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Fareed Zakaria GPS

Negotiation On American Prisoners; Sanctions Relief For Iran Missile Violations; Review of Obama's Final State Of The Union Address; U.S. Global Economics. Aired 1-2p ET

Aired January 17, 2016 - 13:00   ET

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

[13:00:06] FAREED ZAKARIA, CNN HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you live from New York.

We have a great show for you today starting with the day many critics said would never come. Iran comes in from the cold satisfying all the initial requirements of the nuclear deal. At the same time Tehran releases five American prisoners.

Is this a new era of relations with the West or is it a trick as some critics contend? A good deal or still a deal with the devil?

And President Obama began his final year with a heartfelt State of the Union.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Protecting our kids from gun violence.

(END VIDEO CLIP)

ZAKARIA: What will he be able to accomplish in 2016 and what to make of his possible successors? I will talk to David Frum, Sean Wilentz, and Raha Faroohar.

But first, here's my take. I want to tell you today about an experience I had recently. One that I think shed some light on a big trend that worries all of us -- radicalization. I'll get to my tale in a moment, so bear with me.

Thomas Jefferson often argued that an educated public was crucial for the survival of self-government. We now live in an age in which that education takes place mostly through new platforms. Social networks, Facebook, Twitter, Instagram are the main mechanisms by which people receive and share facts, ideas and opinions.

But what if these new technologies encourage misinformation, rumors and lies? In a comprehensive new study of Facebook analyzing posts made between 2010 and 2014, a group of scholars found that people mainly share information that confirms their prejudices, paying little attention to facts and voracity, as Cass Sunstein wrote about in a recent "Bloomberg" article.

The result, the study authors conclude, is, quote, "the proliferation of biased narratives fomented by unsubstantiated rumors, mistrust and paranoia." The authors specifically studied trolling, the creation of highly provocative, often false information with the hope of spreading it widely." They write that many mechanisms cause false information to gain acceptance which in turn caused false beliefs that once adopted are highly resistant to correction.

As it happens, in recent weeks, I was the target of a trolling campaign and saw exactly how it works. It started when an obscure Web site published a post titled, "CNN Host Fareed Calls for Jihad Rape of White Women." The story claimed that in my private blog, I had urged the use of American women as, quote, "sex slaves," unquote, to depopulate the white race.

Disgusting. And so much so that you'd think the item would collapse of its own weightlessness, right? Wrong. Here's what happened next. Hundreds of people began linking to it, tweeting and re-tweeting it, adding their comments which are too vulgar or racist to repeat. A few far right-wing Web sites reprinted the story as fact. With each news cycle, the levels of hysteria rose and people started demanding that I be fired, or deported or killed.

For a few days the digital intimidation veered into the real world. Some people called my house late one night and woke up and threatened my daughters who are 7 and 12. It would have taken a minute to click on the link and see that the original post was on fake news site. One that claims to be satirical but doesn't really make that clear. It would have taken simple common sense to realize the absurdity of the charge.

But none of this matter. The people spreading this story were not interested in the facts. They were interested in feeding prejudice and hysteria. The original story was cleverly written to provide conspiracy theorists with enough ammunition to ignore evidence. It claimed that I took down the post after a few hours when I realized it received negative attention.

So when the occasional debunker would point out that there was no evidence of the post anywhere, it made little difference. When confronted with evidence that the story was utterly false, it only convinced many that there was a conspiracy and cover-up.

[13:04:56] Elizabeth Colbert, writing in the "New Yorker," recalled an experiment performed by two psychologists in 1970. They divided students into two groups based on their answers to a questionnaire, high prejudiced and low prejudiced. The students were told to discuss with each other controversial issues like school bussing and integrated housing. Then the questions were asked again.

The surveys revealed a striking pattern, Colbert notes. Simply by talking to one another, the bigoted students had become more bigoted and the tolerant, more tolerant. This group polarization is now taking place at hyper speed around the world. It is how radicalization happens. I love social media. But somehow we have to help create better mechanisms in it to distinguish between fact and falsehood. No matter how passionate people are, no matter how cleverly they can blog or tweet or troll, no matter how viral things get. Lies are still lies.

For more go to CNN/Fareed and read my "Washington Post" column this week, and let's get started.

