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FAREED ZAKARIA GPS

Money Troubles: How to Kick-Start the Economy; Wild Weather Evidence of Global Warming?

Aired August 15, 2010 - 10:00   ET

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


FAREED ZAKARIA, 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.

You hear about lots of crazy, stupid things that come out of Washington, so let me tell you about something intelligent, wise, and brave.

Robert Gates, the secretary of defense, has announced a major streamlining of the massive department he oversees. Gates intends to dismantle the Joint Forces Command, which fosters cooperation between the branches, shut down two other Pentagon agencies, cut intelligence advisory contracts by 10 percent, and cut the number of generals and admirals by at least 50.

Now, the Department of Defense's budget, always large, has doubled in real terms since 9/11. Gates says that the culture of endless money that has taken hold must be replaced by a culture of savings and restraint. Bravo.

Gates is tackling the most deeply entrenched system in Washington, what Dwight Eisenhower called the military industrial complex. It has spawned a gargantuan government bureaucracy at the Pentagon that is almost impossible to believe in its size, duplication, and waste.

Wondering how many generals and admirals we have? Almost 950, each of whom operates with hundreds of people in their staff, sometimes thousands.

Wondering how many deputy assistant secretaries of defense there are? Five hundred and thirty.

There are more members of U.S. military marching bands than there are foreign service officers in the entire State Department. In fact, there are 10 times as many accountants at the Pentagon than there are U.S. foreign service officers.

I could go on, but I think you get the point.

At 21 percent of the federal budget, defense spending is the single largest piece of discretionary spending. It is now $700 billion a year if you count the two wars, higher in real dollars than at the peak of the Korean or Vietnamese wars.

Now, this will not be an easy fight. Congress has already protested the cuts. Defense contractors are up in arms, and their lobbyists are lobbying fiercely. But Gates won his last round of cuts, and the president strongly supports him.

This will actually prove to be an important test of whether Congress can actually govern. If Bob Gates is unable to push through what are really reasonable, modest rationalizations of the Pentagon budget, he's looking for $100 billion of savings over five years. It tells us that we have lost the ability to reform even the most chaotic, out of control and wasteful elements of Washington pork. Every government program, every layer of bureaucracy is eternal, until, of course, one day the whole system goes bankrupt and comes crashing down.

On the program today, we'll start with the economy. Just how bad is the outlook? I will ask a top economist, Jeffrey Sachs, who has some very interesting views on the topic.

Next, is the wild weather around the world evidence of global warming? That's what I want to know, so I've brought together a great panel with Jeff Sachs and two climate scientists to tell me what they're seeing.

Then, what's Islam all about, especially Islam in America? It's a question many are asking in light of the controversy at Ground Zero. We will answer it with two terrific guests today.

And finally, which oddball dictator is trying to pay off some of his debt with an herb instead of cold, hard cash?

And also, a victory for both Nicolas Sarkozy and Napoleon Bonaparte in France.

Let's get started.

It's been a week of big economic news. China announced a huge trade surplus. The United States announced a big trade deficit. And markets were mostly down.

Joining me to talk about all of this is Jeffrey Sachs, the director of Columbia University's Earth Institute, and one of the world's most famous economists.

Jeff, people would think of you, and I tend to think of you, as a guy with left-wing political leanings. You know, generally speaking a liberal. But the stuff you've been writing recently has been very worried about the deficit, which one traditionally tends to think of as more of a kind of concern of conservative economists.

So why are you not comfortable with the Keynesian arguments of the administration, of economists like Paul Krugman, which is the economy is doing badly, the government needs to step in, spend a lot more money? JEFFREY SACHS, ECONOMIST: I think that just trying to recreate a consumption boom like we had and that collapsed after 2008 is impossible. So I think that the --

ZAKARIA: Impossible because people were doing it based on maxing out on their credit cards, taking money out of their houses. In other words, it was an expansion of credit that was causing the consumption.

SACHS: We were on a binge, and the binge ended, as all binges do. And what I found surprising about the Obama approach was that it basically was trying to get people to start spending again where they were saying we're tired, we're tired, we need to save a little bit. And once one realizes that consumption is going to be down, we'd need a different approach from simply "stimulus," from cutting taxes for households to spend more.

It's not going to work. They're going to save it. They're going to pay down debt.

Simply trying to give tax incentives so people buy houses -- the housing market is at rock bottom in historical terms at this point. People aren't going to buy more cars on a boom. They're tired.

