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Fareed Zakaria GPS

Panel Looks Ahead to 2014; Interview with Bono; Interview with Elon Musk

Aired January 05, 2014 - 10:00   ET

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

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. On today's show, we have a rock star, a world famous inventor, and some seriously smart people. In other words, the usual GPS fare. First up, some great panelists to gaze deeply into their crystal balls and tell us just what 2014 will bring for the world. Will there be more wars, more peace, will we all make more money? And in the bonus round, what will happen in Sochi?

Then as we start the year, some pointers on success and creativity. From U2's Bono. And then from Elon Musk, "Fortune's" businessman of 2013 on creativity in business and science.

And thanks to globalization, we have gotten used to finding Coca-Cola in the Kalahari, and Russian vodka in Roswell. But is globalization on its way out? There is one indicator that points decidedly in that direction. I'll explain.

But first, here's my take. It's the beginning of a new year, and time for people like me to make predictions. I'm feeling bullish because last year at this time I argued that the American economy would recover better than most expected, and that's basically proved to be true. This year I'll make a less clear cut prediction. 2014 will be the year that China faces a fork in the road. It will revamp its economic system, deal with some of its growing problems, and set itself up for another decade of growth and stability. Or 2014 will be the year that the great Chinese miracle hits a serious road bump. Perhaps more.

I know. It seems odd to speak of problems and the need for reform in the world's fastest growing big economy, but China has built up imbalances in that economy for some years now, and they are not sustainable for much longer. Even before the financial crisis, China's top officials were aware that the economy was, in Premier Wen Jiabao's own words, "unstable, unbalanced, uncoordinated and unsustainable." It needed to wean itself off cheap credit and undergo market reforms.

Since then, in response to the global economic slowdown, China pumped even more easy money into its economy. The result, according to Morgan Stanley's Richard Sherma (ph) is that China's totals public and private debt is more than 200 percent of GDP. An unprecedented level for any developing country. Sherma points out that while it used to take $1 of debt to produce $1 of Chinese GDP growth, today it takes $4 to produce that same dollar of growth. Businesses and local governments have piled on debt. The property boom has accelerated. Without serious policy changes relatively soon, this is a bubble that is going to burst.

In addition, China faces other serious challenges. The average Chinese person almost anywhere in the country now experiences serious air and water pollution. They are also increasingly outraged by something almost as ubiquitous -- corruption. The Communist Party has pledged to take on these challenges and revamp its systems of promotion and party discipline to ensure that officials are less corrupt and more focused on ecological damage, not just growth. If in fact the new leaders of China do all of these things, they will face political resistance and backlash within the Communist Party and from some powerful sectors in society. President Xi Jingping has launched an anti-corruption campaign, but many in China believe it remains a case of selective enforcement. He's also sought to stabilize the party's power by tightening the noose on any critics in the media, universities, or even from private business people.

I'm not ready to bet against China. Its leadership has shown itself to be capable of difficult decisions and smart execution. And if the leaders do manage this transition well, China will emerge stronger and of course become the largest economy in the world. If they don't, they will likely face a slump, and perhaps political tensions that bubble up in the wake of a slowing economy.

2014 in China is the year of the horse. For all of the rest of us, 2014 is the year of China. For more, go to CNN.com/fareed and read my Time column this week.

Let's get started.

You have heard my take on what to look out for in 2014, now let's get straight to a terrific GPS panel to get their opinions and prophecies. Zanny Minton Beddoes is the economics editor of "The Economist." Ian Bremmer is the founder and president of the Eurasia Group, which looks at political risk around the world. Bret Stephens is the Pulitzer Prize-winning foreign affairs columnist for the Wall Street Journal, and Anne-Marie Slaughter is the president and CEO of the New America Foundation. She's the former director of policy planning at the State Department. Zanny, what everyone wants to know is, are we going to get richer in 2014? So what is going to happen with the economy? I suppose the U.S. economy principally, but what do you think is going to be noteworthy?

ZANNY MINTON BEDDOES, "THE ECONOMIST" ECONOMICS EDITOR: I'll stick my neck out. I think the global economy is going to get better. It is going to improve and grow faster, largely because of an acceleration in the U.S. economy. That sustained acceleration that we've hoped for and that has been a bit like waiting for Godot hasn't actually happened yet, I think will finally happen in 2014.

ZAKARIA: 3.5 percent to 4 percent growth?

