Return to Transcripts main page
In the Arena
Continuing Investigation of Trump's Real Net Worth; Senator McCain Goes to Libya
Aired April 22, 2011 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELIOT SPITZER, CNN ANCHOR: Good evening. I'm Eliot Spitzer. Welcome to the program.
In a moment, more of our continuing coverage of that Donald Trump deposition we told you about last night, but first, the big questions we plan on digging into tonight.
The Obama administration may not call it a war, but our deepening involvement in Libya signals otherwise. Now we're sending in drones. What exactly is our mission there?
Plus, new polls show Americans have a dismal view of how we're doing and where we're headed. What does it mean for the president and, more importantly, for your wallets?
Will Cain is joining me tonight for that.
And the Robin Hood approach. Should the rich be forced to serve the poor? One popular leader wants to make it the law of the land. I'll have more on that as well.
But now to tonight's top story. Our continuing investigation of Donald Trump's net worth.
Last night we delved into this. Sworn testimony given by Trump in a deposition we managed to get our hands on. It comes from a case brought by Trump against Tim O'Brien, author of the book "Trump Nation."
Tim O'Brien claimed that Trump's net worth was only -- I say only -- $150 million to $250 million and that made Donald Trump angry.
One thing is abundantly clear from the case. Trump's statements, especially his financial statements, often appear quite different from an objective view of the facts. To recap, here's just one example as we discussed last night.
In 2005, Trump said he was worth $3.5 billion. North Fork Bank looked at his financials and said no, only $1.2 billion. And Deutsche Bank said no, $788 million.
Now these kinds of discrepancies come up over and over again in this deposition. Why? Let's let Trump himself answer that one. When the lawyer asks Trump, have you ever lied in public statements about your properties, Trump says he tries to be truthful, but, quote, "I'm no different from a politician running for office. You don't want to say negative things."
Then the lawyer asks him, have you ever exaggerated in statements about your properties? His response, "I think everyone does."
I'm not so sure about that. Full disclosure here, my family's in the real estate business in New York, and I know Donald. I respect him and even kind of like the bravado he brings to everything that he does, but that doesn't justify not being straight.
Now let's bring in Jeffrey Toobin, CNN's top legal analyst, to continue drilling down on some of these other examples that we found. You know they just keep popping up.
Simple legal question, Jeff, I don't want to put you on the spot as a real estate maven. Is there a difference between ownership and a license agreement?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Yes. They're two different things. I mean just to put it simply. If I own a piece of property and I'm going to build a building there, I can pay Donald Trump $1 million or $2 million to call it Trump Plaza, and I can do that.
That means I have a licensing agreement with him, but I own the building. That's the difference.
SPITZER: It doesn't give him an ownership interest in your property.
TOOBIN: No. He can't tell me whether I can sell it, what I can build on it. The contract is simply use of his name, some sort of service for a fee.
SPITZER: OK. You get an A-plus in real estate law.
TOOBIN: Thank you very much.
SPITZER: At least for now. And I will tell you Donald Trump agrees with you. You get two points for that.
Here's the deposition and here's the question. There's a difference between a project you own and a project you're licensing. And he says yes. All right. But here's the problem. He sent a letter because there had been a dispute about whether or not he owned or licensed a particular property in Waikiki, Hawaii.
He sent a letter to "The Wall Street Journal" which he said my tower in Waikiki was 100 percent sold out with $729 million in sales in less than five hours, a record. "This building is largely owned by me."
Well, here's the problem. He doesn't own it. And in fact, in the deposition he acknowledged that. He said -- you know, he acknowledged it was just a licensed agreement, and what I like about his defense is he says the licensed agreement was so good it was kind of like ownership.
Does that make any sense to you?
TOOBIN: No. That makes no sense. Period.
(CROSSTALK)
TOOBIN: It doesn't matter if he's going to make a lot of money through the licensing agreement, which he well may.
A licensing agreement is simply a different thing under the law and under common sense from ownership.
SPITZER: Now as you point out, you can make money on licensing and he's done very well. He has a lot of license agreements, all those -- not all, many of the buildings that you walk by in Manhattan and around the world with his name on them, it's license agreement just like the one you described.
TOOBIN: That's right. And he licensed his name for all sorts of things. You can buy Trump clothes, you -- I think there was some sort of booze that you could buy that had Trump's name on it. All of which is perfectly legal. It may be profitable but it doesn't mean you own there.
SPITZER: And so you can't go around saying you own something if all you have is a license.
Let's go to another one. Here on the west side of Manhattan there's a big project that has been developed over the past 10 or so years, many, many buildings, a boulevard, Trump Boulevard or Trump --
TOOBIN: Riverside Boulevard. The Trump Development along the Hudson River. Yes.
SPITZER: That's right. And I think his name on the street, too, but maybe not.
Include it in your balance sheet if it is, Donald.
But all the buildings certainly have his name on it, and the question is, does he own 30 percent of it or does he own 50 percent of it. And I just want to -- you know, and what's the reality? You've looked at this deposition.
TOOBIN: Thirty percent.
SPITZER: Thirty percent. And the problem is, he was going around saying he owned how much?
TOOBIN: Fifty.
SPITZER: Thirty doesn't equal 50?
TOOBIN: No, 30 is different from 50. SPITZER: But he had a clever answer to this one. He says, I owned 30 percent, but of the fact I put no money up, that 30 percent is equated to 50 percent. Does that make sense to you?
TOOBIN: No, it doesn't. I mean the great thing about this deposition, we both read the whole thing is that he not only says black is white, but he has explanations about why black is white that are frequently very funny, but they always seem to be heartfelt.