So we needed the government to come in, in a different way. I don't think the markets was going to lead the recovery on its own. But what I did think is we need a long-term strategy, we need a long- term strategy based around investment rather than consumption.

We do need to reconstruct our infrastructure, our roads, our power system. Our water and sanitation system all over the country is broken down. Our rail is falling farther and farther behind what China or Spain or Japan or other countries are doing with high-speed rail.

Our energy system we know is dangerous. It's dirty. It is leading us to mass dependency on imported oil. And so we need a complete overhaul of the energy system.

It would also be human investment, human capital in more spending on higher education, training, research and development.

ZAKARIA: Now, the argument against that, I assume, is that you would have -- you would be allowing, you'd be countenancing a long decline. Or in the short term, that there would be jobs lost, there would be -- in other words, by not shoring up the system, you would be accepting high unemployment and slow growth.

SACHS: I think that's exactly right, that I believed that there was no magic solution. At the beginning I said the unemployment rate could get to 10 percent. Lo and behold, it did. And I did say, and we spoke about it on your show just before the administration came in, that you can't just blow up the deficit and do everything to try to make a binge and a bubble somehow come out perfectly. We should have taken a deep breath, given help to people that needed it temporarily, but understood that exactly what did happen was bound to happen, but not to break the budget and not to fail in thinking about the longer term.

What's happened is the stimulus substituted for thinking. The stimulus substituted for planning.

What I really worried about was -- and I said it to the White House then -- this may be the last thing you do in the macro economy. If you put everything here, what's going to happen when you really need to get to the energy system, when you really need to get to the climate change? Now that's --

ZAKARIA: What did they say to you?

SACHS: Well, they said we've got to act, we've got to act right now, it's desperate. I don't think it was so desperate. And I don't think it was solvable the way they decided to solve it.

ZAKARIA: So, going forward, you wouldn't do more stimulus? And you are worried about the deficit?

SACHS: I'm absolutely worried about the deficit because all over the world countries that have deficits like we do, 10 percent of GNP, are hitting the wall, facing massive crises. When is that going to happen with us? We don't know. But it could happen at any time because --

ZAKARIA: And if it does, that's the part -- the downside here is quite dramatic. If suddenly the world stops financing our deficit, you have to raise interest rates up very high.

SACHS: And it's not a theory because we see it. It's not a hypothetical.

In the U.K., in Spain, in Portugal, in Greece, in Ireland, they hit the wall. They had to take truly very harsh and tough measures in response to the loss of confidence. And I think we're, in any event, digging ourselves into a very, very deep hole.

Do we really want to owe trillions and trillions of dollars to China? Is that the best that America can do? I don't think so. Do we really want to play right on the edge of this massive indebtedness, which is what we're doing?

I was shocked, frankly, that when the administration came in and saw a trillion-dollar deficit, unprecedented, that they added to it and thought that that would work both politically and economically, rather than saying this is tough, we don't have a magic solution for the first year or two, but what we do need to do is have a solution for years three through 10 based on real investment and the real need for U.S. competitiveness. That's what has been missing.

ZAKARIA: Jeff, stay with me.

We will be right back in a moment to talk about the fires and floods and intense heat much of the world has been seeing. Is it global warming?

(COMMERCIAL BREAK)

ZAKARIA: It has been a scorcher of a summer, record-high temperatures all over the United States; huge chunks of glaciers the size of four Manhattan islands breaking off in Greenland; one-third of Pakistan is now under water; fires burning out of control in Russia; floods in Europe.

So, is this just another summer on planet Earth or is it the apocalypse? Or is it global warming? And whatever it is, how will it affect all of us and our economies?

To help me answer these questions, Jeff Sachs, of course, from the Earth Institute of Columbia; Gavin Schmidt is a NASA scientist who studies climate change; and Pat Michaels is a scientist who now works for the Cato Institute, the libertarian think tank that firmly opposes laws to cap carbon dioxide.

Welcome, gentlemen.

So, you're the scientists. Tell me what we should make of these high temperatures. There's always a danger of taking one summer or one data point and extrapolating from it, but it does seem like a lot of stuff is going on.

GAVIN SCHMIDT, GODDARD INSTITUTE, NASA: That's true. And some of the changes that we've been seeing, particularly in the heat waves in Russia, do seem to be very anomalous for a very long period of time. But you're absolutely right, we have a very hard job to attribute any one single event or even a group of disparate events to something as kind of slow-acting but pervasive like global warming.