Saturday was a banner day for Iran. It was a day that many of the Islamic Republic's status critics were certain would never come. The rogue nation or once rogue nation, depending on how you see it, was found to have complied with its requirements under the nuclear deal. It took part in an extraordinary prisoner swap with America and then major financial sanctions against the country were lifted and billions of dollars of its assets released.

We'll unpack all the details in this hour. But let's start with CNN's Nic Robertson who is live for us in Vienna where most of the action took place.

Nic, one of the things that struck me at least initially was while America media made a big deal of this story, initially the Iranian media had not because it was reported that there were many hard liners in Iran still opposed to the -- the deal. Explain the politics of Iran that allowed this to happen.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It's long been understood that the hard liners, those who sort of came to power through the revolution wanted to maintain a firm hand and control over the country. And a lot of people have questioned whether or not President Rouhani and his foreign minister, Javad Zarif, who have been behind negotiating this nuclear deal, were really a power within the country, were really strong voices within the country or merely a front put up by the Iranian government to improve their standing of Iran in the world to unfreeze those billions of dollars.

We heard in the last few hours from President Rouhani some quite striking words that I believe go to the heart of that. He talked and he appeared to have a message for the hard liners in his own country. He said who would have believed that our own diplomats and our own politicians can negotiate for Iran and come back on an essentially equal footing with the rest of the world and negotiate a good deal for Iran that diplomacy is good, that there is a win-win situation here. The diplomacy is the way forward.

That appears from the president of Iran to be a very clear message to the hard liners in his country and for the population that what has been achieved, the nuclear deal, with steps Iran has taken so far are positive, that there is positive benefit.

We've also heard during the process of waiting for the International Atomic Energy Agency here to announce Iran's compliance from the Iranian media. We heard leads that there was going to be a prisoner exchange from a lawyer representing one of the American-Iranian detainees. Prisoners held in the United States before his release. That release apparently held up according to the lawyer because the Iranians weren't sure, wanted to make sure that the assets that were being unfrozen were unfrozen, that money was flowing before the prisoner exchange could happen.

So the diplomatic footwork here has been obscured to us a lot of the time but for the Iranian president he is using it to bolster his moderate position in Iran right now -- Fareed.

ZAKARIA: Thanks, Nic. Terrific reporting as always.

This deal would not have happened without my next guest. Wendy Sherman was the United States' lead negotiator on the deal. She is now a senior fellow at Harvard's Belford Center and she joins us from Tel Aviv.

Wendy, welcome. Thank you so much for joining us.

WENDY SHERMAN, FORMER CHIEF U.S. NEGOTIATOR WITH IRAN: Thank you, Fareed. Good to be here on a good day.

[13:09:58] ZAKARIA: There are critics of the deal who say -- let's start with the prisoner exchange, which I know was a side negotiation that -- that Secretary Kerry was having. That this is Iran's pattern. It takes hostages, it does things that are unconscionable, should never have happened, and then demands concessions of it.

What do you then say to people who argue that the Iranian position has been one of doing things that they should not do even in the nuclear arena and then expecting concessions for undoing them?

SHERMAN: Well, I think that there's no question that Iran has done things that all of us think are wrong. They detained American citizens completely unjustly. They built up a nuclear program that even the IAEA, the International Atomic Energy Agency, said in the past had really been focused towards nuclear weapons. We know that they are destabilizing parts of the Middle East. They sponsor state sponsorship of terrorism. Their human rights record is not very good to say the least.

All of these facts are facts. But it is also true that not only the United States but the international community has sanctioned Iran repeatedly for all of these terrible actions. It has really harmed the Iranian economy. That's why, as Nic Robertson reported, you hear President Rouhani, who is about to face parliamentary elections and Council of Expert elections, talking about how this is good for the country because they need to write an economy that, quite frankly, is very deep in the hole.

So they have paid a price. A very big price for what they have done. And what I think we all should be focused on today are two very important things. One, American citizens are coming home, though we still have some more work to do in that area, particularly for Robert Levinson who is -- and his family. He's been missing for so many years. And we have a nuclear deal that is now being implemented where Iran has significantly reduced its program and it must remain entirely peaceful forever.

ZAKARIA: Wendy, when you negotiated with these people, did you get the feeling when you were negotiating with them, A, that they were trustworthy that they were when they would make, you know, when they would say something across the negotiating table, they stuck to it? And secondly did they make the power to make the deals that they were making as you went through this long process?