SPITZER: OK. Now we have something surprising right now. We have a phone call coming in right now from Donald Trump.
Donald, can you hear us?
DONALD TRUMP, ENTREPRENEUR: Yes, I can.
SPITZER: Well, thank you for calling in. Thank you for joining us. I gather -- I know from a call earlier in the day you're not happy with the critique that we've made of the deposition. As I said to you when we spoke, I'll give you fair chance to respond. Fire away. Take your best shot.
TRUMP: Well, I don't think that -- I didn't see the piece, but I heard one or two people called me up -- not too many, but one or two people called me up and they said it was a very unfair piece.
First of all, I'm a private company, you know nothing about what I own and what I don't own, Eliot. And in all due respect, I think you'd be the first to admit that. You don't know where I come from or what I -- what I own, although I did -- I was a fan of yours, and I was a little bit surprised to see that you would do a negative piece.
But being a private company you really have no idea what I own and it's very substantial. Now should I decide to run -- and by the way, among my best years have been the last two or three years, should I decide to run, you'll see all of that because as you know I have very, very detailed Federal Disclosure forms that I have to fill out, and I think people would be surprised to see what the numbers are. They are very, very substantial.
SPITZER: Look, Donald, just so it is clear. I have made it very clear on this show. In fact, I just added a few moments ago, you may not have been able to hear it. I'm a fan of yours. I love the bravado. I think all of that is wonderful. The issue here, and I also agree as a private entity and a private company you do not have the obligation to make the disclosures that a public company does.
And therefore there's a certain lack of knowledge that all of us bring to this conversation which is why the only thing we've used here is the deposition.
Tell me if I'm right about this. You made certain presentations to banks in a certain point of time, Deutsche Bank and North Fork. You said you had a net worth of $3.5 billion. They came back with very significantly lower numbers. TRUMP: No. But as you probably know they were only looking at certain assets. This was for a building that I was building, and they didn't need to have $3.5 billion. They just needed to have a certain net worth.
SPITZER: That's right.
TRUMP: Anything -- and not even a net worth. Just assets of a certain amount in order to --
SPITZER: But Donald, you would agree --
TRUMP: -- for a building. Excuse me, Eliot, let me talk.
SPITZER: Absolutely. So what they did is this was just a percentage. They just took a basic percentage. It had to be over 750 in order to do the loan. This wasn't a net worth of 750. This was a statement that it had to be over 750 in order to do a loan and that's very well documented by Deutsche Bank.
SPITZER: But you would acknowledge that looking at the same materials that you presented to them they came in with a net worth that was significantly lower than what you had initially stated.
TRUMP: That's not right, Eliot.
SPITZER: No, wait, wait.
(CROSSTALK)
SPITZER: Donald, it was sufficient for the loan --
TRUMP: Well, in excess of $750 million.
SPITZER: Right.
TRUMP: In other words, it had to get up to $750 million in order to make a loan. This is many years ago, just so you understand.
SPITZER: OK.
TRUMP: So I'm going back many years.
SPITZER: OK.
TRUMP: Many, many years.
SPITZER: Can we --
TRUMP: But we had to have a net worth over a certain amount in order to do a loan.
SPITZER: OK.
TRUMP: Now, once that amount was hit it didn't make any difference because you didn't need any more than that, so all they wanted to do was to make sure it was more than the $700 or $750 million. That wasn't a net worth. That was just to be over a certain limit.
SPITZER: Right. But your initial signed statement to them was $3.5, they came in at $1.2 instead of --
TRUMP: Let me just -- no, that's not right. Let me just tell you something.
SPITZER: Right. I'm listening.
TRUMP: My net worth, you may very well see and very accurately because of federal forms --
SPITZER: OK.
TRUMP: You're going to see in very great deal. I have built a great company.
SPITZER: No doubt about that.
TRUMP: I have built a company that is -- and I think you sort of know that because you're involved in real estate in New York. I have built a great company. I have built a company that has very little debt, has a lot of cash and I have among the best locations anywhere in the United States. I have great property.
SPITZER: Donald --
TRUMP: If I decide to run, and I may surprise you by my decision.
SPITZER: Right.
TRUMP: You will see filed, not 90 days later when that I'm expected to do it, but the day that I decide to run, you will see a large number of papers that add up to a certain number and on that paper and on that cover paper will be the amount of cash I have, what banks the cash is in and also what net worth there is, approximately.
SPITZER: Donald, just so it's clear --
TRUMP: And it will be very simple. And you're wasting a lot of time on your show and to be honest, you know, you'll find out, very likely, you'll find out -- hopefully you will find out because this country is in such bad shape that somebody has to do something as quickly as possible.
SPITZER: We'll get to that --
TRUMP: So hopefully you'll find out in a very short number of weeks.
SPITZER: We'll get to that in just a moment.
TRUMP: What the number is. SPITZER: We'll get to that in just a moment. Here's the question I have for you. What is your net worth? Why don't you tell us right now?
TRUMP: I will save it but I will tell you this.
SPITZER: You're going to say your net worth or you're going to save your statement?
TRUMP: My net worth -- excuse me, Eliot. Excuse me. My net worth according to "Forbes" is $2.7 billion?
SPITZER: Right.
TRUMP: I will tell you this, it is substantially in excess of that. When I say substantially, much, much more. They don't have access to my books, they don't have access to my records.
TOOBIN: It's Jeff Toobin.
SPITZER: Jeff has a question for you.
