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FAREED ZAKARIA GPS

Interview With Henry Kissinger; Interview with Zbigniew Brzezinski

Aired January 23, 2011 - 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.

As President Obama approaches his State of the Union address, I would suggest that he try an ambitious effort at bipartisanship. I know, I know, bipartisanship sounds really boring. It evokes dull committees and think tank reports that come to banal conclusions. But I would argue that bipartisanship, done right, could be just what America needs right now.

There are actually good ideas on both sides of the aisle. President Obama should propose a strategy for innovation and growth that could appeal to both Republicans and Democrats. But we know that Republicans and Democrats disagree on basic economic strategy. Democrats want more direct government stimulus, Republicans want to cut spending. Well, actually, Republicans just enacted a huge fiscal stimulus in the form of tax cuts but, never mind. They say they want to cut spending.

Obama should do an end run around this pointless debate and propose an agenda for long-term growth. The White House has actually written a superb white paper on innovation that could serve as a blueprint.

If America is going to have decades of growth, creating new jobs for millions, it will need to innovate, create new industries and grow cutting edge technologies. Republicans and Democrats agree on that. The question is how to do it.

Republicans focus on the need to have a more conducive regulatory and tax structure that encourages the private sector, Democrats focus on the need for greater federal investment in research, development and infrastructure.

The truth is both sides are right. The United States is losing competitiveness to other countries. Twenty years ago, America's corporate tax rate was the lowest in the industrialized world. Today, it is the second highest, and here's the key point -- we didn't raise ours, other countries lowered theirs.

Companies can now easily base themselves or grow their operations in places as varied as Singapore, South Korea, Canada, Germany, and of course China and India, rather than expanding plants in America. So the U.S. has to benchmark against other countries and remain an attractive place to operate businesses.

But it's also true that the great advances in technology have taken place because of federal funding. Without the Defense Department, there would be no semiconductor industry. NASA was the largest customer of the nation's computer industry. And while Al Gore may not have invented the Internet, DARPA, the defense agency, certainly did, and at a time when the private sector thought it was a bad idea. GPS, the technology that is fueling the mobile revolution, was created by the U.S. Military, and on and on.

Federal spending on research and development is still much too low. Our goal should be to double it in the next three years.

If Obama sets out a program that will make America more competitive for private business and couples it with a push for massive new funding for research technology, digital infrastructure, the smart grid and other such projects, he will be marrying two good economic ideas. And, in this case, good economics might even be good politics.

Today, a very important show. You've just heard what I think the president needs to say in the State of the Union, we've got a great panel to tell you what they think, some former speechwriters.

But first, the main event. Without the work of two men, many decades ago, this week's China state visit would probably never have happened, and you will hear from them both today.

We'll talk first to former Secretary of State Henry Kissinger, who began the thawing of relations between the two countries and brought Nixon to China. And then Zbigniew Brzezinski, who oversaw the normalization of relations between China and the United States. Both men were actively involved in this week's visit.

Then, "What in the World" is happening in the Arab world? Is George W. Bush's dream of democracy coming true?

And finally, a "Last Look" at what 25 tons of bombs look like after they've been dropped.

Let's get started.

(BEGIN VIDEOTAPE)

ZAKARIA: Forty years ago Henry Kissinger made a secret trip to China. It was the beginning of the opening to China, restoring relations between America and the Middle Kingdom.

This week, the Nobel Prize-winning former Secretary of State attended the state dinner President Obama threw for President Hu Jintao. He also took part in many of the meetings around this state visit. The firm he founded, Kissinger and Associate, has worked in China, consulting with American companies that want to do business there.

Welcome back to the show, Dr. Kissinger. HENRY KISSINGER, FORMER SECRETARY OF STATE: Always a pleasure.

ZAKARIA: On the crucial -- you've watched the atmospherics of these last few days. How did they strike you?

KISSINGER: The atmospherics were very positive, and both sides made up their mind actually before the meeting, that they would improve the atmospherics, which is important in this case because public opinion in both countries was beginning to run in the opposite direction and more material was being produced on the negative side of the relationship than solutions on the positive side.

So I think they have begun the work program, and now it remains to be seen to what extent it can be executed.

ZAKARIA: What do you think of the sort of -- there's a dominant strain among China watchers of feeling that this is what's happened over the last two years, Obama came into the White House wanting to be conciliatory, or at least cooperative with China. He made a number of gestures.