BEDDOES: 3. Let's not get too excited, but 3 rather than 2. Or close to 3 rather than around 2. Why do I think that? Because I think the headwinds from the financial crisis, the deleveraging, the paying down of debt really is over. Mortgage credit is increasing. Consumer balance sheets are in reasonably good shape. Corporate balance sheets are in excellent shape. The fiscal tightening that's dragged down growth this year and in previous years is abating. The budget deal is very important. It's more sensible fiscal policy. Push the tightening down the road when the economy can do it. And underneath it, the U.S. economy has some really big strengths, whether it's the shale gas revolution, whether it's a much more competitive labor force, whether it's the kind of traditional strengths of this free market economy, I think they will come to the fore. It's not going to be morning in America. We're not going to see the growth rates that we saw after a recession in the early '80s, and it will still feel for a lot of Americans pretty grim. So a lot of the debate next year is going to be about the fact that many people don't see the benefits of the stronger growth, but I think there will be stronger growth.

ZAKARIA: Second biggest economy in the world. I think it's a moment of reckoning. The Chinese will either make big reforms, or it's difficult to imagine how you can keep this easy credit, easy money going. What do you think?

IAN BREMMER, PRESIDENT, EURASIA GROUP: I completely agree. I think that Xi Jingping's appointment has been a turning point for China. And I think we're seeing that in what he's doing in financial reform, in the free trade zone in Shanghai and anti-corruption and trying to create more transparency of senior leaders in state-owned enterprises like Cinopac (ph) and CNPC (ph).

ZAKARIA: But the one thing he hasn't done is eased up on the accelerator of easy credit that is currently fueling 8 percent growth.

BREMMER: He hasn't yet. Not quite yet, but yes. But what we all also see him doing is putting in place a national security council that is focused internal security, gives him control there. He's going hard on western press. Why? Because as he starts to engage in the more difficult types of reform that you're talking about to create some weakness and vulnerability for the Chinese Communist Party, he doesn't need a national security council that will just kick the can for a year, but he needs one if they start to have seriously truculent political leaders in provinces or elites in state-owned enterprises that say I don't want to go. He's going to have that capacity. So this is a leader that has created consensus at the top. He's working it hard. And it may not work. This is unprecedented stuff.

BRET STEPHENS, WALL STREET JOURNAL: But doesn't -- I don't want to -- we'll see about Xi. Internationally he's been playing his hand very poorly. It's hard to think of more useless provocations than China could make against the Japanese, against the Philippines, against Vietnam, and increasingly against the United States as well, insofar as our treaty obligations are involved.

ANNE-MARIE SLAUGHTER, THE NEW AMERICA FOUNDATION: You're looking at this from the international point of view. I'm much with Ian. This is all about domestic politics. All those provocations are ways of buying himself credibility with the PLA. ZAKARIA: With the army.

SLAUGHTER: With the army, with the Chinese army. This is, and similarly, what -- I think he's just shown is Tom Friedman just wrote an open letter saying do not ban the New York Times and Bloomberg reporters because you need a free press. What does he do the next day? He basically says I can investigate my own corruption. I'm putting an elite senior Communist Party person on it.

STEPHENS: I think the $64 billion question here is, is Chinese aggression in its neighborhood a sign of weakness and insecurity by the leadership or is it a sign of confidence and strength? I suspect it's weakness.

ZAKARIA: I'll get Zanny on -- you can talk about China, but I also want to ask you a simple question. Is fear of the collapse of the euro now finally off the table?

BEDDOES: I'll leave China for the moment. The fear of the collapse of the euro is off the table for the moment, or the collapse is off the table. Whether the membership will stay the same over the next two, three, four years I'm less sure. But I think 2014 will be a year where Europe won't face financial collapse, but it won't grow again. It is basically a stagnant region. I think the risk of the euro area becoming like Japan was the past two decades is very, very real.

ZAKARIA: That could be a drag on the U.S. economy -- on the global economy.

BEDDOES: It could -- well, I think the euro area was a serious concern for the U.S. economy when it hit global financial markets. And that goes back to your fear of will the euro break up. And I think that probability is very, very low.

But Europe is a stagnant place. Well, it has been a shrinking place for a while. The fact that it is stagnant is not great for the rest of the world but it's not going to drag the rest of the world down.