TOOBIN: Let me ask you a question about the Hawaii project, in Waikiki that we raised earlier in the program today. He said that -- you said you own it. In interviews and in letters you said you own it. In fact, in the deposition you said well, I have a license. It's a licensing agreement but it's really a good licensing agreement.
Isn't there a difference between owning something --
TRUMP: You're talking about Hawaii? I really don't know if it's an ownership position or license. I have so many jobs that I wouldn't know that. I can tell you this, it's a very successful job, it's a beautiful job.
TOOBIN: I don't doubt that for a second that you're very successful but --
TRUMP: And it's -- and it's --
(CROSSTALK)
TRUMP: Excuse me, Jeffrey.
TOOBIN: I'm sorry.
TRUMP: It's up, it's open, it's doing very well and people are very happy. As to whether or not it's a licensing deal or an ownership deal, I have many, many deals all over the world. I'd have to really check that, I don't know.
SPITZER: Donald, we've got to take a quick break. You know this. You have a TV show somewhere, don't you?
TRUMP: I do. I certainly do.
SPITZER: And we need to take a quick break. Can you stay with us and hang on the phone for a minute?
TRUMP: Yes. Go ahead.
SPITZER: All right. Donald, thanks for hanging in there. We'll be right back.
(COMMERCIAL BREAK)
SPITZER: All right. We're back with Donald Trump. We've got an economic crisis. One of the issues is -- does relate to our deficit. Tell us what your answer is to closing that budget deficit. Are you going raise taxes on the rich which is something you used to believe in or are you going to say --
TRUMP: Well, I don't want to go 100 percent with you right now because it's evolving in my own mind and I'm really developing a plan that I think is very good, and I think I'd make this country very, very rich again because we certainly aren't rich.
But I will tell you this. What we need to really get rid of the deficit is jobs.
SPITZER: Right.
TRUMP: And I think you would agree with that.
SPITZER: We've just been talking about that.
TRUMP: The greatest killer of the deficit is a roaring, beautiful economy.
SPITZER: Yes.
TRUMP: And when you have jobs being outsourced to India and many, many other countries all over the world, and you have credit card companies where the people are mostly working in India and other places instead of working in Iowa and Alabama and New York, and places that we want them to work, that's a problem.
When you have China this year --
SPITZER: OK. Donald -- Donald --
TRUMP: -- is going to make over $300 billion --
SPITZER: Can I interrupt for one second?
(CROSSTALK)
TRUMP: -- against our country, it's also taking a lot of our jobs because they're making all of our products or a lot of our products.
I mean, Eliot, you know real estate.
SPITZER: Listen. TRUMP: When I order curtain walls and when I'm building buildings I'm getting a lot of those curtain walls and a lot of those products from China. And I often ask my people, do we make anything in this country? I don't want to buy from China.
SPITZER: OK. But there's the question. Donald.
TRUMP: But because of the manipulation of their currency, they've tremendously effective in taking over jobs that we used to have in this country so --
SPITZER: Let me interrupt for one second.
TRUMP: What I would do --
(CROSSTALK)
SPITZER: Yes.
TRUMP: When the country roaring again -- when the country roars again, Eliot, all of this and all of these discussions about cutting Medicare which is a disaster, and I won't be part of it, cutting Medicare, cutting Medicaid, doing all of the things that everybody is talking about, frankly, on both sides of the aisle, there'll be much less likely to happen.
SPITZER: OK, but, Donald --
TRUMP: The main way that we can solve this problem --
SPITZER: Yes.
TRUMP: -- is to get the country moving again.
SPITZER: We all agree on that.
TRUMP: And I think you'd agree with that.
SPITZER: Of course, we agree on that, but I hate to diminish what you just said. You said it passionately, you said it very nicely. But you stated the problem, you didn't give us the answer.
We all take as the baseline premise, of course, we need more jobs. The question is how do you get those jobs in? Whether it's designing the dry wall that you make, that you need to build a building or the iron and the steel that you need if you're building a commercial tower that's going up taller?
All of that has been imported in the last 20 years. How do you bring those jobs back? Are you based on -- I want to ask you this question. Based on what you just said about China and their manipulation of their currency which is estimated to be between 30, 40 percent.
Are you going to slap a 40 percent tariff on everything coming in from China? TRUMP: If they don't change their ways I would do it without hesitation.
SPITZER: OK. And when that totally disrupt -- you know, look.
TRUMP: No, you know what's going to happen, Eliot? In my opinion, you're a good negotiator, what's going to happen, most likely they'll come to the table when they really believe you're going to do it. I can't believe that we haven't done it.
SPITZER: Right.
TRUMP: But when they really believe -- you know a lot of times when you're negotiating, the other side has to believe it. When they really believe it, and with me -- believe me, they'd believe it.
SPITZER: They'll believe you.
TRUMP: I've made a lot of money with the Chinese and that will be revealed at some point in the future.
SPITZER: Right.
TRUMP: But I've made a lot of money dealing with the Chinese. I did a very -- I do very good deals.
SPITZER: OK. But look --
TRUMP: I've had great success with the Chinese. When they believe that you mean that you're going to put anywhere from a 25 to a 40 percent tax on because of their manipulation of the currency.
SPITZER: OK.
TRUMP: You know what's going to happen, Eliot? They're going to start lifting. In fact, they already have.
(CROSSTALK)
SPITZER: They moved in on -- Donald, hold on one second.
TRUMP: They're lifting their currency for the first time in years.
SPITZER: Hold on. Hold on one second.
TRUMP: In the "Wall Street Journal," they're starting to lift their currency a bit. I think I should get credit because I'm the only one harping on this, and I think I should be given credit for that.
