certain kinds of speech that they disapprove of.

ZAKARIA: That nobody should be offended.

RUSHDIE: Yes, that offense is a sufficient reason, you know? And actually, it isn't. You know, there is no right not to be offended, but there is a right in this country to speak your mind, you know?

So, I mean, I just of the very old school opinion here that, you know, the defense of free expression begins when somebody says something you don't like. That's when you discover if you believe in free speech or not.

ZAKARIA: Right. It's easy to defend the stuff you agree with.

RUSHDIE: Yes. Or that you're indifferent to. That is when somebody says something you don't like, then you discover if you're willing to defend it. You know, in the -- as Voltaire probably never said, you know.

ZAKARIA: Disagree with every word you say, but I defend to death your right to say it.

RUSHDIE: Yes. I don't think he actually said it, but it's the kind of thing he would have said.

ZAKARIA: What are your thoughts on Mamdani and the fact that he has been openly and proudly proclaiming that he's Muslim --

RUSHDIE: I mean, you know, he has the right to do that. I mean, I think he ran a very good campaign. You know, I think he was lucky in his opponent because nobody -- actually, nobody liked Cuomo at all and that helped him, I think, especially when Cuomo was endorsed by Trump and so on. You know, all of that played into Mamdani's campaign. So, I think he's earned his shot.

ZAKARIA: Do you think there is widespread Islamophobia in the United States?

RUSHDIE: I don't know. I don't think so, you know? I mean, I think there's some. You know, there's some of everything.

There's some anti-Semitism. There's some -- there's some Islamophobia. There's some prejudice against liberals. There's -- there's all sorts of -- you know, it's a time of very strong and sometimes very unpleasant opinions.

ZAKARIA: So, for somebody like you who has taught so much and written so much about some of these kinds of issues, when you write fiction, does that inform it, or is that like a different part of your brain making up these stories?

RUSHDIE: You know, I live in the world like you do, you know? And I've always thought that my art is a response to the world that I live in. So yes, it gets in somewhere.

But what I don't -- what I don't like, as a reader what I don't like, is didactic writing. I don't want to be told what to think, you know?

[10:45:01]

I don't want the story to preach at me, you know? What I think the best thing you can do as a writer is to ask interesting questions, and sometimes ask difficult questions, and just to create a literary world that the reader wants to be in.

And in that world, you can entertain them. You can -- but you can also challenge them. And that's how literature works, you know? I have no desire to be -- well, I have no desire to be a politician.

ZAKARIA: And are you trying to mostly entertain or mostly bring insight, shed light?

RUSHDIE: I can't rank those. I think both of them. I think if you don't entertain, you're not doing anything because people won't read -- won't turn the page. But books have to be about things, you know? And the more they're about, the more interesting they are to read.

ZAKARIA: Well, you are always interesting to read. Salman Rushdie, pleasure to have you on.

RUSHDIE: Thank you.

(END VIDEOTAPE)

ZAKARIA: Next on GPS, Denmark has long been seen as a model nation, one of the world's happiest countries, if not the happiest, with a generous welfare state. So, why and how did it become a model of a very different kind as a country with some of the toughest immigration laws in Europe? I'll explain when we come back.

(COMMERCIAL BREAK)

[10:51:00]

ZAKARIA: And now for the last look. Across Europe, far-right populists are flourishing. In Hungary and Italy, they are in government. While in the U.K., France, and Germany, they are leading in the polls. One country on the continent stands out as a glaring exception, Denmark. While many left-wing parties across the continent have weakened or collapsed, Denmark center-left social democrats have held power for more than six years. One of the party's greatest strengths is a relentlessly strict focus on an issue often considered a traditional weakness of liberals, immigration.

To understand how this happened, let's go back to 2015. This was when, amid the Syrian civil war and other conflicts, more than a million migrants arrived on the continent's shores. But the mass arrivals overwhelmed a post-World War II refugee system originally designed for far fewer numbers of people. The resulting crisis irrevocably reshaped Europe's politics.

Denmark, a country with little history of large-scale immigration, responded with a much tougher approach than most countries. It made refugee status temporary. And in 2016, a controversial so-called jewelry law allowed police to seize valuables from asylum seekers worth more than $1,500 as payment toward their stay.

But strikingly, when center-left leader Mette Frederiksen won power in 2019, she doubled down and pledged to reduce the number of asylum seekers to zero. Her government tightened family reunification rules. It also rehoused people living in what it called parallel societies, enclaves of mostly non-western residents. Denmark also instituted different policies for different peoples, warmly welcoming Ukrainians fleeing Russia's invasion while moving to make the legal status of Syrian refugees less secure.

The results of these policies have been dramatic. Asylum applications in the country have fallen to a 40-year low. Polling shows that Danes are far happier about their government's approach to immigration than many other Europeans, including Swedes, Brits, Germans, and the French. This happiness about the country's hardline stance on immigration has been a resounding political success.

Frederiksen's party remains by far the country's most popular one, despite losing ground in recent regional elections. Most notably, her stance has attracted working class support and largely staved off the far-right populist threat of the Danish People's Party, which backs the deportation of thousands of legal immigrants.

So, why would a center-left government in one of the world's happiest welfare states impose some of Europe's strictest immigration rules? In a "New York Times" interview earlier this year. Frederiksen argued that her tough migration laws are to protect progressive ideals. Rapid, low skilled migration, she says, disproportionately hurts Denmark's poorest by straining their access to benefits, housing and schools.

As Mattias Tesfaye, one of the key ministers behind the policies and the son of an Ethiopian refugee himself, put it to "The Economist," the social democratic welfare state can only survive if we have migration under control.

And crucially, in everything other than immigration, the Danish Social Democrats have stayed true to their roots, funding generous public services like health care and child care, and maintaining strong worker protections. Now, other European countries are looking to emulate the Danish model. The U.K.'s ruling Labour Party now cites Denmark as inspiration for its new, tougher asylum laws as it looks to fend off a very serious challenge from its far-right. The broader lesson for left of center parties in the west is uncomfortable, but unavoidable.

[10:55:04]

More than 20 years ago, the author David Goodhart defined the problem in an influential essay for "Prospect" magazine. He wrote that there is a, quote, "dilemma for progressives who want plenty of both solidarity, high social cohesion and generous welfare paid out of a progressive tax system, and diversity, equal respect for a wide range of people, values and ways of life."

In that trade off, Denmark's liberals appear to have chosen solidarity. And the hard truth for many western liberals is this, many people do not see their nation purely as a set of laws and institutions, but instead as a bundle of emotions, identities and shared values. Ignoring or dismissing these feelings will only make voters turn to the populist of the right, who will then handle the issue with even greater severity, indeed, cruelty.

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

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