SHERMAN: Well, as Secretary Kerry and President Obama have said, this is not a deal about trust. This is a deal about verification. And so if my counterparts said something across the table, we needed to verify it. We needed to know that it was indeed fact that there had been compliance.

As you know, Fareed, there was an interim step called the joint plan of action as oppose to the joint comprehensive plan of action. It ended up being in place for nearly two years and the Iranians complied with every provision of that interim step which added confidence that they might indeed comply with a comprehensive plan, which has now been passed and now been implemented and all of the provisions appear to have been implemented and the IAEA will continue to monitor compliance.

As to whether they had the power, there were some times when they said things and then hard liners since Iran has hard liners and hard, hard liners did not back up where they were and they had to start again. They also watched in our country, in the United States a very vigorous debate where there was not agreement and indeed with our international partners around the world there was not complete agreement about going ahead with this deal.

So this was a very complicated negotiation, not just in the room, but with parties in our own country and all around the world.

ZAKARIA: Wendy Sherman, stay with us will you.

[13:14:10] Up next, I will dig deeper into the details of the sanctions relief, the prisoner swap. We'll be back with more from Wendy Sherman. And we are joined by a great panel when we come back.

(COMMERCIAL BREAK)

ZAKARIA: Let's dig into the details of the deal, the sanction relief, the prisoner swap more with a terrific panel. Here in New York, Brett Stephens is the foreign affairs columnist for the "Wall Street Journal," Karim Sadjadpour is a senior associate of the Carnegie Endowment for International Peace, and Joe Cirincione is a nuclear weapons expert and the president of the Ploughshares Fund. And the former U.S. lead negotiator Wendy Sherman remains with us from Tel Aviv.

Joe, let me ask you about the nature of these concessions and how far it puts Iran back. Because one of the things that I think hasn't been focused on enough is the plutonium facility that Iraq -- that Iran has cemented over. So most nuclear arsenals are plutonium. The United States' arsenal is 100 percent plutonium because plutonium gives you a bigger bang for the buck.

JOE CIRINCIONE, PRESIDENT, PLOUGHSHARES FUND: Yes.

ZAKARIA: And this was one that Iran has not just scaled back but completely destroyed.

CIRINCIONE: Yes. You know, many people didn't want us to negotiate with Iran on this deal. They wanted to go to war with Iran, to attack Iran, to eliminate these facilities. And that plutonium reactor in particular was one of the drivers that pushed the Israelis to say we have to attack now. Because once it goes operational, attacking then would spew radioactivity all over the region. And it was these negotiations at first stopped the construction of that reactor and now as verified just yesterday by the IAEA has completely gutted that reactor.

We have -- we've taken out the core of the reactor. The Iranians have drilled it full of holes, filled it with concrete. This reactor is now like the parrot from Monty Python. It is dead. It is gone. It is no more. It has passed on. These plutonium capabilities now permanently removed from Iran. They have pledged never rebuild it. And to make sure we have years, decades of international inspections. Instead of soldiers patrolling these nuclear complexes as some wanted, we have international inspectors making sure this is under lock and key, tied down for a generation or more.

ZAKARIA: And on the uranium front, you know, you remember Bibi Netanyahu a couple of months away from having enough enriched uranium to make a bomb.

CIRINCIONE: Yes.

ZAKARIA: Where are they now?

CIRINCIONE: Yes. Weeks away, he said, if they gone. So that bomb has now been completely drained of uranium. Bibi can rest assured they do not have the capability to build a bomb. Under this timeline, it would take them at least a year to restart those facilities, to make a material even for one bomb.

So the Fordow facility, that secret underground facility that Israeli bombs can't penetrate, that has been stripped of all uranium enrichment capability, about a thousand centrifuges are left, but they're not allowed to enrich uranium, which is easily detectible. And again, under cameras, inspectors lock down. Only about 500 centrifuges are left from the almost 20,000 they had. They ripped the rest of them out, took out the plumbing, took out the wiring. Put those centrifuges again under lock and key and camera in safe warehoused facilities.

[13:20:25] And the -- any uranium gas that they had, that most of that has been shipped out of the country so they are now years away from the capability of building a nuclear weapon.

ZAKARIA: Brett Stephens, you were a skeptic from the start. Are you still a skeptic?