The Chinese seem to misread this or read it as weakness. They got tougher on certain issues, they overreacted on some. They've been more assertive in Asia, that something is changing in China, where there's a new assertiveness and combativeness.

KISSINGER: Of course, this is a new generation in China. This is the generation that grew up in the Cultural Revolution, when they saw a lot of turmoil in their youth but now enormous stability and progress. They don't really remember the period of national weakness that China represented in the earlier period.

And then they have a very Chinese approach to politics. They -- it's very hard for the Chinese to absorb the fact that many of our actions, most of our actions, are more or less random actions that's generated by individual pressure groups, but they put them together as if they were part of an overall design. And so then they begin to interpret that design as an American attempt to hold them down, and this leads to an atmosphere of mutual suspicion, partly produced by this -- by the cast of mind of the two sides, but it will develop a reality of its own.

ZAKARIA: But you say -- talk about a new generation, and you're -- you're right. This is a generation that has seen 30 years of peace and stability. They've seen --

KISSINGER: And enormous progress.

ZAKARIA: Right. They've seen the -- they've seen the Beijing Olympics, you know, which has -- which conditions them more. Are they, as a result, more combative, more assertive?

KISSINGER: It isn't necessarily a question of combative. The -- the Chinese have a very unemotional view of international relations. They assess the balance of forces, and they wouldn't respect or they -- to which they feel they're entitled by their strength. ZAKARIA: Do you think that on the two issues that President Obama probably pressed concretely, which is the -- the revaluation of the -- of China's currency, the yuan, and on the issue of Chinese firms and Chinese government entities stealing intellectual property from American firms, he is likely to get any progress from the Chinese, any -- any accommodations?

KISSINGER: If it can be done in a way that it does not look like a Chinese defeat. In other words, if they don't have to step up to a rostrum and say we have agreed to move the currency. I believe they now understand a way it might be done with some mutual concessions over a period, say, of a year. I think I would be disappointed if that did not happen.

ZAKARIA: The movement of the yuan?

KISSINGER: The movement of the yuan.

Now, whether it's exactly to the percentage we want or not, but I think that Tim Geithner has laid out something that is compatible with the way the Chinese define their self-respect on this issue so that it does not look as yielding to American pressure. So it may not be visible next week.

ZAKARIA: You know, you've dealt with so many Chinese leaders. In fact, people tell me that Chinese leaders now want to meet you because the current Chinese leaders never met Mao or Chairman Li (ph), and that you spent hundreds of hours with them so they learn from you about their history. Do you feel that they are genuinely smarter than -- than Western leaders, that they are more strategic?

You know, there's -- there's now -- we have this mythology about everybody from Chinese mothers to Chinese statesmen, they're all supposed to be better than us. Are they?

KISSINGER: They are different. They are -- first of all, this generation of Chinese leaders is more like us than the first generation. The first generation of Chinese leaders were in a way in style more comparable to the traditional historic Chinese. So this generation is more practical, but --

ZAKARIA: They're engineers, the technocrats --

KISSINGER: But in the Chinese way of thinking. They have a more conceptual approach.

ZAKARIA: Which means what?

KISSINGER: Which means that they like to -- they tend to connect the dots.

So we do four or five things as produced by American domestic pressures, they then try to define a design. So let's say we sell arms, presidencies, the Dalai Lama and somebody asked for retentive currency. All of it could happen as a result of domestic pressures in one month. They didn't think somebody sitting down here and he's trying to hold it down, and therefore we shouldn't -- we have to react. It's not just in terms of the marriage of the dispute but in terms of asserting ourselves in such an extraordinary way that they'll never do it again. So this is one problem.

Secondly, I believe that you have to understand the Chinese intellectual game. It's what we call Go, they call it Weiqi. This is a game of strategic encirclement. Our intellectual game is chess. Chess is about victory or defeat. Somebody wins, and all the pieces are in front of you at all times and so you can calculate your risk. In Weiqi I think there are 180 pieces, but they're not all on the board, and your opponent is always capable of introducing new pieces.

So when you look at the Chinese analogies of the -- of strategic situations, historically, they do it in this Go way.

ZAKARIA: And -- and the game never ends, as I -- it's sort of constant --

KISSINGER: The game almost never ends.

ZAKARIA: Henry Kissinger, always a pleasure.