So, we know that the planet is warming. This decade is the warmest decade that we have in the instrumental record. It's warmer than the '90s. The '90s were warmer than the '80s. The '80s were warmer than the '70s.

There are a lot more warm records breaking than there are cool records breaking. But there's still the same amount of variability from one summer to the next summer, or even from one winter to the next winter.

ZAKARIA: But all over time pointing upwards. That is, upward rise. The mean temperature is rising.

SCHMIDT: Right. So we think that that's because of the increases in greenhouse gases that industrial civilization and agriculture have put into the atmosphere. And what we anticipate is that because we're continuing to add carbon dioxide to the system, we're going to continue to warm decade by decade by decade. The exact magnitude of where we're going to go is going to depend a little bit on the system, but also on the decision that's we make as a society to either reduce carbon emissions or just to carry on with business as usual.

ZAKARIA: So that strikes me as the scientific case for global warming. That is, that it is happening, it is caused by greenhouse gas emissions, and what we do about those greenhouse gas emissions will determine how hot the planet gets.

Is there anything there you disagree with?

PATRICK MICHAELS, CLIMATOLOGIST: It's very clear the planet's warmer than it was and that people have something to do with it. What you're concerned about is the magnitude and the rate of the warming.

And I think it's quite demonstrable that the rate of observed warming is at the low end of the range of projections made by the United Nations. And furthermore, simply saying that one is going to reduce emissions could actually be the wrong thing to do at the moment if you don't have the technology to really effectively do this, and to do it globally.

What you could wind up doing is spending large amounts of capital that would be dissipated when it could be invested in the future in technologies that frankly you and I don't even know about. So --

ZAKARIA: What do you mean we can't do it effectively? We know how to reduce greenhouse gas emissions. We just stop using fuels that emit it. It may not be economically pleasant, but that's different from -- we know how to do it.

MICHAELS: We don't have replacement technology right now.

ZAKARIA: Right. We don't --

MICHAELS: We simply don't have it.

ZAKARIA: I agree with that, but that's different from saying we don't know how to do it. Stop using fossil fuels and CO2 emissions will go down.

MICHAELS: Yes, but unfortunately, talk's cheap. Yes, you can say you need to do something, but then you have to have a mechanism to do it.

ZAKARIA: Jeff, talk about the point Pat Michaels was making, which is, fine, the Earth is warming, human industrial activity and agricultural activity is causing it, but we don't really know how to get off the fuels that -- the whole way of life that produces these fuels, and so we can mandate all these things. It doesn't -- nothing's going to happen.

SACHS: I think what Pat said is absolutely correct, that you need a plan. But we need to get started now, because every time we build a power plant today, it lasts for 50 years.

So what kind of power plants are we going to build? Will we get back to nuclear? Will we capture and store carbon dioxide? How many electric vehicles can realistically be on the road in five or 10 or 15 years?

These are policy judgments. My view is that the costs of inaction are so frightening for the world, they're beyond our imagining, because the world is not good at handling the kinds of shocks that are ahead.

They could be devastating for hundreds of millions of people, easily. They could lead to war. They could lead to famine. And that's not hyperbole. That's a very realistic, hardheaded assessment of what can happen.

ZAKARIA: You hear all this. Doesn't it worry you? I mean, I understand your position, which is, you know, we don't have a substitute for fossil fuels right now. But surely that isn't an argument for stand pattism.

MICHAELS: No.

ZAKARIA: Don't you want to do something about this?

MICHAELS: What I worry about more is the concept of opportunity cost. We had legislation, again, that went through the House last summer which would have cost a lot and been futile. And when you take that away, or when the government favors certain technologies and politicizes technologies, you're doing worse than nothing. You're actually impairing your ability to respond in the long run, and that's my major concern along this issue.

ZAKARIA: But if you were to have a carbon tax, if you were to have a gas tax --

MICHAELS: You can put in the carbon tax.

ZAKARIA: No, but you would reduce the consumption -- that which you tax you get less of. That which you subsidize you get more of. This is a pretty simple law of economics, right?

MICHAELS: Right.

ZAKARIA: So if you were to put it in, you would get reduced CO2 emissions and the government would get some money which you may not think it would spend wisely, but it has the potential of spending wisely.

Why would you be opposed to that?

MICHAELS: But, see, the problem is one of magnitude and political acceptability thereof. You know, when we had gasoline at $4 a gallon, we reduced our consumption a grand total of four percent. If you're really serious about atmospheric carbon dioxide, you've got to reduce it about 80 percent.