SPITZER: I apologize for being -- for laughing. I've got one -- I have two questions for you. One of them, and I just got to ask this. Have you ever lost a negotiation?
TRUMP: I've had good deals and I've had great deals, and I've had OK deals, but I haven't done too badly.
SPITZER: All right. All right. We'll leave -- let's talk Libya for a moment. Should we be using drones in Libya? Should we be there at all? What is our game plan there? What would your game plan be?
TRUMP: Very, very poorly handled. The president doesn't know our game plan. Nobody know what the game plan should be, extremely complex, because the rebels, you know, it's like from "Gone with the Wind," it sounds beautiful, the name is so beautiful. But I'm hearing they come from Iran. I'm hearing they're al Qaeda. I hear all sorts of bad things, like worse than Gadhafi.
If he should have gone in, if he wanted to do it for humanitarian reasons he should have gone in immediately because tens of thousands of people have now been killed. My attitude, and it sounds a little bit cold, but I think it makes sense, if we're going to go into Libya, we take the oil. It's very simple.
SPITZER: So --
TRUMP: If we're going to go into Libya, we take the oil.
And I ask you one other question. China gets a lot of its oil from Libya. We get none of our oil from Libya. If that's the case, why isn't China involved? Why are we doing Libya and everything else? China is spending billions of dollars a day on buying the rest of the world. We're spending billions of dollars -- billions and billions of dollars on policing the world.
SPITZER: Donald --
TRUMP: Why isn't China involved, Eliot? I ask you that question where --
(CROSSTALK)
TRUMP: China is getting their oil.
SPITZER: One more question.
TRUMP: A lot of their oil from Libya. And yet we're fighting --
SPITZER: Not such a big percentage. A little than that.
TRUMP: And our president has no idea. At one point he says we have nothing to do with the regime change and then the next day he says we want to get rid of Gadhafi.
SPITZER: OK. OK. Now that we're there --
TRUMP: I mean he truly doesn't know what he's doing.
SPITZER: Now that we're there, January 20 of 2013, you're sworn in as president. If we still have troops or we are still doing what we're doing currently in Libya, whether there are troops or not of course remains to be seen, do you say we are done or do you say we escalate to make sure Gadhafi is gone within 24 hours?
TRUMP: Well, I can tell you this. If at that date we are where we are right now they have done one pathetic job, and I'll make the decision at the time. I certainly won't make it right now, Eliot.
SPITZER: All right. All right. Donald Trump, thanks so much for calling in. Let us know --
TRUMP: Thank you. Thank you very much.
SPITZER: We want an exclusive on that press conference you're going to have.
TRUMP: OK. I'll let you know. It will be some time prior to June.
SPITZER: All right. Donald, thanks so much for being with us.
TRUMP: Have a good time.
SPITZER: Thanks. You, too.
All right. So what do you make of that?
TOOBIN: Well, I mean, you know, he's a very charismatic guy. He's a very good talker but -- I mean, you know, the economy --
SPITZER: Did he persuade you about ownership and licensing?
TOOBIN: Not terribly. And remember, I mean politics ain't bean bag, as they say. And you know this deposition is gold for opposition researchers. You know we're journalists. We have an obligation to tell both sides of the story.
Political commercials, they don't have to tell both sides of the story. They can just use stuff like this and call him a liar and he doesn't really have a very good answer.
SPITZER: There's another element to that. Put all these issues aside and obviously we've been focusing on them and I guess we still will, and certainly his opposition will, as you point out, Jeffrey, he didn't have an answer to the fundamental questions.
He articulates the problem. We can all do that. The question the public wants is what is your answer, how are you going to get jobs, how are you going to get the unemployment rate down. What are you going to do on taxes? We didn't have time to get into it wit him. Be interesting to see if get --
TOOBIN: And he's got to answer that. And when you run for president you've got to say what your plans are.
SPITZER: All right. Jeff Toobin, thanks so much for being with us.
For more of our coverage on Donald Trump's net worth, go to our blog, CNN.com/inthearena.
Coming up, are we in too deep in Libya? Senator John McCain sure doesn't think so. I'll have more on his trip to Benghazi when we return.
(COMMERCIAL BREAK)
SPITZER: Tonight, the U.S. footprint in Libya looks a whole lot different than it did 48 hours ago. Senator John McCain made a visit to Benghazi today and met with Libyan rebels. He's the highest- ranking U.S. official to set foot in Libya since the civil war there began.
This on the heels of yesterday's announcement, the U.S. drones would deploy into Libya, but McCain says that's not enough to even the playing field between the rebels and Moammar Gadhafi's forces.
So what would a deeper involvement in this civil war look like?
CNN international correspondent Reza Sayah joins us from Benghazi.
Reza, you spoke one-on-one to Senator McCain today. What did he tell you about his vision for American involvement in Libya?
REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Well, his vision is for the U.S. to do more. Get more involved and that's certainly what the opposition wanted to hear. They were very pleased with his visit. He outlined the plan included in that plan. He said the U.S. should finally recognize the interim government here for the opposition as the legitimate authority for the Libyan people.
And he also said the U.S. should help facilitate the delivery of weapons to the rebel fighters. It's, of course, a very vague term, the facilitating of the weapons. We asked him what he meant by that, here's what he had to say.
(BEGIN VIDEO CLIP)
SAYAH: You say the U.S. should help facilitate the delivery of weapons here. Could you be more clear on that? What do you mean by that?