And we will be back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

ZBIGNIEW BRZEZINSKI, FORMER U.S. NATIONAL SECURITY ADVISER: If you look at every aspect of China, every aspect of America, everything literally is a contrast. We, short history; they, long history; they, strong Confucian culture; we have this very subtle amalgam from all over the world. I could go on for hours.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: Zbigniew Brzezinski says President Hu Jintao's visit to Washington this week was the most important U.S.-China meeting since Deng Xiaoping's visit to the United States 30 years ago. Brzezinski should know. As National Security Adviser to President Carter, Brzezinski brokered that meeting with Deng, and it was under Carter and Brzezinski that relations were formally normalized between the two nations.

Like Dr. Kissinger, Brzezinksi has been actively involved in this week's visit, and we welcome him back to the show. A big pleasure to have you.

BRZEZINSKI: It's good to be with you, Fareed. ZAKARIA: Why do you think this was so important? Is it you feel that there is a danger that U.S./Chinese relations are getting derailed by increasing -- I think you called it reciprocal demonization.

BRZEZINSKI: Well, that's the risk. And, in fact, in the last year and a half or so, on both sides there has been increasingly vociferous criticism of the other, and that could get out of hand.

But, beyond that, there's something more important. China is now a global player. So the issue is really do we go forward together, dealing with global problems constructively? Does our bilateral relationship deepen, or do we drift -- drift into some sort of increasing confrontation?

And one of the reasons I wrote a (INAUDIBLE) article for "The New York Times" early on was to encourage both sides to address the central question, is there a common agenda for us? And I have to say, looking at the communique, that actually they did pretty well. They really started talking seriously.

ZAKARIA: But the -- the crucial issue from the American side, seems to me, was laid out by Robert Zoellick when he was deputy Secretary of State, which is, is China willing to be a responsible stakeholder? That was the phrase he used.

In other words, will it be -- was it willing to produce global goods rather than just consume them? By mean -- by that I mean do things on climate change, do things on trade, do things on regional security in North -- in Northeast Asia that are beneficial generally rather than very narrowly to China?

What's your sense? Does China want to play that role of a kind of creator of public goods?

BRZEZINSKI: You know, I think that increasingly they realize they have to if they are to be what they want to be, which is a major power in keeping with their history, their sense of themselves. But, the definition of what they ought to be is not going to be made by us, precisely because they do want to be a major player.

So what is important in our dialogue -- and this is why I think this meeting was useful -- is to itemize the issues on which we have to work together and begin to spell out a kind of generalized sense of direction, but not one in which direction means I direct and you follow.

ZAKARIA: Right.

BRZEZINSKI: And that's much more difficult.

ZAKARIA: Do you believe that the -- there's a general view that President Obama came into office being quite conciliatory toward the Chinese. The Chinese read that as a sign of weakness and were surprisingly combative with him. They've been assertive in Asia, but there's something going on here where there's been either a new Chinese assertiveness or they have totally misperceived and misplayed the Obama administration.

BRZEZINSKI: You know, actually, I don't buy either. It seems to me what has been happening, to some extent, is an inevitable stage in the process of adjustment.

Look, 30 years ago they were an important country, given their location and history, but they were very, very backward, very underdeveloped. Today, their manufacturing is as big as America's, and we know the thrust, and they know it.

So we are going through a process of redefining the parameters of the relationships and the inner workings of the relationship. But, increasingly, I sense, with the realization, at least within both elites, these are the publics, that we have to swim together or we'll sink separately, but with the same effect for each other. And I think this is what this meeting is all about.

We're learning about them. They're learning about us. We know also, I think -- I hope -- that they're evolving, in some respects slowly and in some respects fast. I think they're learning that we're adjusting to a world of complexity and not a unilateral dictation, as in the last 10 years.

ZAKARIA: China is getting more nationalistic, and we look at it in and, you know, it sometimes bothers us. But it really bothers the Japanese and the Indians and the Vietnamese and the South Koreans.

BRZEZINSKI: Yes. Well, this is where I do have a bit of a sense that last year the Chinese overplayed their hand and maybe even played their hand badly in the sense that they managed simultaneously to really frighten, in addition to irritate, the Japanese, certainly to irritate the Vietnamese, to make the Indians feel that they can use us against the Chinese, and so forth. And I have a sense that this visit for them was also a redressing of the balance. Not that they feel guilty, but that they felt perhaps things ought to be played a little differently.