How high does that tax have to be to be 80 percent? How do you do that in a political republic? It's very, very difficult. And I guarantee you that any time it comes up --

ZAKARIA: But is your answer therefore to do nothing?

MICHAELS: No.

ZAKARIA: OK. Then let me ask you what people wonder about, advocates like you. They say --

MICHAELS: I'm advocating for efficiency.

ZAKARIA: Right, but people say that you're advocating also for the current petroleum-based industry to stand pat, to stay as it is, and that a lot of your research is funded by these industries.

MICHAELS: Oh, no, no. First of all, what I'm saying is --

ZAKARIA: Well, is your research funded by these industries?

MICHAELS: Not largely. The fact of the matter is --

ZAKARIA: Well, can I ask you what percentage of your work is funded by the petroleum industry?

MICHAELS: I don't know -- 40 percent. I don't know.

ZAKARIA: OK.

MICHAELS: The fact of the matter is the technology changes dramatically in 100 years. And we will very likely not be a fossil fuel-based economy in 100 years. And the way to get there is to not take capital out of the system, but allow people to do investment. I have --

ZAKARIA: But you're confident we'll be around in 100 years.

MICHAELS: What's that?

ZAKARIA: You're confident we'll be around in 100 years.

MICHAELS: Oh, yes.

SACHS: Right now it's free to put carbon dioxide up into the air. There's no incentive not to. The cheapest thing in the world is to burn coal.

MICHAELS: That's true.

SACHS: OK. That can't be -- that can't be forever. But that can't be your answer also.

MICHAELS: Of course not.

ZAKARIA: Let me ask you, if all this is true -- and it doesn't seem there's an agreement on how to reduce CO2 emissions -- it suggests a fairly bleak future, because we're not going to be reducing CO2 emissions in the short term.

SCHMIDT: Well, I remain a little optimistic that the forces of delay will eventually be put aside. And so I don't see it as being -- as a terribly bleak future because, you know, I like to think that we're smarter than that. And I'd like to demonstrate that societies are smarter than just allowing business as usual to carry on. If we do, we will end up, in the phrase of my boss, Jim Hansen (ph), with a different planet. We will end up with a planet that won't be recognizable in terms of where crops can be grown, that won't be recognizable in terms of where rain is falling, that won't be recognizable in terms of where glaciers are and where ice sheets are and --

SACHS: And to put that in human terms --

SCHMIDT: -- and what the sea level is.

SACHS: That's a catastrophic planet, not just a different planet. If we end up with a different planet where people cannot grow food, where people cannot eat given where they're living right now, we have a catastrophe.

And the ironic point is the combination of the technologies we have already in hand and those that are close on the horizon, if we do this sensibly, we can do this at low cost, save the planet and save the economy. But we need a strategy and a plan.

That's what we hired the president of the United States for also. That's what we're still waiting to hear from the administration. If we get it, I bet the American people will rally to it.

MICHAELS: And every time we threaten an apocalypse and it doesn't happen, we cheapen the issue. Thank you.

ZAKARIA: We're going to have to close on that front. We will be right back.

(COMMERCIAL BREAK)

ZAKARIA: And now for our "What in the World" segment.

You know the tough economic times have affected all countries, from the United States to the United Kingdom to Greece. Many countries have had to pay back loans and found themselves strapped for cash. But perhaps no one has come up with as ingenious a solution as North Korea.

Apparently, back in the Cold War, North Korea bought a bunch of heavy equipment from then Czechoslovakia -- trucks and machines and the like -- and they never paid for it. Now, decades later, the North Koreans have come to the now Czech Republic with a proposal to repay part of their debt.

The North Koreans owed $10 million, but they were only willing and able to pay $500,000 of that. Oh, and did the Czechs mind if the North Koreans paid them in ginseng? Yes, the Asian root, the stuff you drink in tea or take a tablet, traditionally thought to have healing properties and to cure sexual dysfunction.

The North Koreans wanted to settle a $10 million check by giving the Czechs $500,000 worth of the stuff. That is about 20 tons of ginseng. And the Czechs only use about a ton and a half every year, so they said no deal.

It's a funny story, but as with all things North Korean, there is a more serious and sad side. The nation is a complete economic failure. It cannot even feed its own people.

The reason North Korea wanted to settle up in ginseng seems quite obvious. They don't have cash, and they didn't want to spend what little they have on a decades-old debt. And the debt to the Czechs was just a fraction -- a fraction of the country's entire debt.