SLAUGHTER: And European investment, the U.S. is going to increase precisely because we're stronger and because we're more competitive, because we have got shale gas and they don't.

UNIDENTIFIED MALE: Especially Manhattan real estate.

(LAUGHTER)

SLAUGHTER: That too.

ZAKARIA: All right. When we come back, we'll talk more about Manhattan real estate, or at least we'll talk more about the United States directly. What will it look like in 2014?

(COMMERCIAL BREAK)

ZAKARIA: And we are back, prognosticating with Zanny Minton Beddoes, Ian Bremmer, Bret Stephens, and Anne-Marie Slaughter. Looking forward to 2014, the one thing we know is the United States has this biggest diplomatic possibility in 34 years with Iran, in one of these huge moments. What is going to happen?

SLAUGHTER: Well, I'm going to stick my neck out. That's the point of these kinds of shows. I think we will get a deal with Iran. I really do. I think the domestic politics and economic situation in Iran is such that they have a great interest in getting a deal, and we certainly do.

And when that happens, it won't change everything overnight, but that's going to redraw the geopolitics of the Middle East. Because if we could talk to Iran, just think what the pullout of troops in Afghanistan would look like.

Suddenly we would be talking to the Iranians, to the Indians, to the Pakistanis. You would have a regional group.

Similarly, if you -- you know, naturally we have been closer to Iran than we have been to Saudi Arabia. I mean, for a long time Iran was our ally and we would suddenly be working with both Turkey and Iran on a host of questions where Iran could actually play a very positive role.

That's not going to happen all next year. But if we get a deal, and I think we are, the implications of that deal will shape the next decade in the Middle East.

ZAKARIA: Bret, you thought this temporary deal was worse than Munich.

STEPHENS: Yes, I was understating it.

ZAKARIA: That was something of an exaggeration. But so what do you think? Do you think this deal could happen?

STEPHENS: Well, I think Anne-Marie is right that we could get a deal. I think the Iranians are interested in a negotiated settlement that allows them to become a threshold nuclear state, which is dangerous and effectively tantamount to being a nuclear state.

What we're going to get from that deal is not a reformed Iran, not an Iran that is going to be prepared to work with us on any more friendly basis than Putin's Russia has been since the so-called "reset."

But we're going to lose three if not four core friends who have seen us as a bulwark against Iranian influence: Saudi Arabia, not always our favorite people, but an ally of the United States for 70 years; Egypt; and also Israel. And that's not...

ZAKARIA: These are all allies of the United States when we had very close alliance with Iran -- with the shah's Iran. Why is it impossible...

STEPHENS: Well, look, to speak -- I'm sorry, but...

ZAKARIA: Why is it impossible for the United States to do what Anne- Marie is talking about, which is to maintain a kind of Bismarckian policy where we have good relations with Saudi Arabia and Iran as we had...

SLAUGHTER: As we did for a long time.

ZAKARIA: ... in the '30s, '40s, '50s, '60s, and '70s?

STEPHENS: Look, Henry Kissinger makes a very good distinction with Iran. And the question is, is it a country or a cause? And the place you're speaking about is a country with a limited set of ordinary nation-state interests.

My contention is that it is and has been for 34 years a cause with global interests and a profoundly ideological view of the world. I don't think that...

(CROSSTALK)

STEPHENS: I don't think that changes with this deal.

ZAKARIA: ... on the Middle East forever.

Sochi, what is going to happen? What does Russia look like in 2014?

BREMMER: One quick point, which is just I think there's a big difference between what the interests are of Saudi Arabia and Israel in an Iran deal, and they're against it, and they should be, and what the Americans' interest are in an Iran deal.

And they're largely in favor of it because we want to extricate ourselves from it. The Syria deal was clearly bad from a Saudi perspective, it's clearly bad from the perspective of the Syrian people. They don't care if they get killed by chemical weapons or conventional.

From an American perspective, we are out of it. I think it's important that we identify where there are differences between American traditional allies and the American core national interest. And those interests are changing.

On Russia's Sochi, this is going to be a geopolitically interesting Olympics. Not words you like to hear...

SLAUGHTER: Back to Moscow in 1980.

BREMMER: ... about the Olympics. Back to Moscow 1980. We already know that there are a lot of folks that aren't showing up. We have already heard that from the French. We have heard that from Obama, of course. We have heard it from Biden.