Hopefully, we're learning, but we have, of course, now a very gridlocked political system, to some extent polarized, probably more polarized in foreign policy than we really know. Because right (AUDIO GAP) here.

ZAKARIA: But you have this extraordinary situation where the Speaker of the House refused to attend --

BRZEZINSKI: Precisely. Precisely.

ZAKARIA: -- a state dinner.

BRZEZINSKI: Yes, which I think is a rather uncivil and unwise action, because after all the Republicans are part of the action. They're co-partners in the government and I would think they would have the desire to participate in the process which they can influence more if they participate in it. ZAKARIA: Do you think that going forward on currency, on intellectual property, the Chinese are going to be more accommodating, or are we in for -- or is this the new normal with U.S./China relations, tension and some misunderstanding?

BRZEZINSKI: I think accommodation is going to be a step by step process in which there is pushing and maneuvering and then new parameters are drawn. It's not going to be us telling them what to do. It's certainly not going to be them telling us what to do. So it's going to be an endlessly complicated process.

But my sense is that at least those who shape policies in both countries now realize that there is a kind of de facto partnership between China and America, and that it is in our mutual interest for the disagreements not to get out of hand. And that's not a bad conclusion to reach in a very complicated relationship between two as different a countries as one can imagine.

If you look at every aspect of China, every aspect of America, everything -- it literally is a contrast. We, short history; they, long history; they, strong Confucian culture; we have this very subtle amalgam from all over the world. I could go on for hours. And yet it's remarkable how, in that context, I think we're managing, and they are managing.

ZAKARIA: Zbigniew Brzezinski, pleasure to have you on.

BRZEZINSKI: It's always good to be with you, Fareed.

ZAKARIA: And we will be back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: The United States has adopted a new policy, a forward strategy of freedom in the Middle East. This strategy requires the same persistence and energy and idealism we have shown before, and it will yield the same results.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

What got my attention this week were the dramatic events in Tunisia. They do raise the question, could this Jasmine Revolution have an effect across the Arab world?

Now, there have been popular revolutions in the Arab world, Nasser topple the Egyptian monarchy, as did many other popular movements in the 1950s and '60s, but in the end they all led to dictatorships, never the lasting democracy. It's still too soon to tell for Tunisia, but there is hope of reform in democracy. And if we look at Tunisia not as an isolated episode but as part of a decade of change, there is a pattern emerging. Ten years ago, the political landscape was bleak in the Arab world, but today there are sprouts of democracy breaking out all over. This progress is mostly happening as two steps back, one step forward, two steps forward, one step back, but it is happening.

Start with Iraq. While still struggling through deep sectarianism, it is finally a somewhat functional, democratically elected, multiparty government and a vibrant free press. Iran had a contested election and a genuine mass protest movement. The 2009 Green Revolution would have been unimaginable a few years earlier.

Lebanon has faltered of late, with its government collapsing, but serious direct control of that country has ended and we now have a messy but more open political system, though one in which Hezbollah, a quasi-terrorist organization, is a key player.

Countries like Bahrain and Kuwait have flirted with reforms. Egypt has initiated some serious economic reforms. The political system remains closed as ever, but that crucial country faces a moment of truth as Hosni Mubarak faces his last years in office as president. And who knows what might happen in Algeria, Syria and even Iran over the next 10 years?

This sort of striving for democracy is what Arab intellectuals have yearned for, speaking of the freedom deficit in their lands, which is quite true. And, of course, George W. Bush set forth to fix the problem with what he called a forward strategy of freedom in the Middle East. Listen to Mr. Bush.

(BEGIN VIDEO CLIP)

BUSH: This strategy requires the same persistence and energy and idealism we have shown before, and it will yield the same results. As in Europe, as in Asia, as in every region of the world, the advance of freedom leads to peace.

The advance of freedom is the calling of our time. It is the calling of our country.

(END VIDEO CLIP)

ZAKARIA: Now, if Bush's vision does come to fruition, will it be because of America's military pressure, or despite it? That's an interesting debate.

In Iran, the democracy movement happened thanks to a stolen election and a mass movement; in Lebanon, a political assassination; in Tunisia, it was the middle class that had had enough of a dictator enriching himself while they suffered; in Egypt it is a burgeoning middle class that doesn't want to see the keys to the kingdom handed down to a dynasty or the army.