The CIA says that North Korea's outstanding debt was $12 billion in 2001. That's when they seem to have stopped counting.

It's also a nation in a crisis of succession. In a personalized dictatorship, a crisis of succession, of course, is a major crisis.

All signs point to Kim Jong-il, "the dear leader," being very ill, and very little is known about his heir apparent, Kim Jong-un. Observers point to the turmoil at the top as a big reason for the wacky actions the nation has taken in recent months.

The United States has said that the evidence is overwhelming that North Korea was responsible for the March sinking of a South Korean warship and the killing of 46 sailors on board. This week, the North fired more than 100 artillery rounds at the South. As a state that has tested nuclear devices, this kind of agitation in leadership and aggressive moves are dangerous.

Now, set all this against a backdrop of economic crisis, and it's even more dangerous.

Now, perhaps to sweeten the deal for the Czechs, North Korea might throw in "Dear Leader" Kim Jong-il's supposedly massive collection of expensive French wines. So, between the wine and the ginseng, the Czechs could end up a very happy people.

And we will be right back.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: In the last five years alone, more Muslims have been killed, maimed, tortured, imprisoned by the likes of al Qaeda than by any foreign imperial power.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: The controversy over the Islamic Cultural Center near Ground Zero has sparked a conversation in this country and around the world about the state of Islam and the state of Islam in America. Is it about moderation? Is it about radicalism? Is it about tolerance? Are there shades of all of the above?

Mix in the terror stories we have seen in the last year, Faisal Shahzad's attempted Times Square bombing, the deadly shooting spree at Fort Hood, and the questions become even more pertinent.

To tackle those questions and many more, I was recently joined by Ayaan Hirsi Ali and Irshad Manji.

Hirsi Ali was collaborating with the Dutch filmmaker, Theo Van Gogh on a film critical of Islam, highly critical of Islam, when van Gogh was assassinated in 2004. The killer pinned a note to van Gogh's chest that threatened the life of Ayaan Hirsi Ali.

She continues to live with security today. She's just published a book, "Nomad," about her journey from Somalia to America and her simultaneous journey from being a devout Muslim to denouncing Islam entirely.

Irshad Manji is a liberal feminist Muslim working to reform Islam from within. She has been described as Osama bin Laden's worst nightmare.

The two talked about the problems with Islam and the solutions.

(BEGIN VIDEOTAPE)

ZAKARIA: Welcome, both of you.

UNIDENTIFIED FEMALE: Thank you.

ZAKARIA: Ayaan, in your book, one of the things you worry a lot about is Muslims in America and the growing radicalization of Islam in America. It strikes me that some of this is pretty fringe phenomena. The -- it seems that what you described is real, but it does not seem widespread. Am I -- I mean, how -- how worried are you? How widespread is it?

AYAAN HIRSI ALI, AMERICAN ENTERPRISE INSTITUTE: You look at someone like Faisal Shahzad, he comes into this country with a student visa. Welcome to the American dream. And he takes advantage of that.

He works hard. He marries an American woman. He has two children. He's full of so much potential. And yet he -- he try -- he says OK, this is not what I want, and my loyalty is more to Islam, my loyalty is more to jihad, Islamism, than it is to the American constitution, and he acts on it. And he's not the only one. We know about this --

IRSHAD MANJI, PROJECT IJTIHAD: And this is -- this is the utter bankruptcy of moderate Muslims, OK? What you will never hear a moderate Muslim say to Faisal Shahzad, who's thinking about committing some act of Jihadism, is that, look, bro, remember that in the last five years alone al Qaeda, OK, has -- you know, more Muslims have been killed, maimed, tortured, imprisoned by the likes of al Qaeda than by any foreign imperial power.

So that if you really want to be true to your community, you don't do it through acts of Jihadism. You don't do it by joining the Pakistani Taliban or being an agent for them on American soil. You do it by speaking out against abuse of power within your religion. This is what you will never hear moderate Muslims say.

ZAKARIA: But -- but what -- how -- what about this issue of how common is -- how widespread are the Faisal Shahzads? I still maintain that what you're describing is not a widespread phenomenon, that if you look at American Muslim communities, yes, you can find the -- the occasional Faisal Shahzad. But look, it's been 10 years since 9/11. Not only have you not found what -- has there not been a second attack. There haven't been a lot of plots.