There are going to be some gay American athletes that are showing up to show American diversity. Putin is not going to like that. We're really tweaking this guy. Sochi is going to be a disaster.

I mean, they have spent more on this Winter Olympics already than the last five Winter Olympics together. My prediction, 2014, Medvedev isn't prime minister at the end of this year. There is going to be a big cleaning of house.

I think Shuvalov is the most likely to become the next conduit interlocutor Western face for Putin.

SLAUGHTER: You have got to tell us who Shuvalov -- talk about Shuvalov.

BREMMER: The deputy guy.

ZAKARIA: First deputy prime minister, technocrat.

BREMMER: Yes, big technocrat, I mean, has been coming over, talking nice-nice to Americans, asking for cash.

The fact is that Russia -- Putin has had a fantastic year in 2013. Russia has not. And his interests are decoupled. What has Russia won recently? They won Snowden. They won Assad. They won Yanukovych. God bless them. They can have all of those guys.

(LAUGHTER)

BREMMER: The fact is that this is not helping the Russian people. And their budget right now, I think, balances at $117 a barrel when oil prices, even if there isn't an Iran deal, are coming down. And if there is, oh, my God. So this is going to be interesting.

ZAKARIA: A quick thought just on the Iran thing. Your prediction for 2014 would be that Israel will or will not strike?

STEPHENS: You know, I've been making this prediction on this show for so many years that it will strike that I have to stop and ask myself, what has kept it from striking? And I think the issue has been capacity. Can they actually do the job?

And the internal politics, because even at the highest levels of the Israeli security cabinet there are real doubts about whether they can accomplish something that will be worth the candle, so to speak.

So that's the real question for the Israelis.

ZAKARIA: The big question, we were going to talk more about America, but the American that the world will be watching most attentively is Janet Yellen. What is she going to be like at the Fed?

You know, everybody has assumed that she is going to be much more comfortable with a very expansionary monetary policy, except the Fed has already begun de-tapering (ph).

BEDDOES: It has already begun. And I think she will be in substance very similar to where the Bernanke Fed was. In style she will be very calm, very considered, very -- very well-respected very fast.

And if, as seems now plausible, Stanley Fischer is nominated to be her number two, it will be a top notch team there. And I think that it's a tough thing to do. This shift from starting to taper to then indicating that you're continue to taper without scaring financial markets, they messed it up in 2013. The summer of 2013. The taper shot was in large part a communication misstep by the Fed. They did the introduction of actual taper in this month extremely well. So far so very good. They have convinced markets that tapering is not tightening. 2014, the test is can they continue that? I think much depends on how the U.S. economy does, but I think she and the Fed have every capacity to do that well.

ZAKARIA: When do you look around the world, what are you watching in 2014?

SLAUGHTER: I'm going to -- I'm watching among other places, Kurdistan. Which may seem unusual. But what you're seeing is Turkey pushing closer and closer to the Iraqi - the Kurdistan in northern Iraq. And that's driven by Turkish domestic politics. That's a tremendous flash point in Iraq and also with respect to Syria, because as Syria falls apart, you have got Kurds in Syria.

ZAKARIA: And it's one of the most oil rich regions in the world.

SLAUGHTER: Absolutely. I actually think you could have a real flash point crisis between Turkey and Iraq possibly with Iran playing in there around the issue of the Kurds. So it's where I would watch.

ZAKARIA: What are you looking at?

BREMMER: I'm looking at American allies. Not Canada and Mexico, because they can't go anywhere economically. Not Israel, Japan and Britain, because they can't go anywhere strategically. But you get right under that group, and everybody is in play. I'm looking at Indonesia. I'm looking at Saudi Arabia. I'm looking at South Korea. France. Germany. Britain. All of these leaders that feel like American commitment to them is really open to question, and how is that going to be articulated in their economic policy, the diplomatic policy, their security policy. Those are things I'm looking at.

ZAKARIA: Quickly?

STEPHENS: This is precisely why you want to be mindful of what your allies want, because a world of foreign policy freelancers is ultimately very dangerous for the United States, and that's what we're getting from too many countries to count. Very briefly, we should say something about Mexico and the change of the oil law, which I think is going to have profound strategic effects on the North American energy market. Not - you don't want to call it independence but you do want to call it security. A major step forward for Mexico.

ZAKARIA: They are opening up the oil industry, which should make it much more productive, which should make --

STEPHENS: Ending 75 years of misbegotten socialism.

