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FAREED ZAKARIA GPS

Reviewing Obama's Overseas Trip

Aired July 27, 2008 - 13:00   ET

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


FAREED ZAKARIA, HOST, GLOBAL PUBLIC SQUARE: Welcome to the GLOBAL PUBLIC SQUARE. I'm Fareed Zakaria.
You know, two weeks ago Barack Obama was on this program, and I asked him about the trip he was about to go on. Take a look at this.

(BEGIN VIDEO CLIP)

ZAKARIA: You're going to Europe and to the Middle East. You know that in places like France you have 85 percent approval ratings.

Isn't that going to make some Americans very suspicious? If all of Europe likes you, France likes you, there must be something wrong.

SEN. BARACK OBAMA, D-ILLINOIS, DEMOCRATIC PRESIDENTIAL CANDIDATE: Well, I tell you what. You know, it's interesting. As I travel around the country, here in the United States, I think people understand that there's been a price to the diminished regard with which the world holds the United States over the last several years.

That's something that bothers people. It's something that's brought up in -- you know, when I'm doing a town hall meeting in small rural communities, invariably, somebody will raise their hand and they'll say, "You know, when are we going to restore the respect that the world had for America?"

(END VIDEO CLIP)

ZAKARIA: So, how did he do? I'll be asking a couple of the most interesting people in Europe about that continent's seeming obsession with Obama.

And then, of course, this question: What if McCain wins?

So, I hope you'll stay with us, and let's get started.

So, Obama has been in Europe. What do they think of him?

I've invited a Frenchman and a German to talk about that visit, as well as other issues.

Joining me now, the editor and publisher of the leading German magazine, "Die Zeit," Josef Joffe, and the French intellectual, Bernard-Henri Levy, the author of "Who Killed Daniel Pearl," who is often identified in France by his initials, BHL.

Mr. Henri Levy, tell me, what do you make of the Obama mania that seems to have swept not just France, but all of Europe?

BERNARD-HENRI LEVY, AUTHOR, "WHO KILLED DANIEL PEARL?": All over Europe. If he was supposed to be the president of Europe, he will be elected by 85 percent -- even maybe on the North Korean score, you know, 90 percent.

So, there is a real Obama -- Obamania. And if you ask me what is the reason for that, I would say that he is the re-embodiment in one person -- in one only, in one single body -- of the two greatest heroes in our eyes of American history, modern American history, who are Martin Luther King and John Fitzgerald Kennedy.

Obama equals the King plus JFK in the eyes of the French, the Germans, the Spanish, the Italians.

This is one of the keys of this incredible popularity as far as I am concerned, at least. This is the way I see the thing.

ZAKARIA: Jo, is this Martin Luther King and Kennedy come back to Earth?

JOSEF JOFFE, EDITOR AND PUBLISHER, "DIE ZEIT": Well, certainly, you know, if you look at Obama, he imitates Kennedy down to the inflection of his voice, the tilt of his head. So, there's a conscious, self-conscious kind of mimicking of Kennedy.

I think Levy is right. But I would put it a little bit differently. I think Obama is not so much a candidate here, as he is a canvass, a vast surface for projecting Europe's fondest desires onto America.

And of course, that -- it's projecting dreams and desires. This is how we want America. And of course, Obama is going to be an American president who is going to pursue American interests, and who will clash with that dream the moment he's inaugurated and has to do concrete politics.

So, we are set up here for a road accident. There's this vast desire and the inevitable disappointment down the road.

ZAKARIA: Is there going to be a disappointment? I mean, at some level there has to be.

LEVY: There has to be. But again, I agree with my friend Jo, but not so much. Of course there will be disappointment -- maybe not to this extent.

Why? We see in Europe Obama as a sort of mixture of realism and idealism. You had with the neocons a sort of extra, ultra idealism going to madness, going to stupid wars, going to stupid foreign policies.

You have a tradition of realism...

ZAKARIA: In Europe, yes. LEVY: ... in Europe, and also in America, if you go to Buchanan (ph), or if you go even to Kissinger, which goes too far in the direction of realism, egoism, turning back to the real vocation of America.

So, Obama will be a sort of middle, midway between the two. This is a way where we Europeans see him, as a mixture of the neocons and Kissinger, in a way, if I dare say.

And this, he will embody that. He will not disappoint that. He will not be a new (ph) ultra (ph) Wilsonian. And he will not be an new (ph) ultra (ph)isolationist or Jacksonian, or whatsoever. He will be this mixture.

There will not be so much disappointment.