BRETT STEPHENS, FOREIGN AFFAIRS COLUMNIST, THE WALL STREET JOURNAL: Sure. I mean, the enthusiasm that Joe shows for the deal reminds me of the enthusiasm a lot of people on his side thought for the Yongbyon agreed framework in 1994 where almost precisely the same promises were made about North Korea's nuclear program. And there are a couple of basic problems that we have here.

One of them is the quality of intelligence. Daniel Patrick Moynihan famously said intelligence must never be mistaken for intelligence. What we learned is time and time again we are surprised by nuclear development developments, whichever way they go, by the way. We didn't know that India was about to test a bomb back in 1998 starting a nuclear arms race in South Asia. John Bolton was mocked in 2003, 2004 suggesting that the North Koreans were embarking on a uranium enrichment facility. The facility was in fact confirmed by Professor Hecker of Los Alamos several years later.

So the -- people should be very muted in their confidence that Iran has completely dismantled not only the side of their program that we've seen, that we have uncovered, but also things that we might not know about. The second problem that you have with this deal is even as the Iranian fortunately have released their hostages, they've taken the biggest hostage of all, and that's the nuclear deal itself.

I mean, just consider Iran test fired two ballistic missiles in blatant violation of U.N. Security Council resolutions. The administration said it was going to sanction Iran for that. The Iranians said, hey, we will consider that a violation of the deal and lo and behold the administration quietly removed the sanctions. So Iran is going to use the threat of might it call nuclear snap back to constantly tell the West if you sanction us for our behavior, the deal is off.

ZAKARIA: Wendy, in Tel Aviv, you heard Brett Stephens on this issue of missile testing. What do you think happened? We have about a minute. So I'm sorry to ask you to do this briefly.

SHERMAN: Sure. All I'll say is that indeed the administration has said it will proceed with sanctions against Iran for its missile violations and I expect that they will. It takes time to put the evidentiary material together and one just doesn't do this on the back of an envelope. So in that I think Brett is entirely wrong.

ZAKARIA: And what about the more general point which is that the deal is one that the administration is going to want to preserve and is going to wink at some smaller Iranian violations?

SHERMAN: This is not an all-or-nothing response to Iran. The way that the deal is written, there can be calibrated responses if Iran doesn't do something major, but does something minor. There's an entire dispute resolution mechanism and an ability for the United States to unilaterally slap back sanctions on and to go to the United Nations and get multilateral sanctions back on without the ability of China or Russia or anybody else to veto that action.

This can be done in small steps. This can be done all at once. So we have a way to calibrate this and we have a way to respond to the violations that may occur. And I trust that we will.

[13:23:52] ZAKARIA: Stay right there. We will be back with much more on the Iran nuclear deal.

(COMMERCIAL BREAK)

ZAKARIA: And we are back with more on the Iran deal, the sanctions relief and the prisoner swap with Joe Cirincione, Brett Stephens, and Karim Sadjadpour.

Karim, you're a great follower of Iran's internal politics. And what I'm struck by is the hard liners in Iran have always been very powerful. They have -- you know, if you think about something like this naval incident that happened in 2007 when the British naval boat goes in. They're able to take them for 13 days. They parade them around. Ahmadinejad grandstands. He gives them free uniforms, their clothes back, and something like here to happen, you know, one day they return them.

The hostages whom they had taken have to be given back. And of course, you know, as -- you know, and the Iranian parliament, they said 300 concessions were made by Iran. Some of this is rhetoric I assumed but has the power of the hard liners weakened? Are we looking at a different Iran?

KARIM SADJADPOUR, SENIOR ASSOCIATE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: I think it's premature to say that, Fareed. This deal wasn't signed by the Iranians because of geopolitics. It was signed because of economics, the combination of sanctions, the drop in oil prices and the billions they're hemorrhaging in Syria I think forced them to take this decision.

And I think that's why some folks, people like Henry Kissinger, are concerned that a year from now when the sanctions are removed, the Western businesses are back in Iran, maybe oil prices have come up a little bit, are the Iranians going to continue to adhere to the deal. And we will see what happens.

ZAKARIA: But when you look at what it was that got Rouhani the support, is it public support? Is it at the end of the day people know that Rouhani is very popular, this deal is very popular or is it do you think that the supreme leader who ultimately has the power has decided to come to, you know -- come to terms with reality?