Democracy comes out of the development of societies, from economic growth, middle class restlessness and, above all, of course, the political failures of dictators. It can be help from abroad, but ultimately it is an organic process when it is successful.

But give President George W. Bush his due. He saw the problem and he believed that Arabs were not genetically incapable of democracy, and he put America's moral might behind the great cause of Arab reform.

We will be right back.

(BEGIN VIDEO CLIP)

ZAKARIA: What will Republicans be wanting to hear?

DAVID FRUM, FORMER SPEECHWRITER, PRES. GEORGE W. BUSH: An apology. I'm sorry. Oh, I'm just on a completely wrong track for the past two years.

Republicans are going to be looking for signs of weakness.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: President Obama will lay out his agenda this week on Capitol Hill when he delivers the State of the Union. Earlier in the show, I told you what I thought he needed to do, but I want to hear what others think. So joining me now are two men whose job it was to write the words that president spoke.

David Frum was a speechwriter for President George W. Bush, perhaps most famous for his phrase "the axis of evil" in the 2002 State of the Union address. Hendrik Hertzberg was a speechwriter for President Carter. He is now senior editor and staff writer at the "New Yorker". And jobs and economy will surely be a main focus of the speech, Zanny Minton Beddoes is the D.C.-based economics editor of the "Economist" -- say that five times fast.

Welcome to you all.

David, since you had the most recent experience, what is the State of the Union in terms of, you know, the president's ambition where -- how is it different from a speech at the U.N. or the inaugural? What are the -- what is the president trying to accomplish?

FRUM: What is the moon launch of the Executive Branch? I mean, it's just made up of so many pieces. It's not written from beginning to end. It's written in components that are slapped together. Getting those components into a speech -- I remember you mentioned 2002, I did a lot of work on the agriculture section on the 2002 State of the Union address, but it never -- it never appeared at all. That section was just omitted entirely because you have a time -- time limit. And I assume that modular method is used in others. It is the place where the president puts down an agenda, but he also makes a connection to the American people. Most people see the president in a seven or eight second clip once a day at most. To see him -- to see him at an extended period of time, they always come away liking their president better, because you don't get to be president unless you've got skills that enable you to communicate with people through that box.

ZAKARIA: But, you know, to that point, given what you're describing, why does it feel -- I mean, I understand bureaucratically why it ends up being a laundry list of every department's wish list and things like that, but doesn't the president realize it gets a little boring and if the American people have to suffer through this long laundry -- laundry list is not going be as interesting and inspiring to them.

FRUM: This is one of the places where President Clinton was a real presidential innovator. Because what happened with Clinton was, he would deliver these terrible, boring, ghastly States of the Union. And, you know, and for Mrs. Mildred James at 4732 Sycamore Street in Milwaukee, we're planting a new tree in front of your house. And then you would test and the numbers would go crazy, that the worst speech was the better people liked him. And so that -

ZAKARIA: Why? Why?

FRUM: Because they are -- what people are listening for is what is that thing that I want to hear that you're going to do for me, but they also -- somehow that connection to the president is involved. He's talking about things they care about. That is -

ZAKARIA: And he's smart and he grasps the material.

FRUM: All of it. And so, Clinton really changed it. I think post-Clinton presidents don't aspire so much to write a beautiful finished speech. And the 2002 speech was probably the most coherent single statement that the president has made. It didn't have anything like the impact on President Bush's numbers of the 1997 and '98 State of the Union had on Bill Clinton's numbers.

ZAKARIA: Hendrik?

HENDRIK HERTZBERG, FORMER SPEECHWRITER, PRES. CARTER: You know, David is absolutely right. I mean, the Clinton speech was an outlier and that all of the professionals, the journalists and the old -- the ex-speechwriters watching that thing go on and on thought this is a disaster. And then, as David said, the numbers shot off the charts.

The State of the Union is a hellacious process because all of the pressures, all of the bureaucratic pressures come to bear on -- on one point, namely the White House Speechwriting Office. I think this one, this will be a non-Clinton one, I suspect. That one of the advantages to -- for Obama in having lost the House and therefore having lost the chance for any big legislative accomplishments is that it opens up more space for a more thematic speech. And I suspect we'll get a more coherent literary kind of speech. ZAKARIA: Zanny, you've been in America for a long time but you're British. I mean, is this sort of like the Queen's speech to Parliament? Or is this -- well, how does this strike you?