SEN. JOHN MCCAIN (R), ARIZONA: What I mean by that is what we did in the Afghan conflict when the Russians were there. We can -- right now there are published reports, for example, that the Egyptians have helped get some weapons into the freedom fighters.
So there are ways that I think we could help make that happen without it being direct U.S. involvement.
(END OF VIDEO CLIP)
SAYAH: It is not clear how close the U.S. is into delivering these weapons or facilitating the delivery of these weapons. It's not even clear if President Obama is going to heed the suggestion, of course. Senator McCain not speaking for the administration.
SPITZER: You know, Reza, as you said, he got a hero's welcome. The opposition -- the forces, the rebels are desperate for any sign that the United States is going to come back in a big way.
Did Senator McCain indicate that he felt he could actually persuade the president to take any of the steps? Recognition is the one many people have been waiting for. Did he say -- that he felt we were any closer to getting there?
SAYAH: Well, he said he was going try. We asked if he was going to press harder. He said, I've been pressing harder. So it's unclear what's going on happen.
Again, it's important to remember he's not speaking for the administration. This is an influential congressman, certainly, Mr. Obama respects him. He's listened to him before, but it's unclear whether he's going heed some of these suggestions.
SPITZER: All right, Reza. Thank you for that. And obviously this is -- everybody's attention focused on Libya day by day.
Reza, we'll be talking to you in the days ahead. Thanks so much.
For more now, I'm joined by Richard Haass, president of the Council on Foreign Relations, and author of many notable books on foreign policy including "War of Necessity, War of Choice."
Richard, as always, thanks for being here.
Look, you created this analytical frame of war of choice, war of necessity, and have said Libya was a war of choice, but now that we're in, now that it's approaching a stalemate, should we listen to what Senator McCain has been telling us today, get in there to win this war?
RICHARD HAASS, PRESIDENT, COUNCIL ON FOREIGN RELATIONS: I would respectfully disagree with the senator. I don't think our interests warrant it. I think there are still other things we can do. For example, push for a cease-fire. It's a strategic distraction given all the other things going on in the region.
And also we still don't know the people we are supposedly helping. The senator talks about recognizing the rebels, the opposition. None of us can be confident of who they are, or who would emerge from say this 31-person council if they ever were to win.
SPITZER: Let me take a couple of these points sequentially. First a cease-fire. A cease-fire in place that left Gadhafi. Would that not, in fact, constitute a defeat for us in the long run if he were still there a year from now, two years from now?
HAASS: The principal purpose the president said for going in was a humanitarian crisis. I thought the administration made more of it than it was, so be it. But it was humanitarian. So if we can do things that keep more people alive than a long civil war, why is that so bad?
SPITZER: Well, you're picking a piece of what the president said. It's certainly correct. And U.N. Resolution 1973 was humanitarian at its foundation.
HAASS: Sure.
SPITZER: But the president and Secretary Clinton, and in fact the leaders in Europe, have been very, very clear, Gadhafi's departure is the -- not inconsequential objective that we're really after here.
HAASS: Exactly. I'm not arguing that that's what they say. Again, I disagree with it. I don't think it was wise to make it so essential. If he does stay, will that be seen as something of a defeat for some people? Perhaps, but again, compared to what? Compared to what it would cost to get him out? Compared to what would take his place? These are imperfect choices. I would simply say let's lower our involvement, our investment simply because we can't be sure of what doing more would get us.
SPITZER: And you're certainly distinguishing between what is overly the political objective of the president, removing Gadhafi, versus the humanitarian United Nations objective and also our strategic interest which you're saying may not be that great right there.
HAASS: They're certainly aren't great. That to me can't even be argued.
SPITZER: All right. Now you also focus on who are they? Meaning, we don't know if they're Al Qaeda cells, if they are individuals with whom we really don't want to have any relationship. The senator, Senator McCain, today made some pretty bold statements saying look, these are good guy, they're freedom fighters. Is he in a position to make that assessment or he is just responding emotionally to a very, you know, exciting moment.
HAASS: I'm sure there are some wonderful guys amongst them, but civil wars are bloody things. Once you get rid of the target, one say Gadhafi were to be ousted then the civil war turns on itself. What we always see are later phases in which they'll be jockeying for position and Senator McCain can't know that the good guys, quote, unquote, 'would necessarily prevail at that point." If history were otherwise, there would be (INAUDIBLE) rather than Leningrad.
SPITZER: Right.
HAASS: Things don't always work out the way we want.
SPITZER: Right, right. History is messy to say the least. I gather from this, therefore, that you oppose the increased escalation using drones. You see this as just one more step in an escalation that's almost ineluctable.
HAASS: Rather than raising what it is we do, I would lower what it is we seek to achieve. Well, again, I would try to get a cease- fire, preserve, you know, as many lives as you can rather than having a prolonged civil war and possibly use other things both to get Gadhafi out, new sanctions, maybe covert action, and take the time to work with the opposition, increase our confidence that we are actually shaping them so they would be something desirable.
SPITZER: All right. Look, let's shift countries and gears in what has become sort of a national course in geography of North Africa over the past couple of months.
HAASS: Sure.
SPITZER: Syria, bloodiest day, perhaps on record and certainly in several years there. Untold numbers murdered by Assad, the son. First, what are our interests in Syria and how do you assess the likelihood of this turmoil leading to regime change there?
HAASS: The United States has a range of interests in Syria. We do not, for example, in any way support what Syria is doing in places like Lebanon and Gaza. They have been a force of radicalism, supporting groups that are terrorists that are in any way except Israel. They've got a close relationship, almost a strategic alliance with Iran. So there's lots of negatives. On the other hand, there is a fairly stable border between Israel and Syria. So what is technically a state of war, in reality it's stable. Indeed, you see a mixed fuse in Israel as to really whether you want to see Assad go because, again, like in Libya, you don't know what the alternative is.