So I do think it's fair to say that the Americans are doing something right with the -- with the assimilation and integration of their Muslim populations compared with France or Northern Europe, where you go and you see these people in -- in horrible ghettos, totally isolated from the -- the mainstream public, and they are, in many ways, backward and reactionary, you know, in those communities. But there's certainly something that is happening where these communities are not integrating them.

ALI: I agree with you and I disagree with you. I agree with you in that the number of young men and women who have been indoctrinated to the level of Faisal Shahzad, that they actually want to act, that that number is small.

ZAKARIA: In America?

ALI: Everywhere. I mean, let's be grateful. Of the 1.57 billion Muslims, that number is relatively small, those who actually want to act.

But to come back to America -- to come back to America, I think that even though a number of individuals who actually have reached that level that they want to kill Americans is very, very small. This number has grown. And, in fact, there is a correlation, I think, between the higher the education of these individuals and the fact that they start to ask themselves the difference between right and wrong. And, in that sense, America is more vulnerable than Europe.

ZAKARIA: What do you think?

MANJI: Well, there's also fear that needs to be injected into this equation. And by fear I don't mean fear of violence alone. I mean fear of dishonoring your family, and I'll give you a quick story.

In 2007, my mother and I were sent by PBS to film -- screen my documentary, "Faith Without Fear". Without fear, it turns out. My mother, out of the corner of her eye, watched a small and then larger and then larger group of young Muslims gathering. And after all of the microphones and TV cameras had gone, this now large group of young Muslims came over to me and my mother and they said to her, Mrs. Manji, thank you for supporting Irshad.

And my mother looked at them quizzically and said, well, I really appreciate that, but why didn't you say that earlier when you, you know, could have basically broadcast that message to others who would be watching and they'd know that they're not alone? And they looked at each other sheepishly, and then they said, you don't understand. You have the luxury of being able to walk away from Detroit two hours from now. We don't, and we cannot be accused of dishonoring our families.

These are children of the first amendment. Where are the moderates going wrong?

ALI: And I think one of the reasons why they're afraid is because of (INAUDIBLE) proselytization, ongoing proselytization from the Islamic brotherhood through using resources --

ZAKARIA: These are -- these are radical groups often funded by the Saudis.

ALI: By the Saudis, and that activity, that is I think what most Americans are oblivious to because it's not yet violent. And they should absolutely not be afraid. It's ridiculous when I --

MANJI: It is ridiculous.

ALI: It is ridiculous. And -- and that is -- and there is no competition with it. And the only way to break it, I think, is to target the same groups but with a different message, telling them exactly why Jihadism is bad, why Islamism is bad, and why something else might be better -

ZAKARIA: But --

ALI: -- and exercising critical thinking.

MANJI: Yes.

ALI: But if we do that now, you and I and probably you would all be accused of being islamophobes.

MANJI: But so what? Let us be accused.

ZAKARIA: Go ahead. Yes.

MANJI: That's -- that's life. You know, those are the games that people play.

ZAKARIA: You have a death threat against you and I merely have a couple of fatwas, so I'm -- I'm doing pretty well.

We have to end this discussion. I have to confess, maybe it's the American in me, but I remain more optimistic in thinking that --

ALI: I'm optimistic.

ZAKARIA: -- these (INAUDIBLE) are marginal.

ALI: I'm optimistic, but my optimism lies in finding answers outside of Islam, yours lies in finding answers within Islam, and I think the best strategy is to apply both, not just one.

MANJI: I have faith, Ayaan.

ALI: The demography is large.

MANJI: I have faith.

ALI: Well, I do. I have faith, but I have faith in human reason --

(CROSSTALK)

ALI: -- more than I do in --

MANJI: I just have faith that it could be reconciled with Islamic practice.

ZAKARIA: All right. We're going to have to break with that. We will be right back with Ayaan Hirsi Ali and Irshad Manji.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

ALI: I came to the conclusion perhaps it's better for Muslims to move away from Islam altogether and seek a different source of morality. Those who want a God should forsake Allah and find a God like Jesus Christ, you know?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley, and here are today's top stories.

At least six people are dead and nine others injured after a truck plowed into a crowd of people in an off-road race in California. The incident occurred in the Lucerne Valley area of San Bernardino County.

South Korea's president has proposed a plan to reunite his country with North Korea. In a speech marking the 65th anniversary of Korea's independence from Japanese colonial rule, President Lee Myung- bak said the two countries should form a peace community and stressed the importance of a denuclearized North Korea.