ZAKARIA: What are you looking at?

BEDDOES: I'm looking at two elections. I'm looking at India. I'm looking at Brazil. Two enormously populous countries, two elections next year. As you know much better than I, Narendra Modi, a man who is a Hindu nationalist, now looking very likely to do extremely well. He's favored because he's deemed to have a more business friendly approach to the economy. Quite what that means will be very interesting to watch. Brazil, very interesting. How does Dilma Rousseff do? I think much - it would be interesting to see how that plays in with the World Cup. Is Brazil a kind of catastrophe next year or does it do better than expected? Lastly, one place. Scotland. Scotland will be very interesting. Scotland will vote on whether to leave the union, the United Kingdom. I predict it won't, but I think that back in my little world, that will be very interesting in 2014.

ZAKARIA: Zanny Minton Beddoes, Bret Stephens, Ian Bremmer, Anne-Marie Slaughter, we will hold you all to this.

Up next, what in the world. Here's a big question for 2014. Have we reached the end of globalization? I'll tell you the answer when we come back. Also, one-on-one with a rock star. U2's Bono is on the show.

(COMMERCIAL BREAK)

ZAKARIA: Now for our "What in the World" segment. At the start of 2014, let's take a look at one of the great trends of the last century. You could be sitting in Chicago, Illinois, right now, but your TV was probably made in Japan, your sneakers were likely manufactured in China, and your coffee might be from Kenya. Globalization impacts every single thing around us. So here's my big question. Have we reached the end of globalization?

Let me explain what I mean. For much of the last 30 years, there has been a steady trend in commerce. Global trade has expanded at about twice the pace of the global economy. For example, between 1988 and 2007, global trade grew on average by 6.2 percent per year, according to the World Trade Organization. During the same period, the world's GDP was growing at nearly half that pace, 3.7 percent. But a strange thing has taken place in the last two years. Growth in global trade has dropped dramatically, to even less than GDP growth.

The change made me wonder. Has the incredible transfer of goods around the world reached some sort of pinnacle? Have we exhausted the drive toward ever more globalization? It's a fascinating thesis. The world has seen historical developments in the last few decades. The Internet, China's opening up, the rise of emerging markets, fast and cheap travel, all these trends led to a massive acceleration in global trade. But have those trends peaked? Could the next big invention, say 3-D printers, end the need for more and more trade? Imagine a world where you need a new faucet in your restroom, and instead of going to the local store which sells faucets made in China, which contributes to global trade, now you just print out your own faucet sitting at home or at a local store. Are people also getting more interested in local products compared to global brands? Joshua Cooper Ramo points out in an essay in "Fortune" that localism is on the rise, local banking, local manufacturing, even local sourcing for food and restaurants. Is this simply a pause or could it be more than that? The answer will depend on politics. The last time the world saw a consistent period where the growth of global trade lagged behind global growth was in the 1920s, '30s and '40s. One factor was the rise in protectionist policies, as a response in many cases to the Great Depression and the disruption of the gold standard. At one point, under what was known as the Smoot-Hawley tariff, the United States government began imposing import duties of about 60 percent. The move was aimed at protecting domestic farmers. But instead, it exacerbated the depression, led to a steep drop in trade and a wave of counter-protectionist measures by other countries.

The world has learned its lessons from the Great Depression, but perhaps not as well as it should have. According to the independent think tank Global Trade Alert, we're in the midst of a great rise in protectionism. In the 12 months preceding May 2013, governments around the world imposed three times as many protectionist measures than moves to open up. Anti-trade policies are at their highest point since the 2008 financial crisis, according to the Peterson Institute, the rise of these measures cost global trade $93 billion in 2010.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is so agreed.

(END VIDEO CLIP)

ZAKARIA: There might be some good news on this front. Last month the World Trade Organization passed the deal to cut red tape in customs. It's a small start and there's a lot more to accomplish.

Globalization and trade have produced huge benefits for people, especially the poor, who have been able to make their way out of poverty in a faster growing and more connected global economy. But globalization won't keep happening by accident or stealth. Politicians will have to help make it happen. Up next, two great conversations about creativity and innovation. First with Bono of the rock group U2 and the other with a man who wants to make traveling to Mars a reality for human beings. Elon Musk. The founder of SpaceX. Stay with us for these fascinating interviews.