SADJADPOUR: Well, I think power in Iran, the power of a politician in Iran doesn't necessarily derive from the popular support. It's from the monopoly of coercion's. So President Rouhani is probably the most popular politician in Iranian. The Iranian people overwhelmingly want change. And we shouldn't underestimate their will for change. But we shouldn't also underestimate the will of the Iranian hard liners to crush change.

[13:29:57] I think, for forces like the Supreme Leader, the Revolutionary Guards, economic integration, rapprochement with the United States, poses more of an existential threat to them than continued isolation. And what we have seen in Iran since the 1979 revolution have been basically these moments of great expectations followed by years of disillusionment. So at the moment there are great expectations in Tehran. But the pattern here isn't necessarily a very optimistic one. ZAKARIA: Brett, what do you make of the fact that we have this peculiar situation where, in Iran, we are witnessing real politics? There are moderates, there are hard liners. The hard liners have some power. The moderates have some power.

I mean, frankly, there is a certain amount of similarity with the situation in the United States. I would underscore Iran is a dictatorship; the United States is a democracy. But my point is that you can see the politics. But in all our Arab allies, Saudi Arabia, Egypt, Jordan, you don't see any politics. It's an entirely monarchical or dictatorial system.

Within the Middle East, Iran seems to be the one where we actually can see a little bit of what's going on inside this black box. Is that a good thing?

STEPHENS: Well, we have managed politics in Iran, or you might even say stage-managed politics. There's going to be an election next month. The candidates will have already been selected in advance. So I'm not quite sure whether that's real politics or maybe you might call them Potemkin-style politics.

The Supreme leader ultimately was the person who had to give his assent to the deal. And, in fact, in giving his assent, he re- negotiated a part of the deal. So you have what you might call the illusion of participatory politics. But I'm not sure you have the reality.

Now, it's certainly true, when you look at the Arab world, that there you have a variety of monarchical or dictatorial systems, much to dislike but actually many things to see possibilities of hope.

Look at what's happening in the United Arab Emirates. Go to Dubai or go to Abu Dhabi and compare that to what might be happening just across the water in the Persian Gulf. It's a much more, sort of, open type of society.

The fact is we are -- for better or for worse, we are saddled or we are wedded to the alliances that we have. And we betray those alliances strategically, from a realist's perspective, at our own peril. How badly do we want to push an already nervous Saudi monarchy in the direction of rapid change, or perhaps say, we don't want to support you anymore, because Saudi Arabia, that monarchy, isn't just going to go off to Highgate or to the Riviera and leave a nice democracy behind.

We have an interest in making sure that our allies understand that we are going to remain committed allies to them despite the obvious defects of their social and political systems.

ZAKARIA: I want to talk about the -- the sanctions relief. Because I think it's going to be a little bit less dramatic than people realize, for a very simple reason. Oil is at $30 a barrel. Iran needs oil at $145 a barrel to balance its budget. So I don't see much of a windfall at the end of the day. SADJADPOUR: I think that's right. And I think that's why the popular expectations people have that their quality of life is going to significantly improve may -- may be disappointed. You know, Iran is probably the largest population in the world which is still isolated from the global economy. You can't use your credit card in Iran. So there's huge interest in Iran from Asia, Asian businessmen, from Western businessmen.

But I think there is also an important litmus test here, which is the case of Siamak Namazi, who is the last remaining Iranian-American hostage in Iran. He's someone who was an energy consultant, which is very well known by major oil companies, major international corporations. When you have someone like that languishing in an Iranian prison, it's going to continue to send the message to Western businesses that this country isn't yet ready for change.

ZAKARIA: My thanks to our panel.

[13:34:11] Next on GPS, we will delve in to American politics, the Donald, Hillary Clinton, the 2016 presidential race, the state of the Republican Party, the State of the Union. I will talk to another great panel when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I stand here as confident as I have ever been that the State of our Union is strong. Thank you. God bless you.

(END VIDEO CLIP)

ZAKARIA: That was President Obama on Tuesday night wrapping up his final State of the Union Address. It was a speech that crowed about some successes, lamented some shortcomings and honed in on some serious flaws in American politics today.

As of today, President Obama has exactly one year and three days left in the office. So what is he going to do? What can he do during that time? And what to make of the still enormous field of want to be presidents out there on the campaign trail?