Senator John Kerry says he intends to tell President Hamid Karzai that the U.S. Congress is growing increasingly wary about corruption in Afghanistan. Kerry says as of now many members of Congress don't view the Afghan government as credible or Karzai as a genuine reformer. Kerry will visit Kabul later this week.

Those are your top stories. Up next, much more FAREED ZAKARIA GPS. Then, "Reliable Sources" looks at Robert Gibbs' war of words with the professional left at the top of the hour.

(COMMERCIAL BREAK) (BEGIN VIDEOTAPE)

ZAKARIA: And we are back with Ayaan Hirsi Ali, the author of "Nomad," and Irshad Manji of the Ijtihad Project.

Ayaan, you, in this book, consider yourself a success for having made this journey from Islam to America, but your family considers you a failure. Do they consider you a failure because you have rejected Islam or because you have come to America?

ALI: They consider me a failure because I've rejected Islam, and, in my father's view and my mother's view, my brother, and my half-sister's views, I risk hell. They think that I'm a failure because my hereafter is bankrupt. I haven't invested in it. I've invested on life on earth. And I think that is the main difference, in my view, between Islam and America.

The creed of America is life now, invest now, here on this earth. Lengthen your life as much as you can. Stay as healthy as you possibly can. Recreate. Reproduce. Produce. Consume. It's all about here. Islam is all about when we die we're going to stand before God and he's going to judge us, and life as we live it now is simply a test.

ZAKARIA: Now, how is this different, though, from, you know, devout Christianity, which has always had a very elaborate conception of hell and -- and purgatory and the hell fires of damnation?

ALI: Yes. Well, what happened to Christianity, as you know -- as you know, is it has gone through this long process, centuries long, where it was challenged from the inside and also from the outside. And it's something that Islam has missed out on.

And there is something about Christianity such as the acceptance of a hierarchy, whether it's a church hierarchy or a community hierarchy, which, in Islam, anyone can just say I am the true -- I'm a better Muslim than you are. This is what scripture says and so then you have a constant --

ZAKARIA: (INAUDIBLE) in that it's the -- the democratic way, egalitarian nature of Islam that actually has -- has promoted radicalism because, I mean, Osama bin Laden is a layperson, but he can issue pronouncements that are seen as the equal of the Grand Mufti of the mosque of Al-Azhar in -- in Cairo.

ALI: Yes. I mean, look at someone like Anwar al-Awlaki. What education has he got? What kind of --

ZAKARIA: Please explain (ph) who he is.

ALI: Anwar al-Awlaki is an American citizen who is now hiding in Yemen, who has inspired men like Faisal Shahzad, the guy who tried to blow up Times Square, Nidal Malik Hasan, the major in the American military, who's an American citizen, who killed Americans. These are guys who read the Koran and read the Hadith and then think that they are professional enough to tell other Muslims what they can do and what they can't do, what is right and what is wrong. And that is, in "Nomad", the reason why I came to the conclusion perhaps it's better for Muslims to move away from Islam altogether and seek a different source of morality. Those who want a God should forsake Allah and find a God like Jesus Christ, you know?

I'm not a Christian, but Christ, as he has evolved in the concept of the people who believe in Him, has become this cuddly God who is all about love and paternity, and -- and I think maybe for those Muslims, especially those who are seeking a better life coming to America, perhaps it's -- it's better for them not to just leave their home behind but also their God behind.

MANJI: Wow. Where to begin? Islam began as a religion of justice, but it has since become corrupted into an ideology of fear. And it's not America and it's not Israel that has done the corrupting. It is we, Muslims who have, and therefore only we Muslims who can lead the effort to fix the problem.

And, Fareed, you know as well as I do, plenty of people use statements like this to say she is anti-Islam. Well, in that case the Koran must be anti-Islam too because it clearly states God does not change the condition of a people until they change what is in themselves. This is a call to take personal responsibility without abandoning faith, no matter who's offended.

ZAKARIA: See, what strikes me about your -- your call, Ayaan, is it makes -- what is the chance that by telling a billion Muslims, by the way, your religion is kind of -- is all screwed up and what you should really do is abandon it and that -- that's the path of -- of true salvation, they're going to go and say, damn, why didn't I think of that?

So, you know, what it suggests is, you know, if you're -- if you're trying to say something provocative to bring attention to yourself, that's one thing. But are you really trying to reform the faith?