And I would add something. We are not ready in France -- this is one of the paradoxes of the situation -- I am not sure we are ready to elect a black president, or even a president coming from any minority. We have an Arab minority in France. It is not tomorrow that we will have a president coming from Arab minority.

So, we are dreaming for America -- thank God. I am glad of that -- or for president which we would not get for us. This is one of the strange paradoxes of the European situation regarding America today.

ZAKARIA: Now, I have to bring up the fact, of course, that there is another candidate in the American race, John McCain.

Jo Joffe, you know McCain. You've met him several times.

Is it your sense that it would be that he's just not resonating in Europe? European elites seem to know him at the governmental level and trust him.

But is he just -- what do Europeans think of McCain? What do you think he represents? This whole extraordinary story of his personal courage, his political courage -- is that not resonating at all?

JOFFE: Strangely enough, it isn't. Strangely enough, McCain is presently as absent in the European media as he seems to be in the American media. He simply seems to have disappeared.

But you know, when -- that's recalling what Bernard just said, that Obama represents to him, or to France, that wonderful mixture between realism and idealism. Well, that's McCain, isn't it? I mean, McCain is by no means a Bushy, by no means a Cheneyite, by no means a neocon.

He's a kind of measured man who is in the American tradition, which favors democracy.

ZAKARIA: Bernard, let me ask you about France, though, because we thought we were seeing a new France with the election of Nicolas Sarkozy, a France that was more comfortable with, frankly, Bush and Bushism -- a tough France, a France that wanted to be, you know, not the critic of the United States, but the partner.

And what you're describing, though, seems to be a France that remains very, very unhappy with Bush and hoping for Obama as the salvation.

Where does Sarkozy fit into all this?

LEVY: The entire world is unhappy with Bush, my dear Fareed, not only France -- everybody. First America, then Europe, then the rest of the world knows...

ZAKARIA: But not your president -- not your president.

LEVY: Even our president. I suppose that he says it, he has to say it in diplomatic terms. But he knows that...

JOFFE: Not my chancellor.

LEVY: ... he knows that Bush was the worst president you had since a long time.

There was one point Obama made, which is so clear and so true. Obama says, one of the reasons why I was against the war in Iraq was not because I am against the war on terror, but Iraq was not the topic. Obama says the topic was -- was and is -- Afghanistan, Pakistan, which are the real parts of the world where you have the Islamist ideas with the weapon which go with.

Obama says that, which is the idea of Sarkozy, too, and which are the ideas of the French people, too.

So, I would say that the change today in France is that you have less anti-Americanism. This stupid passion, nearly a religion, which is anti-Americanism in France is on the decline -- maybe because of Sarkozy, and maybe because we refound our temper, our mind. We were -- OK.

And what I would say is that, if Obama is elected, it would be a new face for America, and a new face to an extent that anti- Americanism will decline again.

As for McCain, Jo is right. He's a great guy. The only problem is that he does not -- out of America, he does not exist. In terms of storytelling, he lost. He lost the battle of storytelling. He lost that already. Maybe he will not lose the whole battle, but this one he lost.

ZAKARIA: And we will be back right after this.

(COMMERCIAL BREAK)

ZAKARIA: And we are back with Josef Joffe of "Die Zeit" in Germany, and Bernard-Henri Levy of France.

Jo, when looking at the reaction that Europeans are having to Obama, your country has also elected a chancellor who proudly claims to be a supporter and admirer of George Bush.

So, why the craze for Obama, if there seems to be a greater degree of sympathy for Bush?

JOFFE: Well, you have to distinguish between governmental opinion and public opinion, and what I would call elite opinion or the chattering classes.

If you take the chattering classes, anti-Americanism is rampant, to an extent which I have not seen in the long history of watching trans-Atlantic relations, which leads to one conclusion right away, that anti-Americanism is something bigger, stronger and older than Bush. And so, to focus on Bush may mislead us about the phenomenon. That's one thing.

The other thing about, to come back to the governments, we talked about Sarkozy, we talked about Merkel. Look, these guys have -- these two, and above all, have understood something very basic, which their predecessors -- Gerhard Schroeder in Germany and Jacques Chirac in France -- did not understand, that it's not a winning game for Europeans to have hostile, bad relations with the United States.

It's the first thing that somebody like Merkel did when she came into power in 2005, is never mind the emotions, never mind who likes or dislikes whom, I have to improve my relationship with the United States.

ZAKARIA: Do you think, Bernard, that the reality is that, when the United States decides to do something more robust militarily, the Europeans will once again start screaming murder, and so that this tension is inevitable?