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington with a check of the headlines. Much of the United States will be in a deep freeze over the next few days. Temperatures could drop as low as 30 degrees below zero in parts of the Midwest and Great Plains today. That's where the Green Bay Packers are hosting the San Francisco 49ers in what could become the coldest football game in NFL history. The weather is also causing havoc at airports nationwide with more than 1,500 flights canceled.

New York is set to ease restrictions on marijuana use. Governor Andrew Cuomo plans to sign an executive order making medical marijuana legal in the state. The "New York Times" reports Cuomo's plan will allow certain hospitals to distribute pot to patients with cancer, glaucoma and the other serious illness.

Secretary of State John Kerry says the U.S. will support Iraq and its fighting with al Qaeda-linked militants, but without sending American troops back to the country. Al Qaeda-affiliated fighters have been battling with government forces for control of Fallujah. Heavy fighting in Iraq's Sunni Anbar province in recent days has posed a serious challenge to the country's Shiite dominated government. Those are your top stories. "Reliable Sources" with Brian Stelter is at the top of the hour. Now back to Fareed Zakaria "GPS."

ZAKARIA: I recently had the pleasure to talk to two of the most creative people in their fields. Two people whose creativity has brought them each great success. They are Bono, the lead singer of U2 and Elon Musk, who heads two of the most innovative disruptive companies in the world. Electric carmaker Tesla and SpaceX, which manufacturers and launches rockets and spacecraft picking up where NASA and others have left off. I saved some of the best parts of each of those interviews for you today, exclusive parts where I talked to them about their creativity, where they find inspiration. First up, Bono.

(BEGIN VIDEO CLIP)

ZAKARIA: What do you think makes somebody creative in the sense that you understand it? Writing of songs and thinking up tunes?

BONO, LEAD SINGER U2: I can only speak from my own experience, but observing the species up close as I have over the years. I think it's often emptiness, the void and the attempt to fill the void is art and the artist is the person who is making up for absence. If you were completely of sound mind, you would not need 70,000 people screaming I love you a night to feel normal. It's the god shaped hole, I think, somebody called it once.

ZAKARIA: How do you - How does the song come to you?

BONO: Well, performing for me comes on like a twitch, really. I have no choice. The song writing piece is different. It comes out in two ways. Despair and attempt to put things right that have been wrong or joy, just ebullience, you know, it's just overflowing -- my cup overflowed. When things are going very well in my life or in our family, the things are good, I write naturally. I just can't stop writing. And - but also when I'm in a hole, I'm in a corner, I try to write myself out of it.

ZAKARIA: You told me once that sometimes you just get up with a tune in your head and you don't know where it came from.

BONO: Yeah. The arrogance of artists is to be really despised because it is a gift. You wake up with a melody in your head or whatever and in that sense it's like inherited wealth or being born with a beautiful face. You should not be made arrogant by something you didn't create yourself. So the talent is latent. I guess my father was a tenor. Really, a fine singer. And he was also - he loved to paint. He loved Shakespeare. He loved to act. So I got all of that in me. So, it's just - it's very easy for me to write. Unfortunately, it's not easy for me to be great at it. That seems - that's the most maddening part of creativity is that I can't seem to figure it out how it works. Like with U2 for many years, even in the studio, it was like, if you saw us, you would laugh. I mean it was just this dysfunctional musicians making horrible noise and then eventually it comes together at some sort of top line melody appears in a harmony and rhythm - we get to something pretty special. But it was easy to tell the special from the crap.

ZAKARIA: A lot of the songwriting or the music that we associate with those days and through you is often political. Nowadays it seems less so. Why do you think that is? Or maybe it is, maybe ...

BONO: Yeah, it's very hard. I mean politics as Bob Dylan calls them topical songs, I mean they can often be very, very boring. And we've written some good ones. They have to come from the place. If you set yourself a task to write a song, I don't know how ever great the song will be. The great songs kind of write you. Often, I might be sitting here with you and I might say this is really on my mind. I'm very concerned about what's going on in this geography. You would think I would write a song about it. It's not like that. There's a whole other thing going on in my personal life, there's a whole other thing going on in my unconscious and it is what is going to come out. Now, sometimes they will connect those two things. We'll write a song. I, for example, wrote a song for Aung San Suu Kyui called "Walk On." We wrote a song from U2.