SPITZER: Right. As you say, the end of your fascinating article in "Time" magazine this week, the prevailing wisdom is better the devil you know than the devil you don't know. The uncertainty factor is an enormous one. Bashar Assad, the son who has taken over the country, is one of these second-generation dictators who is westernized in some respects.
HAASS: Exactly.
SPITZER: But then rules with an iron fist. Is there a schizophrenia internally within him or is he just, once he's there maintaining power is all he cares about?
HAASS: Maintaining power is ultimately all that he cares about. He and the people around them, he runs the minority, the Alawites who are in charge of Syria, maybe at most 15 percent of the people. So he rules by force and he corrupts as many of the Sunni majority as he can. He does a little bit of reform though he talks about it more than does it, but when push comes to shove, he and his security forces are prepared to kill people.
What's so interesting, Eliot, is how now people in Syria are actually prepared to go out and risk being killed.
SPITZER: Right.
HAASS: They seem to have shed their fear of the regime and that's why it's become much harder to predict how this is going to unfold and say if we've been having this conversation a week ago. SPITZER: Will that shedding of fear, the great phrase that you have just used, will that continue next week after the bloodshed this week? You know, until now, there have been some carnage and few deaths, but single digits to a great extent. Today it's expanded exponentially. So will he succeed in pushing back? But there seems to be almost a playbook for these second generation dictators, the kids, sons who inherit the mantle of being the dictator. They go to the west. They put on this veneer of respectability and somehow even get good press in the west. And then yet the moment a crisis arrives, boom, they come down with an iron fist.
HAASS: There's two variables in all these situations. One is the willingness of people to risk being killed. The other is the willingness of the security forces to kill.
SPITZER: Right.
HAASS: Those are the two things in play. None of us can know the answer. So far at least, people are taking great risks. And so far at least, security forces are willing to kill innocent men, women and children.
SPITZER: OK. I want you to weigh in. Last question. We're running out of time.
The desperate meter, I don't mean to be frivolous about this. Gadhafi aside, if Gadhafi is a 10, where does Assad compare to him in terms of how mean spirited and just nasty and how awful he is?
HAASS: Oh, they're both pretty high on any scale. Neither one of these by any stretch of the imagination. As good guys, though, in both cases, the United States has been able to do business with both. They're not one-dimensional.
SPITZER: Right.
HAASS: There are elements on both that are quite strategic and pragmatic but when push comes to shove in a civil war or when they feel threatened, there is nothing they won't do to maintain power.
SPITZER: Richard, I guess, the takeaway, it would be nice if life were easier, but it's not. It's messy.
HAASS: Lots of gray. Lots of gray.
SPITZER: Lots of gray. We need black and white. It makes life easier.
All right. Richard Haass, thanks for being here.
Coming up, globalization has been the mantra for saving the U.S. economy. But is it, in fact, crushing the middle class? When we come back.
(COMMERCIAL BREAK) SPITZER: Where is America heading? If you look at the stock market, sky's the limit. But ask people who live here and you get a very different story. According to a new CBS/"New York Times" survey, only 26 percent of Americans think we're heading in the right direction and a whopping 70 percent say we're on the wrong track. The worst number of Obama's presidency.
What's happening here? For years, we've been told that global capitalism would be our savior. Instead, it seems to be squeezing the middle class.
Joining me now are David Frum, former speechwriter for George W. Bush, and Chrystia Freeland, global editor at Reuters.
Welcome to you both.
Chrystia, you just wrote a fascinating article about this phenomenon. What did you find the actual impact of globalization has been on the middle class?
CHRYSTIA FREELAND, GLOBAL EDITOR-AT-LARGE, REUTERS: So -- thank you very much, Eliot. And my piece was based on some work that Michael Spence, who is a Nobel Prize-winning economist, very nonpartisan and someone who's actually very close to China, he's an adviser to the Chinese communist party on their five-year plan. So he's someone who knows globalization and believes in it.
SPITZER: Right.
FREELAND: But he did some work on trying to figure out what is it doing to the American middle class? And what he found is global capitalism isn't working for the American middle class. Not only are the jobs going away, but the jobs that people have are moving into sectors where people are paid less. So those 70 percent who said things aren't working for us, they're right.
SPITZER: And as evidence of this, I suppose the other McDonald's hired 50,000 people. That's great news, 50,000 jobs, but eight bucks an hour. And GM beginning to come back a little bit, but the new hires are at 24 bucks an hour, not the 48 they used to have. But David, you're dissenting on this.
DAVID FRUM, EDITOR, FRUMFORUM.COM: Look, if the problem were global capitalism, you would expect to see the problem showing up all over the globe. But clearly, these problems are worse in the United States than they are in other advanced industrial countries. There's something special about the United States that causes pressure on middle class incomes more here than in the Netherlands or Australia or anywhere else. And that answer is the rising cost of health care. And let me just give you one fact --
SPITZER: Sure.
FRUM: -- that people could bear this in mind about the problem of the middle class. In the expansion of the first decade of this century, what employers paid for labor did go up. Wages -- sorry, compensation, the costs went up by about 25 percent over the expansion. It was wages that didn't rise because every dime of what employers paid was taken by health care cost, so it may be everything that Chrystia and Mike Spence say is correct. But it's also true that the immediate bone in the throat of the American middle class is the rising cost of health care. I agree with that.