LEVY: The reality is that in Europe, number one, you have not to forget that we have an actual, recent experience of war. This is a thing which has to be said in excuse of Europe.

We know what war is. We had it in our territory, on our ground, between our nations. And the relationship between Germany and France, for example, is a miracle compared to what happened 60 years ago.

This is first thing which America did not know since September 11, and since the Civil War, war on your ground.

Number two, we have an excessive reaction to that. And Europe is, that is true, the fatherland of an excessive, demagogic realism -- a sort of permanent appeasement. We have such an experience of war, that for us -- for the majority of us -- any war is the very embodiment of evil.

So, experience of war, which has led us to an excess of religion of peace, of a taste of, of will (ph) of appeasement. This is one of the main differences between France and America.

And number two, the breathing of history which was the real wind of Europe for such a long time, has gone away.

ZAKARIA: Meaning...

LEVY: The history -- the history make, the feeling to make the history, the feeling that there is a history with some stakes, with some oppositions, with some enemies, which you have to defeat or to reduce. This disappears more and more from the European head (ph). And what...

ZAKARIA: So, Europe thinks it is no longer a participant, but really an observer of war.

LEVY: Observer of history.

And Europe believes, more than that, that in the reality you have not -- you have nothing left which could be called history, with real enmities (ph), real vision of the world opposite, and so on and so on.

We have a sort of eirenic vision of the world in Europe. We have the feeling that the things will get into order anyway, and that any form of too strong opposition is wrong.

So, that is true. When Barack Obama, if elected, shows his muscles in front of Iran, for example, or in front of Pakistan -- as he said, as he already announced -- you will hear some voices in Europe to say, please, peace before all. And this is our illness in Europe.

JOFFE: Let me just add something to what Bernard said, and which I think is important.

When you are the weaker party and you deal with somebody who is very, very strong and very big -- it's Mr. Big rather than Mr. Bush -- you either want control over that power, or you want that power to be like you.

And so, if I read some of the most interesting fantasies in the respective (ph) world press around here, you get this image of Obama which he isn't. He's kind of social democratic, he's kind of peace minded, he's U.N. minded. And he will be -- and that's the most interesting thought -- he will preside over weakened and chastened America after Iraq.

And therefore, we'll be able to like America better, and him better than Bush, because America will be more like us. But, of course, America will never be like Europe. It will always be different.

It's the daughter of Europe, as de Gaulle once said. But that daughter left home in the 18th century and never came back.

ZAKARIA: And I thank both of you, Josef Joffe in Germany and Bernard-Henri Levy, for a fascinating discussion.

(COMMERCIAL BREAK)

ZAKARIA: The first military tribunal since World War II began this week at the Guantanamo Bay military base in Cuba, a showcase trial for the war on terror -- the first of the enemy combatant prosecutions that the Bush administration has spent many years and millions of dollars planning.

Government lawyers fought all the way to the Supreme Court for the right to stage this trial. So, you're probably thinking that it would all be worthwhile, because we're going to prosecute the brutal terrorists who perpetrated the 9/11 attacks.

But the man on trial, Salim Hamdan, may turn out to be a big nobody.

Joining me now is Jonathan Mahler, a journalist for the "New York Times," who may know more about this case than anyone. He has written a book about it called "The Challenge."

Welcome.

JONATHAN MAHLER, "NEW YORK TIMES MAGAZINE" WRITER AND AUTHOR, "THE CHALLENGE": Thank you.

ZAKARIA: So, who is this guy that they're prosecuting?

MAHLER: His name is Salim Hamdan. And everyone agrees that he was a driver for bin Laden. No one disputes that. His defense lawyers will acknowledge that, as well.

ZAKARIA: So, he's the guy driving bin Laden's car...

MAHLER: Correct.

ZAKARIA: ... basically (ph).

MAHLER: Correct.

Now, the government would say that he was a bodyguard and a close associate of bin Laden's, who was his personal driver, who carried a weapon, and who also transported arms as part of his role as a driver -- and who took bin Laden around to training camps and to other places where he was, you know, inciting people to violence.

ZAKARIA: Am I right that in Afghanistan -- those parts of Afghanistan -- schoolteachers carry guns.

MAHLER: Correct, correct.

ZAKARIA: This is not very unusual.

MAHLER: Correct. It's not unusual. It was not unusual to carry a weapon.

ZAKARIA: Did he have any role in planning the 9/11 attacks?