To talk about all of that I have a great panel, David Frum was the speechwriter for George W. Bush, he is now a senior editor at the Atlantic. He is on the cover of the latest edition of that magazine with his piece "The Great Republican Earthquake" which is terrific. Rana Foroohar is "Times" assistant managing editor as well as CNN's global economic analyst. And Sean Wilentz is an author and historian, a professor at Princeton. He wrote a great recent "Rolling Stone" article called "Why the 2016 Election Will Be One of the Most Pivotal Moments of Our Time".

So with the title like that, Sean, you first have to explain why is the 2016 election truly pivotal in the way that you say? Every one says every election is pivotal.

SEAN WILENTZ, PROFESSOR, PRINCETON: Every time. And this is really is. But now it's really true.

Well, look, this is a House divided election. The process, a cycle of radicalization which David and among others has written about it very, very well is been going on to the Republican Party for a very long time. When you seeing the fruits of that in the primary season and the divisions within the Republican Party. But nevertheless, a base which had been you know important to elections in the past has now in effect taking over the -- as a driving force in the party as never before. That is pulling the party to position to where it really hasn't been.

The Democrats, they've had struggle for decades coming out of the Reagan period. They didn't know what they were about. They finally figure it starting under Bill Clinton. They finally got into that point. But the division between the parties now I think is fundamentally so great, that's number one.

[13:40:07] Number two, the balance of power, Republican Party holds controlled most in the State Governments, most in the State legislatures has party, you know, control throughout American Government. If the Republican Party with the presidency win back, you know, wins and hold the Senate, the House almost truly alter (ph) so. The Supreme Court will then probably go to the Republican Party that's all going to all one way, all of the government will be in the hands of Republican Party.

ZAKARIA: Because it's probably three Supreme Court justices are going to be appointed in the next president --

WILENTZ: Quite likely.

ZAKARIA: Do you think that the fact that historically parties have found a very difficult to win a third term in office means that even with all the things you talked about the Republican Party, it's still hard for Hillary Clinton to win because it is a third term for a party which happens, I mean it happened with Bush Sr. 25 years ago. Before that, you have to go to FDR's third term to find the third term for a party.

DAVID FRUM, SENIOR EDITOR, ATLANTIC: It's hard to do. And the Democrats have special problem which is in the process of polarization that Sean describe, it's more intense on the Republican side. But it's real in the Democratic side.

And so you see a figure like Bernie Sanders who is the kind to figure that Democrats just kept far away from the levers of power, always in the past. He is now he may well win the Iowa caucuses. He may well win in the New Hampshire primary. It's unlikely he'll be the nominee. But he's pushing Hillary Clinton who is an example of the kind of politician, whom Democrats have historically preferred him. Operator, somebody knows how the game is played.

Her party is not as enthusiastic about her. So it's a challenge for the Democrats. But there is a real possibility of that Clinton walk shining though in either a literal or practical Republican split. It is going to be very hard for the Republicans to pull together that divide between as Sean said a base of the party that has wise dock to the game. You're not delivering for us. And party elite that is determine to yield as little as possible to the economic concerns of his base.

ZAKARIA: Just summarize for a second that great cover story that -- because you talk about this division, the base is populous, the elite is essentially plutocrats.

FRUM: Right. The Republican, the typical Republican voter it's neither rich nor poor but is white and is older. And that -- and is disappointed about his or her economic standing. They are not as well off today as they thought in 1998, they would be today. They are more -- they are on the verge where I just began retirement. They need Medicare and they need social security much more than the 1998 they thought they would.

And their party is not committed to helping them with that. It has other priorities. And --

ZAKARIA: Such as?

FRUM: Such as big tax cuts, such as immigration reforms, such as managing global trade. And some of these priorities are important responsibilities. The global trade system has to work obviously for everybody. But they -- that that base voter has -- here's the one factor to keep in mind. Typical American household makes about $400,000 a year less today still today after all these years of recovery than it did in 2007. And it makes even less than it did in 1999-2000.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, I think the economy is really was at the heart of the polarization in both parties. You know, Sanders and Trump are in some ways the different sides of the same coin. You do have this economy that's incredibly bifurcated. And, you know, we see that that's created Trump on the right. But actually I think the fact that Sanders is ding well really speaks to the fact that the Democrats don't have a cohesive answer to all these structural changes either, you know. I mean, Hillary is very establishment. And establishment economic policy on either side isn't really what people are looking for right now.