But those are songs about her, it's not literally about her, it's also about you're always writing songs to yourself, you know, to try and get yourself through something. So ...

ZAKARIA: So it's more about looking inside of you rather than looking at the world.

BONO: Yea. I mean it's sort of - it's a funny thing. And it's the same with singing. You know, sometimes you're on stage, you'd be singing and you know, you'll be thinking as Mick Jagger says about the dry cleaning although I find it hard to imagine Mick Jagger thinking about the dry cleaning, but other times the song is - it's you. You're one and the same. As an Irish poet William Butler Yeats said, you know, the dancer and the dance they become the same thing. So, it's slightly magic. And I know you probably don't want to believe in that because it can be such a hocus pocus and a lot of nonsense. A lot of hate and, you know, the way artists talk. I just caught myself here, even now it just sounds like such malarkey. But you see people on the Grammys and they are saying, you know, I just want to thank God for that song. Don't thank - don't blame God on that song.

(LAUGHTER)

BONO: That's your song. And so, but there is some magic, something unknowable about art.

ZAKARIA: You have - you are deeply steeped in poetry, opera, art. Do you think those - is that a prerequisite to really do great things?

BONO: I don't know. I've seen it come out of people on the street. I've been in corners of Africa and you see just - just somebody doing amazing work. I don't know where it comes from. It helps, though. Irish people love language. Our revenge on the mother tongue, you know, English language was to sort of make it our own. You know, in the case of, say, Beckett was to chop it up and make it minimal. In the case of Joyce it was like a chewing gum. You know, stretch it and pull it. And with Oscar Wilde it was like (inaudible) than English that ever have been spoken and more ornate. Our relationship with the English language is a testy one, but it's, I think, it's done well for poetry and playwrights and hopefully for song writers.

ZAKARIA: Do you think you get more creative over time or as you age or less?

BONO: Well, look, I'm looking at gravity right now and as a rock 'n' roll band. I mean there's no one has done their best work who has been around, no band for 30 years. So, with this, I don't know. We're going to see. But you know what, that's not true of a filmmaker, it's not true of a novelist, it's not true of a poet. So, why should it be true of a rock 'n' roll band? And I'm humbled that in our little post-punk combo from Dublin to think that maybe our best work might be to come even if the odds are against it.

ZAKARIA: Let's hope that your best work is to come. Bono, thank you. Pleasure to have you on.

BONO: Thank you.

ZAKARIA: Up next, Elon Musk, the founder of SpaceX. Where does all his creativity come from? We'll find out.

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ZAKARIA: Elon Musk is one of the most creative business people I know. He thinks big. He starred SpaceX in order to perfect the technology, to get a colony of humans started on Mars. Last year he released into the public domain his ideas for a concept he calls the Hyperloop which would get people from Los Angeles to San Francisco in about 30 minutes. I wanted to know just where that sort of creativity comes from. So I asked him.

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ZAKARIA: People think of you now as almost - as something of a dreamer, right? You are dreaming about life on Mars. You are dreaming about people being carried in pneumatic tubes from city to city. Do you think that imagination plays a large role in your life?

ELON MUSK, FOUNDER AND CEO, SPACEX: Yeah, absolutely. I think, you know, with respect to creativity, a lot of it is just trying really hard. Like what I find most often is how would I be more creative? Have you tried?

(LAUGHTER)

MUSK: Like literally saying, like your mind in that direction.

ZAKARIA: And you think people are too risk averse to really try?

MUSK: They don't send their mind in that direction, it's - which I find strange. Like literally, the first order of business is to try.

ZAKARIA: Do you find when you hire people, you are looking for people who have that mindset who are willing to try stuff?

MUSK: Yeah. Yeah. What we look for at SpaceX and Tesla is evidence of exceptional ability.

ZAKARIA: Defined how? By grades? By ...

MUSK: Right. So, grades is a fairly obvious way, but very often it's not the person with the good grades, but there are other things in their background that they've done that are exceptional. Like they created something when they were a kid that was some cool technology or maybe they won first robotics competition or won a state science competition.

ZAKARIA: And that to you would be more important than just straight As?

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MUSK: Yeah. I mean in college you can kind of game the system. Pick courses that get you high GPA. But they're not demonstrating necessarily creativity or out of the box thinking. You know, that's ...

ZAKARIA: How do you feed out of the box thinking? Do you feel like you -- do you do anything to try to feed creativity?