MAHLER: That seems also to not be disputed, that no one thinks he does. No one believes that he was directly involved in any of the attacks. The argument may be made, and I think will be made by the prosecution, that he did have prior knowledge, perhaps. I think the defense is going to dispute that.

ZAKARIA: Why don't we use all this time, money, energy and resources to prosecute some of the people who actually planned the attacks, who the United States does have?

MAHLER: That's a very good question. And the question really is essentially, why Hamdan? Why did the government choose Hamdan? And it's a decision they made years ago, because, keep in mind that these trials were first authorized by President Bush, really, right in the aftermath of 9/11, in November of 2001, when he issued a military order creating -- authorizing the creation of military tribunals -- what would actually be the first military tribunal since World War II.

But Hamdan's defense lawyers challenged the constitutionality and the legality of these military tribunals. And that case was sort of tangled up in the courts for years. It went all the way to the Supreme Court in 2006.

Hamdan's lawyers won, which force the government to have to reconstitute the trials.

So, the decision to actually try Hamdan was made many years ago, in 2003, in fact, before -- you know, certainly before we had some of the higher value detainees in custody.

But really, the real reason why the government chose him -- there are several reasons. One is that he did have a direct connection to bin Laden. And this was -- this was, you know, in the early going, to have someone who had a direct connection, you have to keep in mind that most of these guys who were being swept up in Afghanistan, you know, had seen bin Laden, but certainly didn't work for him.

He also had worked for bin Laden for many years. He'd worked for him from 1996 through 2001. So, he hadn't just been with him in the era of 9/11, he had been with him for the al Qaeda attacks in East Africa, the Cole bombing in Yemen. So, he was someone who had a sort of longstanding relationship with bin Laden. But...

ZAKARIA: Now, why not use him as a witness? In other words, wasn't he willing to cooperate at first? Why is he being interrogated and tried in this manner?

MAHLER: That also is a very good question, that the government -- but the government chose -- the government could certainly have offered him a deal and tried to persuade him to actually testify at other trials of bigger fish. But they didn't go that route. They decided to try him instead.

And another reason, just to complete the circle, why they chose him was that he had been in U.S. custody throughout his detention. So, he had never been rendered to a foreign country.

So, and at least it appeared as though he had never been tortured. So, the government, I think, felt -- the prosecutor who really singled him out -- felt that he at least wouldn't have to worry about the defense arguing that, you know, that he'd been tortured, and that, therefore, his statements were unreliable.

Of course, as it turns out, the very first day of the trial, the judge disallowed some of the evidence, barred some of the evidence that had been collected in Afghanistan during his interrogations. In fact, the judge determined that those statements had been coerced from him.

ZAKARIA: Now, what's at stake here? What do you think is likely to happen? Why does it matter?

MAHLER: Well, quite a bit is at stake, because this is the first trial of these military commissions, that the Bush administration has put so much time and energy into prosecuting, into making, into realizing.

And whether or not -- the big question, I think, going forward is whether or not they will be perceived as fair, whether they'll be perceived as worthwhile. And certainly what will happen in the next administration -- because, you know, one has to assume that we're not going to have time for more than one or two of these trials before Bush leaves office -- is going to be determined, I think, largely by what happens down on Guantanamo Bay over the course of the next several weeks with Salim Hamdan and whether it seems as though he's been given a trial, whether it seems as though it's worth going ahead with these things.

ZAKARIA: And it's fair to say, isn't it, that nobody really argues that he's a major figure in al Qaeda.

MAHLER: That is correct. Not even the prosecution would say that he was a senior figure in al Qaeda. They would say that he was a close associate and a body man for bin Laden.

ZAKARIA: But a close -- what they seem to mean by close associate was that, at best, he was a bodyguard.

MAHLER: That's correct.

ZAKARIA: Not in any way involved in the conception...

MAHLER: That's correct.

ZAKARIA: ... execution of the attacks.

MAHLER: That's correct. And it's...

ZAKARIA: So, we are spending all this time prosecuting somebody who's probably a driver and may at best be a bodyguard.

MAHLER: Yes. I think that's right. That's right.

ZAKARIA: Jonathan Mahler, thank you very much.

MAHLER: My pleasure.

(COMMERCIAL BREAK)

ZAKARIA: The economy sputters, the campaign continues, and India will now sign a nuclear deal.

Joining me to discuss all this at the GPS roundtable, the creator of the Emmy nominated film "Faith Without Fear," Irshad Manji of the European Foundation for Democracy; Joseph Stiglitz, who won the Nobel Prize for Economics in 2001; and the Washington bureau chief of "The Economist," Adrian Wooldridge.