SPITZER: OK, Chrystia, it certainly is the case. I think David's point is right. Health care costs have made us less competitive than we otherwise should have been. But is it not the case perhaps and this would support your theory that the sectors where we have been dominant certainly for an industrial, from a manufacturing perspective were most readily susceptible to foreign competition, automobiles, for instance, steel, sort of heavy industry and those jobs, middle class jobs which have been the bashing of unionized middle class workers are now all gone.
FREELAND: Yes, that's essentially right. I mean, I don't disagree with David. I think American health care is uniquely expensive and delivers poor results and that's a weight on the U.S. economy, but this process is actually happening in all the western industrialized countries. Australia is a little different because it's a natural, resource-based economy. But basically what we're seeing is technology is taking away jobs. Machines can do jobs that people used to be able to do and that means that if you're at the very top and you're able to fire people and have your factory be more productive, it's great, but it's not great if you lost your job. And also people in India and China, hundreds of millions of them are now entering the global economy.
SPITZER: David, let me accept your counterargument as being absolutely correct. If we don't control the health care cost then we will come less and less competitive overtime. But just as a matter logic with the globalization of the economy, for all the reasons that have been so articulated over the past decade, workers here without unique skills are competing against a broader labor pool that includes India, Japan, China, Brazil. And therefore, unless they have that unique skill, they're going to see their compensation declining.
FRUM: That's true. It's also true that globalization does not refer just to trade. It also refers to migration practices. Since 1970, the United States has imported about 40 million people, most very low skilled. And there's more and more evidence that they are -- their children and grandchildren are not accumulating the skills as well. So we are voluntarily doing things to make this problem worse through our migration policy. You know --
SPITZER: Are you suggesting -- I just want to understand the logical sequence. Are you suggesting we should have tougher immigration strategies?
FRUM: I am saying we should have a lot less immigration and it should focus much more on attracting highly-skilled people because if you're living in a world in which the wages for the less skilled are coming under pressure, the idea that you are voluntarily dramatically increasing your population of the less skilled as the United States and Western European countries are doing, that isn't a very good idea. FREELAND: But just sort of taking away sort of the passionate issues of immigration out of this discussion, actually when you look at the economy, the problem isn't at the very bottom. The people at the very bottom are not doing worse than they were before. There are still jobs there and the compensation hasn't changed. What has changed is just the availability of jobs in the middle and that now includes white-collar jobs --
SPITZER: Look, but there's a reason --
FREELAND: That change can do and people in other countries can do.
SPITZER: There's a reason for that. The jobs that tend to be more towards the bottom are service jobs that are frankly, harder to export.
FREELAND: Right.
SPITZER: You can't export somebody who's turning the burgers at a McDonald's.
FREELAND: And a machine can't do it.
SPITZER: That's right. You cannot yet. What you can export, frankly, are the middle class jobs, the higher end manufacturing and even now some service jobs and lawyers are being exported in terms of document production so it is in the middle that you see that squeeze overseas.
FRUM: That means you have to have a much greater emphasis on the skill level of your population. But here's -- here's the challenge that again America faces. We have this huge overinvestment I would argue in college education. We have seen through, again, the first decade of the century, the wages of college graduates which had been rising very handsomely and the past have begun to stagnate and the premium for college graduates has been dropping. There's a lot of argument about why this is so. But one thing that people suggest is that employers are getting better at saying a college degree is not a college degree. There are different kinds of college degrees. You have a degree in math from Cal Tech. That's one thing. You have a degree in communications from somewhere else. That's a different thing. And so the challenge to the United States to maintain a constantly rising level of skills is made more difficult by the human capitalism in the United States.
SPITZER: OK. Time is running short. But what I hear you saying David and Chrystia, see if you agree with this, is that we have to differentiate between the skill sets we need in our workforce and merely handing out college degrees. Is this something you agree with?
FREELAND: Yes. I absolutely agree, but I don't think that education is going to be a panacea. I think that their is, for now, I think 20 or 30 or 40 years from now, it's going to equal out, but that's a long time. I think for now, there is just a limited number of those really good jobs. And if you have a much more educated workforce, so to speak, more competition for those.
SPITZER: OK. I'm going to do something. I want a yes or no answer from each one of you. I think you understand what it seems to me that this issue we've just been debating, discussing, which is somewhat esoteric, economics driven is really what is driving our entire politics. Do you agree with that? The squeeze in the middle class?
FRUM: We've had and not just this issue, we have had a catastrophic effect on the wealth of the country. America is poorer than we thought it was three years ago, and we are arguing over who is going to realize this loss.
FREELAND: Yes.
SPITZER: Yes. All right. You've got an extra 10 words. All right. Chrystia Freeland, David Frum, always good to have you with us.
Coming up, on Easter, kids search for Easter eggs in England. A modern Robin Hood is searching for the conscience of the rich and powerful. Good luck with that. We'll be right back.
(COMMERCIAL BREAK)
SPITZER: And now for something completely different. What about a new law that made political leaders and the hundred most successful bankers spend a couple of hours every year serving dinners in a school or cleaning bathrooms? Sound crazy? Not according to Dr. Rowan Williams. He's the archbishop of Canterbury, the man who will marry William and Kate next Friday in Westminster Abbey and those are his words.
In a week of bookended by Passover and Easter, he reminds us that responsibility and service are the price we pay for power. Here's more of what the archbishop said.
(BEGIN VIDEO CLIP)
Power constantly needs to be reminded of what it's for.
Power exists so that ordinary people may be treasured and looked after, especially those who don't have the resources to look after themselves.