ZANNY MINTON BEDDOES, THE ECONOMIST: Probably (ph) it's a process I would never ever want to be involved with when I think of this. I think it's interesting that you mentioned the Clinton -- I arrived and seen him in 1996, in the Clinton era and I remember those kind of interminable laundry list State of the Unions that went on and on.

I suspect that this year we're going to need a bit of boat. We're going to need the big narrative. Because I think it is -- it's very -- there is a sense that people don't know what Obama's strategy is for the economy and I think the economy will be absolutely central. How is he going to get America back to work? What is his kind of -- we've gotten past the crisis. We're out of the emergency room, but what's really his view for where this country is going? How is it -- he's talked about a sputnik moment. Maybe it will be something along those lines. We'll probably hear lots of stuff about competitiveness.

But he really needs to wrap it into the quotable phrase. There has to be a kind of sense that he's got a big vision for the country. But at the same time, I suspect the lessons of Clinton come through too that people at home want tangible things. They don't just want big rhetoric. They also want to know, OK, what is he going to do to get jobs? What is he going to do to deal with the deficit? What is he going to do with all of these concrete things that we're worried about?

And I think there's going to have to be a very careful balance of these -- both the big picture and the kitchen sink. It's going to be a tough one to do.

ZAKARIA: What will Republicans be wanting to hear?

FRUM: An apology. I'm sorry all. I'm just on a completely wrong track for the past two years.

Republicans are going to be looking for signs of weakness and that there's just no way around that. And does he seem uncertain, does he not seem to have a clear agenda. Does he in any way look to beholden to Democratic interest groups at the time when the Republican interest groups are stronger.

But here are a couple of suggestions I would have and one very serious one, a little more (INAUDIBLE). The serious suggestion is the mood of the country is terrible. I mean, you have almost half of Americans thinking that China has overtaken the United States as the world's dominant economic power. Something that (INAUDIBLE) point out is just not true. It may happen in the distant future, not true now.

Words to remind people of the strength and latent power of the United States, of all of the resources there -- that are there to be seen (ph). We're talking about country that makes 20 times as many patents a year as China. I think something of that, we have only to fear that that -- that it was not a phrase, it's really true. Sometimes fear is paralyzing.

And the second thing -- and this is I've read along sort of mock what I would might have to see what he would say. This is a moment when we're so uncertain about the outcome of the 2012 election, to press for some institutional changes to make the government work better. I mean, how can it be that a senator has the secret power to put a hold on a governor of the Federal Reserve and without anyone knowing formally who's doing it prevent a vote on that Federal Reserve governor for months and months and months? And the next Republican president will dislike that just as much as this Democratic president dislikes it.

ZAKARIA: We will come back to talk about all these issues right after this.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

FRUM: We have a huge burden of adjustment that is coming. And it's coming -- it has arrived at the state and local level. It's going to arrive very soon at the national level. There are going to be losers. Everyone -- we're all going to be losers. Some will lose more and some will lose less. Who should the bigger losers be and who should be the smaller losers?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

Six people were killed and at least 30 others wounded after a car bombs exploded in five different neighborhoods in Baghdad. The attacks occurred over a three-hour period earlier this morning. Officials say the bombings appear to have the hallmarks of al Qaeda in Iraq.

Former Secretary of State Colin Powell says Barack Obama has ways to go as president, but still deserves to be called the transformational leader. Speaking earlier on State of the Union, Powell addressed other challenges facing the president on the eve of his State of the Union address.

(BEGIN VIDEO CLIP)

COLIN POWELL, FORMER SECRETARY OF STATE: The economy is now starting to rebound, more slowly than we like to see, but it is rebounding. Whether you approve of health care or not, he took on that issue which I think is a major challenge for the American people. What do we do about 40 million Americans who have no health insurance? And so I hope we can fix whatever may be at fault in the bill that was passed, but we need some kind of health reform, and I think he took that on. I think he has reached out to countries around the world and has developed good relations with countries around the world, and I think he's working hard on the issue of unemployment, which I think is the major problem facing America right now. And I think and I hope this will be the centerpiece of the State of the Union speech.

(END VIDEO CLIP)

CROWLEY: You can see my entire interview with General Powell today at noon Eastern on CNN.