Joe, you won the Nobel Prize, in part for your work on how markets don't take in information, and kind of malfunction. Is what's going on right now a classic case of this?

JOSEPH STIGLITZ, NOBEL PRIZE-WINNING ECONOMIST: Exactly. And a classic illustration of why you need government regulation, why markets are not self-correcting. Or let me put it more accurately, they self-correct, but before the correct there's an awful lot of damaged property out there, and a lot of suffering in the economy that's totally unnecessary.

So, this is the kind of episode that my research helped illuminate.

ZAKARIA: Is Ben Bernanke and Hank Paulson -- are they doing the right thing now?

STIGLITZ: Well, they've inherited a mess. And clearly, they should have taken action earlier. But clearly, a lot of the problem goes back, as I say, to Greenspan, to what the Fed did in earlier days.

ZAKARIA: And keeping money easy and keeping interest rates too low?

STIGLITZ: And in lax regulation. I mean, this was something so clearly -- you could see the problems coming. A lot of people did see the problems coming. I talked about it. A lot of people did talk about it, but everybody wanted to look the other way.

There was a party going on, and nobody wanted to be a party pooper.

ZAKARIA: Adrian, your magazine, "The Economist," is reputed to have been one of the forces that pushed for free markets, lower taxes, less regulation.

Do you think that the tide has turned, and politically, people are looking for a more active interventionist government these days?

ADRIAN WOOLDRIDGE, WASHINGTON BUREAU CHIEF, "THE ECONOMIST": Well, we certainly argued for those forces of deregulation in the past. Although, in this week's issue, we did actually argue for the nationalization of Fannie Mae and Freddie Mac on the grounds that it's a silly system, which gives all the benefits to the private sector, and then all the risks are socialized. I think...

STIGLITZ: It's a kind of partnership, public-private partnership.

ZAKARIA: It's publicly funded...

STIGLITZ: But not one that works.

IRSHAD MANJI, AUTHOR, FILMMAKER, EUROPEAN FOUNDATION FOR DEMOCRACY: It's the wrong kind.

WOOLDRIDGE: Well, Martin Luther King once said that the United States should have socialism for the rich and free markets for the poor. And it does seem that we've had that.

I think there is a mood, a significant change in mood, towards more regulation. But I would caution that there is a distinction between the financial sector and other sorts of business sectors.

I think what we've seen is a series of crises, irrational exuberance in the financial markets, and certainly much more worry about the way they operate, and a sense that we need to regulate them, to do something to stop these perpetual overreactions.

But I see less of a sense that we need to be moving towards more regulation, let alone nationalization, within the Main Street -- within Main Street sort of businesses.

STIGLITZ: Can I just point out. This is not the first crisis, the first problem we've had in our financial sector.

ZAKARIA: No, we've had endless...

STIGLITZ: We've had endless crises. And these are in the well functioning -- so-called well functioning economies.

And we had the bailout of S&Ls...

WOOLDRIDGE: Absolutely.

STIGLITZ: ... in '89. And then we had the problems in the late '90s, then Enron...

ZAKARIA: And in each case -- in each case the taxpayer ends up paying the price. Is that fair to say?

STIGLITZ: In most of these cases the taxpayers. In many cases, like in the Enron, it's the retired people who are taken advantage of.

But in any case, the people who perpetrated the problems walk away often with billions of dollars, and ordinary individuals are left holding the bag. MANJI: Well, and it's precisely because there has been a series of these sorts of cataclysmic events, in America in particular, that I'm at least sensing -- I don't know about the rest of you -- that ordinary Americans are finally waking up to this, that there is a profound unfairness, you know, embedded in the system.

Some years ago, Thomas Frank wrote a book called "What's the Matter with Kansas," in which, in part, he argued that, you know, people in middle America tend to vote against their economic interests. And why is that?

Today, I don't think that's the case. And in fact, I'm hearing from a lot of ordinary people in places like Iowa, that whereas they once would have been afraid of a Barack Obama, for example -- and by the way, not because of his skin color, but because of his politics, economically as well as socially...

ZAKARIA: Too left wing.

MANJI: ... they are -- too left wing.

They're not interested in labels anymore, Fareed. They are now looking at who's going to deliver for the ordinary people.

And so, in some ways, you know, the disasters of the last few years, and certainly few months, may have actually shed light on what exactly needs to happen going forward.

WOOLDRIDGE: But at the same time, Obama is putting forward a very cautious, centrist, pragmatic policy.

MANJI: Right.

WOOLDRIDGE: And if you're voting for him, you're not voting for very dramatic change, certainly not for nationalization.