ALI: I don't think that we should lock 1.57 billion people in the world in a book that was written in the seventh century in a moral guide that we say existed in the seventh century. Since then humanity has evolved. Moral ideas have come on the -- that have been tested and tried. Why exclude Muslims --

MANJI: But Ayaan --

ALI: -- from the values of liberal democracy.

MANJI: But then -

ALI: Why Irshad?

MANJI: Well, hold on a second. I think that that's -

ALI: Why lock them up in a book?

MANJI: But that's the point. It's not locking us up. And, you know, my worry, my risk -- or rather the worry I have for you is that you risk minimizing the possibility that faithful Muslims can also be reformers. But ultimately worries me is that when you talk about, you know, Christianity being a reformed religion, remember that it took, as you rightly pointed out earlier, a long time for it to get there.

But if Martin Luther's predecessors had fallen for the kind of pessimism that you're talking about, they probably wouldn't have even tried and laid the seedbed for Martin Luther's ideas to then blossom.

ZAKARIA: Well, in those days they were probably told the Christians to convert to Islam, which -

MANJI: Yes.

ZAKARIA: -- by those standards was a progressive religion.

ALI: Well, we've been taught to convert to reason or at least make use of science, reason. People were learning and people were experimenting. And that has inspired me more than anything else. Why not look at science, rational humanism, Christianity -

MANJI: But you're saying the -

ALI: -- Judaism, some other idea.

MANJI: -- exact answers -

ALI: Why look for answers only in the Koran?

MANJI: No. You're -- I'm not only for answers in the Koran, but you are saying that there are absolutely no answers in the Koran. In fact, I think that the dogma is there, not certainly in the kind of Islam that I'm talking about --

ALI: It is the Koran and I --

MANJI: We live -

ALI: -- I don't like the things I find in there.

MANJI: OK. Then you reject it, and that's entirely your right. Welcome to a pluralistic Islam.

ALI: Thank you.

MANJI: But here's -- no, really. I don't mean that in any kind of a condescending way. You know that I defend your right to leave. But I am absolutely passionate about my responsibility to stay because if I was to walk away at this point it would feel like running away.

ZAKARIA: I think what -- what Irshad is saying is do you want to work through that or do you want to tell people look, this is all bunk of many way, just cast it aside - MANJI: Which wouldn't win too many Muslims over.

ZAKARIA: -- live -- live with -- right. Live with the uncertainty that we have no idea why we are here and what's going to happen to us after we leave, which I imagine is what you -- what you believe.

ALI: I -- I again say it's not one strategy. I agree with your strategy and with yours. And let's talk, let's persuade, let's do everything we can. But why pursue only the strategy of emancipating Muslims through reforming Islam. Why not emancipate Muslims also by introducing them. It's not either/or but also by introducing them to other moral systems.

ZAKARIA: On that note, Ayaan Hirsi Ali, Irshad Manji, thank you very much.

And we will be back.

(COMMERCIAL BREAK)

ZAKARIA: Now for our "Question of the Week". Will Congress have the guts to pass Defense Secretary Robert Gates' proposed budget cuts? Let me know what you think.

We continue to climb up the podcast rankings on iTunes, so please go there and subscribe if you haven't. You will never miss a show. And remember, it's free.

Now, as I do every week, our "Book of the Week". Tony Judt was a historian, political thinker, teacher, public intellectual, and a friend of mine. He passed away last week after a two-year bout with Lou Gehrig's disease.

His most recent book is called "Ill Fares the Land," and it is Tony's passionate defense of social democracy, the kind of system you see across much of Europe. Now, I may not agree with all of Judt's arguments. In fact, I don't. But it is a compelling, heartfelt, and beautifully written argument with many insights into America, his adopted country.

And now for "The Last Look." A victory for the vertically challenged, at least those who live in France. For hundreds of years if you wanted to be a police officer in France you had to meet a minimum height requirement. Most recently that height was 1.6 meters, about five feet three inches. But the French Civil Service Ministry has just scrapped that requirement.

Napoleon Bonaparte must be smiling from up above or down below, depending on how you consider his reign. And Nicolas Sarkozy should be pleased from his perch in the Elysee Palace. You see, both of them would have just squeaked by the old requirement. Depending on who you ask, each is said to be somewhere between 5 feet 4 and 5 feet 5 inches. Now, lest you suddenly start thinking that there might be a maximum height for French heads of state, remember, Charles de Gaulle was about 6 foot 5. Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for RELIABLE SOURCES.