Reminding our leaders what the needs are at the grass roots level.
And reminding the rest of us what politics and government are really for.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
SPITZER: We're going take another look at the Donald Trump spectacle now. We hope you heard our interview with him earlier in the show.
In a new Gallup poll, Donald Trump ties Mike Huckabee for first place in a potential field of Republican candidates. Will Trump turn out to be a significant force or a flash in the pan in 2012?
Joining me now are two guys from opposite ends of the political spectrum, CNN contributors Will Cain and Cornell Belcher. And I'll let you figure out who is on which side of the spectrum in a minute.
All right. Cornell, thanks for coming up from D.C. to join us. Trump, first, does he run? Second, does it matter?
CORNELL BELCHER, CNN CONTRIBUTOR: I don't think he runs. I think what you're seeing right now is sort of -- it is like you said a spectacle. And I think if he were seriously going to run, he wouldn't have given the interview that he just gave you. I mean, he's having a conversation about whether he has 700 million or over 2.3 billion. You know, that's not a conversation of someone who's going to run. You have to be talking about the people, step one.
SPITZER: You don't think most people relate to that?
BELCHER: Most of them are relating to that and everything is by him winning, how much money he's making. That's not a conversation that you do when you're running.
SPITZER: Will, good or bad for the Republican Party?
WILL CAIN, CNN CONTRIBUTOR: Horrible, horrible. I make no bones about it. Horrible for the Republican Party.
SPITZER: Why?
CAIN: One thing that Cornell said, I do think it's resonating on a deeper level with Americans and that is problematic. It's bad for everyone.
Why is Donald Trump popular? Well, you know, I mean, he's preaching this protectionist message. It's not our problem. Our problems are not our fault. It's the Chinese and the OPEC that resonates, and that's not good. And David Brooks said this. We also like him because he says what he thinks. Forget right and wrong, he just says it. He's not scared. He's not worried on being obnoxious and people gravitate to that.
BELCHER: Let me pivot on that for a second. I think -- but he's not saying anything quite frankly anyone in the Republican Party is going to say. I think the beauty of trump is this. It's the same beauty that was to a certain extent Obama. We saw a change in electorate in '06. We saw a change in electorate in '08. We just saw a change in electorate in '10. These voters are still looking for change.
SPITZER: Will, let me ask you one fact. Let me add one fact I want you both to deal with. Seventy percent of the public says the nation is heading in the wrong direction. That's got to be a tough number for the president to deal with.
BELCHER: It is an awful number and the gas prices actually sort of made it to spike up. It's like a wet blanket being thrown over the country right now. America is upset about --
CAIN: But here's the thing, Eliot.
SPITZER: Who is the Republican who can capitalize this?
CAIN: But here's the thing, Eliot. That is why Donald Trump is the exact wrong person to be listening to right now. Americans have hard choices to make, higher taxes, fewer entitlements.
SPITZER: Do you think you'll make those changes?
CAIN: He won't say one thing that's unpopular to the American public. He's going to give you whatever you want. He's a populist. That is not -- that's why he's a monster.
BELCHER: Yes. And more so than a politician.
SPITZER: You guys are agreeing on this, but --
CAIN: But here's the problem for Republicans. He's sucking all of the air out of the room for the people that actually do have ideas and problems, people who aren't well known, like Tim Pawlenty or Mitch Daniels, who have substantive ideas can't find a microphone.
BELCHER: And let me say this from a partisan standpoint, I sort of want to attack you all not getting in the way of Trump because I think he's your mess. But from a broader standpoint, it's America's mess because we've got this reality --
CAIN: Yes.
BELCHER: -- sort of pseudo-reality television creeping its way, sort of it's infected our pop culture but now it's affecting our politics.
SPITZER: But, Cornell, look, you've got to deal with the reality. President Obama came in after the '08 campaign he was going save everybody. Now, he's down at a low point arguably. You hear as his pollster, you hear Donald Trump saying these things you may think they're vapid, but it works. When are you going to get the president to embrace the message that has the same resonance emotionally so that he can reignite that energy?
CAIN: Is that really what you're going to ask Cornell to make the president to be less substantive and more populous?
SPITZER: I wanted -- you may get him to win.
BELCHER: That's the issue. Here's the thing. I would argue that when the president started talking about job creations, he's actually sort of on the message where American people are. What Donald Trump is sort of hitting these ideals that everyone can agree with. He's not running for president. He's not seriously running for president. The president --
SPITZER: Or he's running a very clever campaign. Look, Will, you may deride him. He's gone from zero to the top of the pile. And doesn't that speak to how vacuous and how unappealing the other candidates of the Republican Party are?
CAIN: No, it doesn't speak to that at all.
SPITZER: It doesn't?
CAIN: He's famous. What goes up fast will come down just as fast. Keep him talking, he'll kill himself.
BELCHER: I hate on grilling, Will, but someone who went through the Democratic primary process, always early polls actually don't mean a lot. They really don't mean a lot because voters are still making up their mind and that's why they run campaigns. However, they've given Trump -- Republican late getting into their campaign mode, that they've opened up a door for a guy like Trump to walk in.
SPITZER: Actually, we have to wrap. I agree you on that, Cornell. I think that's what he's done that's good for the Republican Party. He is showing the others are not there. It means somebody could get in.
All right. Will Cain, Cornell Belcher, good stuff as always from you guys. Thank you.
Thank you for joining us IN THE ARENA. Have a good weekend. Good night from New York.
"PIERS MORGAN TONIGHT" starts right now.