MANJI: Well, no. But you wouldn't even call it that in America, obviously. But what he's arguing...

STIGLITZ: But let me just give you one example...

MANJI: ... you know, tends to be a little bit more regulation oriented that otherwise.

STIGLITZ: Well, the asymmetry that we've been talking about, while we had the bailout for Bear Stearns, we're talking now about bailouts for the investors and creditors to Fannie Mae and Freddie Mac, the president has been very reluctant to help those who are losing their homes.

And there are literally -- we're talking about millions of Americans who were preyed upon by these lenders in many cases, who are going to be losing their homes. We have a social problem, not only an economic problem on our hands.

And he says, there's going to be a moral hazard problem if we bail out these low-income people, who obviously didn't know how to manage risk. But they're not the sophisticated people who are supposed to know how to manage risk. It's the Citibank, the Merrill Lynch who are supposed to be our experts on managing risk.

ZAKARIA: But Adrian, do you sense that there's a shift taking place? Because the Labour Party in Britain, you would think would be the place where people would gravitate to say, OK, markets need to be fixed, regulated. But they're in trouble.

WOOLDRIDGE: Absolutely. And we're quite likely to have a Tory government within the next year or so.

On the other hand, what is making people happy with the Tory Party is not because they're saying let's go and privatize even more things. It's because they're quite pleasant about gay rights. It's because they're quite green. It's because they're talking about putting more money and more effort into global development.

So, those are the sort of things that they're exciting people about, the Tories, not pushing further with privatization and deregulation, and things like that.

ZAKARIA: So, the left has sort of become more pro-market.

WOOLDRIDGE: Exactly.

ZAKARIA: But where is the right, Irshad? When you look at the right in America on economic issues, when you hear McCain, when you hear Phil Gramm, it still seems as though it's the old playbook. It's a playbook that's worked very well, and I think probably worked well, because it had solutions to the problems of the 1970s and '80s, which was too many taxes, too many regulations.

So, the question becomes, is it going to work today, with the marginal tax rate not at 75 percent, but at 35 percent?

MANJI: I think you just answered your own question, in that you use the word "had" -- had worked well in the past. It's a new day.

People are fed up, you know, and precisely because the Bush administration, which is purportedly right wing, purportedly conservative and neoconservative, has just run up debts and deficits galore, done exactly what the right is not supposed to do in theory.

These labels no longer matter. They're all out the window, Fareed. And that is why at least I'm so excited as an observer of the U.S. elections, to see that there literally is a blank slate from which the right candidate or candidates can begin to build.

And it seems to me that this is exactly what Barack Obama is capitalizing on. He has always been about -- agree or disagree with his politics, agree or disagree with his strategies -- he has always been about -- that is to say, in this campaign -- transcending the polarities, the really vulgar polarities of us and them, left and right, black and white.

He is capitalizing on the mood.

ZAKARIA: We'll be right back.

(COMMERCIAL BREAK)

ZAKARIA: So, Adrian, let me ask you about one of these countries that is supposed to save global growth, India. India has just gone through a no confidence vote, in which the government won. It no longer has to support -- it no longer has the Communist Party to rely on. And so, it's going to sign the nuclear deal.

Is this a big deal for India? Is this a big deal for U.S.-Indian relations?

WOOLDRIDGE: Oh, I think it is a very big deal for those relations.

And the extent to which the world really does rely on China and India growing is extraordinary in the extent to which we can see political instability having very bad ramifications for that, I think is a big problem. It does matter.

I also think about the long-term impact for the sort of nonproliferation arguments. You know, if you're seeing a close relationship between India and the United States over this sort of thing, what are we going to say to the rest of the world about the proliferation of nuclear weapons?

ZAKARIA: Because the Indian -- the Indo-U.S. nuclear deal, which will then become one between India and all the major countries, is basically an exception. It's a carve-out (ph) for India, saying, you know, as long as -- we will accept and legitimize your nuclear arsenal as long as you now join the club and agree to some inspections, and such.

WOOLDRIDGE: Exactly.

ZAKARIA: And you think that it then becomes difficult to go to Iran.

WOOLDRIDGE: Absolutely. You say, well, why do you make an exception for them? Everybody will -- if you make an exception, everybody wants an exception.

ZAKARIA: But of course, this was the only way to get India on board.

WOOLDRIDGE: Absolutely. But it still sends a very muddled and difficult message for the rest of the...

STIGLITZ: I agree.