MUSK: Yes. So, I try incent that at the company. In fact, if somebody is like senior engineer or executive, and they're not trying to do radical improvements, that's unacceptable.

ZAKARIA: Steve Jobs said he lived in the intersection of humanities and technology. Do you feel like you draw some of your inspiration from non-science? Because obviously, you have a deep grounding in science. But where else do you go? Where else do you look?

MUSK: I like - I'm a big, you know, big fan of history. I like a lot of things. I like history, literature, arts. And it's really interesting to read history and say what happened to various civilizations. Because like civilizations clearly have a life cycle in history. And then to think, OK, what could we do to make the life cycle better? Like maybe we can't live forever as the civilization, but we want to live as long as possible.

ZAKARIA: Who are your heroes when you look at-- do you look at inventors? Do you look at - I notice in SpaceX, a lot of the conference rooms are named after really serious physicists, for example.

MUSK: Yeah.

ZAKARIA: I mean Newton, Wernher von Braun.

MUSK: Yeah. ZAKARIA: Are those your heroes? Or is it Edison?

MUSK: I'm a big fan of people who made a positive impact on civilization. So, I really love Ben Franklin. The guy that did so many incredible things. He did what was needed at the time it was needed.

ZAKARIA: Indeed, do you look at yourself that way? You are kind of - It seems like you look at the world and see a problem and try to come up with a solution nobody else has - You start with the real world.

MUSK: Yeah. I think if one isn't grounded in reality of that and like physics is the law. It's literally, you know, so if you're doing something that violates the fundamental laws of physics, then you're almost certainly wrong or you're going to get a Nobel Prize. But you're much more likely to be wrong than get a Nobel Prize.

ZAKARIA: So, you know, kids are looking at you and know that you're supposedly the inspiration for "The Iron Man."

MUSK: I think partly. But I'm a partial inspiration for the movie version of "Iron Man."

ZAKARIA: So, what do you say to kids if they want to become you?

MUSK: So, if you want to do things like me, you have to like learn how to be good at technology. Like so study engineering, physics, that kind of thing. Understand how the world works. And try to be as accurate as possible about that. And then like I said, also try to be creative, which means just like try to think of things that haven't been done before, but that would probably make the world better. It requires - I mean that requires a lot of mental effort to do that. So, you know, I don't just like come up with stuff like willy-nilly. I mean occasionally, but it's rare. You have to like think until your brain hurts. That's basically - If you haven't thought until your brain hurts, then you haven't tried hard enough.

ZAKARIA: Elon Musk, it's a good point to end on. Thank you. Thank you.

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ZAKARIA: Up next, why we're number one. I don't mean America. I actually mean something right next door to my office. I'll explain when we come back.

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ZAKARIA: There's about a month to go until the Sochi Winter Olympic Games and it brings me to my question of the week. What country has won the most Winter Olympic medals to date? A, Norway, B, Germany, C, Austria or D, the United States. Stay tuned. We'll tell you the correct answer.

This week's book of the week is "The Kennan Diaries" edited by Frank Costigliola. Kennan was America's great strategist of containment, which won the Cold War. But these diaries also reveal him to be something very unusual in America. A genuine classical conservative. Plus, as always, he's a beautiful writer.

And now for "The Last Look." We've all been inundated in recent weeks with lists of the best of 2013. Best movie. Best song. Biggest gaff. Cutest cat. But one of these lists hit quite close to home for us. Literally, Columbus Circle right outside our studio here won best roundabout of 2013. That's according to the British Roundabout Appreciation Society. Who knew there even was one of those? Digging deeper, though, we learned that the lowly much maligned roundabout, apparently, is a thing to be appreciated. According to America's Department of Transportation, replacing crossroads with traffic circles leads to a 35 percent drop in crashes and a 90 percent fall in deaths. So unless you drive like Chevy Chase in "European Vacation."

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UNIDENTIFIED FEMALE: There it is. There it is. There it is.

UNIDENTIFIED MALE: I know. I can't seem to get over the left, honey.

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ZAKARIA: We suggest the world build more roundabouts in 2014.

The correct answer is A, Norway, with a count of 303 medals. The United States is in second place with 253 medals. Of course, when comparing Norway's population of just 5 million people to the United States' population of 317 million, Norway's count is that much more impressive. Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "Reliable Sources."