ZAKARIA: But what about Hillary as a woman? Does -- I mean if the party -- if the electorate is as evenly divided.

FOROOHAR: Yes.

ZAKARIA: And Hillary Clinton can excite women with the real prospect, this is the first in history.

FOROOHAR: You know, I'll tell you something Fareed. I think that that matters more for women of a certain generation. I don't think millennial women care that much that Hillary Clinton is a woman. I think that there are a lot of female voters that are really much more concerned about their basic economic issues. And many of them are heads of household now. And many of them are very worried about the kinds of things that David was talking about much more so the needing to vote for a woman. I really think that that's being over estimated as an issue.

[13:44:23] ZAKARIA: We're going to have to take a break. When we comeback what about that State on the Union speech and what about the actually State of the Union. Is Obama right that America still strives the world like a colossus, when we comeback.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Any one claiming that America's economy is in decline is peddling fiction.

(END VIDEO CLIP)

ZAKARIA: And we are back talking about American politics and economics with David Frum, Rana Faroohar, and Sean Wilentz.

Rana, when you heard the president talk about the United States boasting about the economy? I mean, certainly compared with all the others, United States is growing twice as fast as Europe, four times as fast as Japan. Brazil is imploding. Russia is, of course, imploding. China is slowing down. The United States does look pretty good.

FOROOHAR: Well, there's two ways to look at it, right? There's the argument that the U.S. is the prettiest house on the ugly bloc, that is the global economy and that's legitimate. You know, our growth has been really robust. The U.S. amazingly has outgrown a number of emerging market countries. It's incredible that we're in that position.

But the other way to look at it is that the U.S. just so far and part because of the Feds money down in part because of low interest rates hasn't really felt the full force of the global slowdown. I think that's going to change this year. I think the U.S. is going to be affected by the major slow down in China. And I think that you may see not just a 2 percent economy but even a 1 percent economy.

ZAKARIA: And to what extent is that part of the problem, we had the disconnect which is, you know, if you look at some of the data, it is morning in America to use Ronald Reagan's famous reelection campaign slogan. But a lot of people don't feel like its morning in America.

WILENTZ: Well, for most people it's not. The analogy I like is the least 30 shirt in the back of one but.

FAROOHAR: Right, explain it anyways.

WILENTZ: But the American economy is slowing down, but the most was political scientist tells us is the most important economic statistic for projecting elections. It's not the growth of the economy, not even job growth. It's personal income growth in the 12 months before voting day. If that is stagnant for most people, that creates trouble for the incumbent party specially the time of raising terrorism fears. [13:50:10] And look, United States is committed to a series of wars all around the planet. You want to run on peace and rising incomes and what the incumbent parties going to be running on is maybe not all at war but conflict and stagnant (ph).

FAROOHAR: There's also not only wage is stagnant but behavior has shifted. If you look at where the personal savings rate is right now, it's much higher than it should be based on historical recovery. So something is changed. People feel uncertain. They don't really feel we're in a proper recovery.

WILENTZ: Well, the state of the union though I thought it was a remarkable speech about politics, the political system. It wasn't so much about well, there are wonderful things you've done but the state of the economy is. It was there. But mostly it was almost reflections on the state of the political -- of our politics and I complained about it.

I took a debate now. I wrote a piece about the house divided so maybe I was reading into that. But he mentioned Lincoln. And he mentioned side of Roosevelt. And he talked about how they had somehow brought the country together. I don't think that's what happened. I think that Lincoln got elected in the south succeeded. And I think the FDR got elected and just called, you know, the most hateful man in American life. But that's what happened to Obama. If I were a Democrat watching a speech, I would be yelling at the T.V. set.

ZAKARIA: Let me tell you why.

WILENTZ: But because what Bill Clinton does in his last State of the Union which is in 2000, what he did and he went on very long. But he framed the election for a successor. He said, here are bunch of great things that you could have. I don't have time to do them. But if you vote for my party, this is what you get. And if you vote for my party this is what you lose. Professor Barack Obama delivered --

FAROOHAR: Ouch.

WILENTZ: -- a really thoughtful considered highly well organized, really interesting meditation on the future of the American way of life. If you're a Democrat who's running for office, what about the good stuff you get if you vote for us and the bad things that happen to you if you -- I mean, you've got the biggest T.V. audience of the year, use it for us. I don't know why it's so interesting. I have some more thoughts and reflection that I could share.