MANJI: I wanted to disagree slightly with Adrian's point about India's impact on the world, and take it back to something that Joe Stiglitz was saying, that, you know, Europe is now beginning to feel the effects of America's impending recession. You know, what I think this goes to show -- and it connects, by the way, to the enormous world response to Barack Obama's overseas trip this past week -- is that America remains the only country in the world with a universal constituency. And here's what I mean by that.

Domestic politics in the United States still affects large portions of the world, to the point of determining investment patterns, immigration flows, even giving other leaders and their presumptive heirs the excuse that they need to blur the lines between God and government.

So, it is no wonder that so much of the world today rages with anger, and a seething anger, about why it is that only Americans get to vote for the next United States president.

(LAUGHTER)

It sounds illogical to even say that. But when you look at the fact that U.S. domestic politics sets a precedent for so many other countries in the world, it actually makes sense to say, hey, we deserve a vote, too, even though we're not American.

ZAKARIA: Do you want to vote, Adrian?

WOOLDRIDGE: I'm not allowed to vote. But, well, I exercise my influence by writing articles rather than by voting. But it's been very interesting...

MANJI: And look at how well that's turned out.

(LAUGHTER)

WOOLDRIDGE: Well, you were talking about seething with anger. When all the Germans turn out today...

MANJI: Sure.

WOOLDRIDGE: ... to see Obama, they're not seething with anger.

MANJI: No, no, no.

WOOLDRIDGE: They're ebullient.

MANJI: But it's precisely because they're turning up, Adrian, that it goes to show that America's reach goes so long and so far, that even non-citizens want a say in who its next leader is going to be.

WOOLDRIDGE: America is the world's only universal nation...

MANJI: That's just it.

WOOLDRIDGE: ... (UNINTELLIGIBLE) about that.

MANJI: You can't say that for any other modern-day, multicultural... WOOLDRIDGE: Absolutely.

MANJI: ... entrepot (ph). Not Britain, not India, not China. At least not yet.

ZAKARIA: Let me ask you about another bit of your work, Joe. You wrote a book recently about the Iraq war, in which you said the Iraq war cost $3 trillion.

Regardless of what the exact number is, would it be fair to say that, if troop levels in Iraq start going down, and go down fairly fast -- whether at one brigade a month, or two brigades a month -- will the costs start dramatically declining? In other words, does the arrow work both ways?

And will there be an Iraq war dividend? In other words, the ending of the Iraq war should yield some kind of dividend to the U.S.?

STIGLITZ: It will yield a dividend. There's absolutely no doubt that the war costs us more the longer we're there. And we need to pay attention to those economic costs, particularly with all our other problems.

But the dividend won't be as high as one might have thought. We're now spending $12.5 billion a month up front in Iraq. The money is -- the costs have been going up every month. The war is expensive.

But those are only the upfront costs. About -- more than 40 percent of those who have been fighting in Iraq are coming back with disabilities, some of them with very serious disabilities. So, we are going to have to pay for decades to come for the mistakes that we've made over the last five years.

And even after we withdraw, we're going to have to reestablish our military. They've been badly drained. Iraq is just a little small place in the world -- very important for Iraq, but it's only one of our -- one little place in the global map.

ZAKARIA: That the United States has to worry about.

STIGLITZ: Exactly.

ZAKARIA: There's Afghanistan, there's Pakistan, there's Southeast Asia, there's...

STIGLITZ: And so, you go back -- the question, is there going to be a dividend, well, the fact is that we will save money in Iraq, but some of that savings is going to have to go to rethinking our overall...

WOOLDRIDGE: But Joe, isn't peace expensive, too? I mean, wasn't the policy of containment of Saddam also expensive?

STIGLITZ: We included that in our calculations.

WOOLDRIDGE: You did. Right. STIGLITZ: So, we included that. And, yes, we were spending some, but it's miniscule, miniscule compared to what we are spending in Iraq. And we...

ZAKARIA: Irshad...

STIGLITZ: ... yes (ph), we did that calculation.

ZAKARIA: Irshad, let me ask you. Does what's happened in Iraq over the last week really strengthen Obama's case? Because the prime minister of Iraq seems to have said that he wants a timetable for withdrawal, and that Obama's timeframe is about right.

There was some question about the translation.

MANJI: Right.

ZAKARIA: The "New York Times" actually got the audio, and it does appear that he said what was first reported. The Germans turned out to be punctilious and liberal, as one might expect.

(LAUGHTER)

MANJI: It is incredible timing. One has to wonder if Barack Obama is living under a horseshoe, because even his campaign could not have choreographed something like this.