FAROOHAR: They are exactly magical realist is one example.

WILENTZ: Yes, as a professor I could really -- actually it was --

ZAKARIA: Well, Obama be seen as a kind of president like and I want to be clear what I mean by this, but like Lincoln and Roosevelt who fundamentally changed the trajectory of American and generated a lot of opposition. I'm not talking about the specific, you know, virtues one way or the other. WILENTZ: Well, it's very different kind of president first of all. But look, the answer to the question is a lot of it depends on who gets elected. I mean, if the Republicans get in, all the things and many of the things that Obama manage to shift are going to be gone. So, he's got to be really hoping for -- regardless of what the speech may have sounded like he better -- he's going to be hoping very, very hard that with the Democrats.

ZAKARIA: Do you think the Democrats should campaign on the Supreme Court issue?

WILENTZ: Well, I think it's an issue. It's a very powerful issue, sure. I mean, its part of what the House divided is all about. That will change American political life or American life for generation or two, very long time, so sure, absolutely.

ZAKARIA: Is your argument Rana, that if the Central Bank is also key to the success, to the prosperity that the at least the United States has had relative to others? Is the shift in Central Bank policy the fact that the Fed raise rates, is that signaling the kind of the beginning of the end this era and? Is that why China has, you know, the visible science of Chinese slowdown have happened?

FAROOHAR: Yes.

ZAKARIA: We've known about Chinese problems for awhile.

FAROOHAR: Right. That's right. Absolutely. Well, you can look at volatility index hasn't see. The minute the Fed start to pull back on their quantitative easing program, that's for money down. Volatility and the stock market increase. When they did the rate hike in December, also more volatility, and yes, the Chinese market crash is certainly a part of that.

The Chinese market crash though is also about the fact that nobody really knows what's going on in Beijing. Chinese is world's second largest economy and what happens there, matter so much more than it did let's say in the late '90s during the Asian crisis when the U.S. could just power ahead. Now, if China slows down, it's really going to affect the U.S. which is the worlds only other growth engine.

ZAKARIA: So the odd thing is what Trump keep saying he wants to -- you have screw the Chinese and make the blues, if that happens do you think that Republican electorate understands will pay the price.

FRUM: You know, Trump communicates something. There's a poetry, well, that's maybe not the word I want, there's a tone behind the words. And what Trump is above all of things done even more than to blame others and the cynophobia. But what is above all of selling is the promise of executive competence. And you may not agree with this, but millions of people have over many years watched him play on television, the part of the James T. Kirk of the American economy, America's most successful CEO, the guy who gets things done.

And Trump then gleefully but people will ask some questions that like will you change the constitution to eliminate birth rights -- I'm sorry, will you eliminate birth right citizenship. He doesn't get to the 48th amendment of America, yes, I'll do it. It's done.

[13:55:15] WILENTZ: And it will be terrific.

FRUM: It will be terrific. But that, you know, country people feel either no one is in charge or the people in charge aren't looking at for me. Here someone says I'm in charge, I'm competent, I'm tough, I'm looking out for you. It may not be true but it's still better than what else they hear.

ZAKARIA: Yes, and that's -- you're exactly right. You know, when he's asked about anything in economic it's astonishing to me a businessman.

FAROOHAR: Yes.

ZAKARIA: It's not really presented in economic plan of any kinds. There's no program. He just says that's my thing. That's the economy is might think, I --

WILENTZ: But he's a good businessman. He has did thing across.

FAROOHAR: I mean, but not even really. I mean, you know, if he would have put his money in an index fund, if he's doing better than he has so far.

WILENTZ: Well, that's true. That's true.

FAROOHAR: So I'm not sure if this acumen on that either.

FRUM: He's a marketing man.

WILENTZ: Exactly.

FRUM: He's one of the world's greatest marketers. You -- he's very -- one of the -- is very hard to brand condominiums. There are three brands in the world of condominiums, Four Seasons, (INAUDIBLE) and Donald Trump. That's an accomplishment.

WILENTZ: That's right.

ZAKARIA: Thank you all very much for fascinating conversation.

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[14:00:00] ZAKARIA: Thanks to all of you for being part of our --