But he does not believe the surge has worked.

Now, just because I'm interested in doing my own research, I've spoken with a number of people who travel back and forth between America and Iraq, some of them also Iraq-born and, therefore, have relatives on the ground, and so forth.

None of them, by the way, have any ax to grind with the Bush administration more than anybody else.

To a person, Fareed, they tell me that the lower levels of violence throughout Iraq today have really nothing to do with the surge. What they tell me is that people there were just, you know, overwhelmed with the amount of violence that was in their midst.

They decided on their own to confront the al Qaeda types in their neighborhoods. And today, unlike eight months ago, wedding parties are beginning to happen again.

So, you know, it is interesting to note that, once again, timing matters. And whether it's a surge, or whether it's ordinary people or some, you know, delicious combination thereof, Barack Obama is benefiting.

STIGLITZ: We make this point very strongly in the paperback version of our book that's coming out, that exactly, that the surge itself may be one little part, piece of what has happened, but it's not the major piece.

ZAKARIA: But it is fair...

WOOLDRIDGE: (UNINTELLIGIBLE).

ZAKARIA: But it is fair to say, isn't it, Adrian, that the surge had a positive effect.

WOOLDRIDGE: Oh, absolutely.

ZAKARIA: And that McCain's advocacy of the surge should be yielding him more political results than they are. Why aren't they?

WOOLDRIDGE: I think there are two things that might come out of this. Obviously, Obama's had a fantastic week. But two things are interesting, I think.

One is that Chalabi seems to have played some role in encouraging the Iraqi prime minister to settle with the Obama doctrine of 18 months.

And I think there may be a question of what was Obama doing? Was he going as an observer? Or was he actually beginning to engage in negotiations, which is something that the commander-in-chief ought exclusively to be doing?

So, people may say, is he being played by Iraqi politicians? Is he beginning to try and shape events before he's president?

ZAKARIA: Should McCain make that case?

WOOLDRIDGE: I think that certainly his surrogates should. Yes, I think he probably should.

STIGLITZ: What is it...

WOOLDRIDGE: And the second one is, I think the issue of the surge and Obama's refusal to recognize that the surge was a vital event, something that made it easier for a process of peacemaking that was already underway to continue, that made it possible -- I think that he should simply acknowledge that.

And I think his failure to do that is his one strategic mistake in the big strategy to make, because it's...

STIGLITZ: Because it's...

ZAKARIA: All right. On one Obama mistake...

WOOLDRIDGE: I don't think...

ZAKARIA: ... on the only mistake we can find, which not everyone agrees on, we have to stop. Thank you all very much.

Thank you.

We'll be back.

(COMMERCIAL BREAK)

ZAKARIA: Forty-nine years ago this week the world watched a rare and amusing spectacle. While touring an American exhibition in Moscow, Vice President Richard Nixon and Soviet leader Nikita Khrushchev got into a heated debate over their respective countries' political and economic systems.

The "Kitchen Debate," as it was quickly termed, was a rare example of genuine passion and argument during the Cold War, when diplomatic events were usually carefully planned, scripted and staged.

It's also a reminder of how far we have come from that era of competing ideologies. For centuries, countries have debated the role of the state in economic life.

Then came the 1980s, the collapse of the Soviet Union, China's embrace of capitalism and the end of this great debate.

Today, economic discussions -- in the United States, at least -- tend to be much narrower, mostly about how to make capitalism work better with moderate government regulation.

Consider the last few months. A conservative Republican administration has proposed large-scale government involvement in the financial and housing industries to ensure the stability of the U.S. economy.

And few Democrats, no matter how left wing, are proposing radical measures of state ownership, or even that the federal government nationalize Fannie Mae and Freddie Mac, for which a sensible case could be made.

There are furious kitchen debates these days, except that they tend to take place on cable television shows, not in actual houses or kitchens. And they are full of sound and fury, but signifying nothing.

That's it for GPS this week.

But before we go, I want to thank you again for all your e-mail. Last week, I asked you what single form of alternative energy you thought had the greatest potential to free us from our dependence on oil.

Many of you voted for solar energy. There was a lot of support for nuclear energy, as well, plus calls for natural gas and hydrogen.

Perhaps the most intriguing answer was human ingenuity, described as the same source of energy that got mankind to the moon. I like that.

My question for this week: Do you think we need more government regulation of the economy? Yes or no.

Visit our Web site, cnn.com/gps, for highlights from this program. You can e-mail me at FareedZakariaGPS@cnn.com. You can also find our weekly podcast on the site.

See you next week.

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