But up next, much more FAREED ZAKARIA GPS and then on "RELIABLE SOURCES", Howie Kurtz looks at Keith Olbermann's abrupt departure from MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with our terrific panel, David Frum, Hendrik Hertzberg, Zanny Minton Beddoes, all giving advice to the president.

Rick, speak from the point of view of the disgruntled left. I don't know if it's fair to put you in that position. But one of the things Obama is going to have to balance is this issue of how do you move to the center or appeal to the country and at the same time not make, you know, the folks at MSNBC just go crazy?

HERTZBERG: Well, I think he's actually in a better position to -- to do that than he was a couple of months ago. The left is sort of absorbed the body blow of the loss of the House. And I do think that while it's a little tasteless to think about his speech at Tucson in a purely political context, I think that -- I think that that impressed everyone and showed that that side of his character, the side of the kind of Gandhi-an (ph) side of his character, you know, a combination of -- of huge civility, a refusal to get angry and some firmness behind it --

ZAKARIA: But can that translate, Zanny, into a policy program that will appeal to both sides? And I think that there is a -- there is a deal here, which is do stuff on the competitiveness issues, you know, tax reform, regulatory reform, but also make investment -- tell the Republicans you've got to agree to investments and research development and infrastructure, and say this is the growth agenda. This is the only way we can -- we can grow over the next decade.

BEDDOES: Well, I -- I totally agree with that. I think the Zakaria agenda is a pretty good one. But I think the difficulty with that, there are kind of two versions of that. There's the minimalist version of the Zakaria agenda, which is do a little bit tiny kitchen sink things -

ZAKARIA: Yes.

BEDDOES: -- to improve competitiveness and a little bit on tax reform.

Or there's the more maximalist (ph) one, which is really do infrastructure investments, do a lot of progress stuff, and at the same time deal with the median term deficit through tax reform and I have to say something on entitlements too. It's clear to me that that would be a better outcome. I think it's very striking that the U.S. is, you know, the one big western economy where we have no idea how the median term fiscal problem is going to be solved.

And, you know, in an ideal world we would start tackling this now. I think it's going to be very tough for the president because for one thing, you know, this is a president whose assume (ph) very carefully to his pledge that there shall be no tax increases for middle income households. And I don't see how you solve America's medium term fiscal problem without having, for example, tax reform that deals with the mortgage interest deduction, all of these kind of sacred cows that would involve higher taxes on middle income Americans.

ZAKARIA: The closing of loopholes and deductions is in effect raising taxes.

BEDDOES: Yes.

UNIDENTIFIED MALE: And people don't like to admit it.

BEDDOES: And when you call them loopholes and deductions, everyone hates them. When you start saying charitable contributions, you know, what's interesting is, whoa, don't touch that, you'll have every lobby group in town going after them, and I think it's going to be hard.

ZAKARIA: And the Republicans will go -- I mean, the Republicans have so far in theory been greatly in favor of deficit reduction, but no actual deficit reduction.

FRUM: As the Republicans become the party of the elderly, you reflect the interest of your constituents. The elderly are the greatest beneficiaries of the American Social Welfare.

ZAKARIA: Well, are you saying the Republicans have become -- is that -- are the demographics clear?

FRUM: Well, if you look back in the middle 1980s, the election of 1988, which is a good baseline. I'm not going to remember all of these numbers exactly. But the Democrats dominated among over 65s.

In this past Congressional election, that was -- it's a smaller electorate, the presidential one. But the Republicans dominated among people over 65. Well, if that has been in the 1980s, the Republicans were dominant among people under 30 and the Democrats are now dominant.

ZAKARIA: This is fascinating. So, the Republicans now have their base and their ideology in two completely different places. Their base wants all these benefits for the elderly and their ideology, well, says that we have to cut them.

FRUM: And that is why that you know the two worst things about the president's health care package, number one, that it increases the deficit, and number two, that it restricts Medicare. And you will hear people on the Floor of the House say that, because -- but is -- they're not completely irrational. Because it's also true -- and here is where I hope the technocratic path -- you predict is the right one, it really, I think, is possible to get 17 wise people in a room with a good flow of hydration and have them work out a technical deal that would put us over a certain period of years on a path to sustainability and economic growth.

But it's also and I think more likely is this, we have a huge burden of adjustment that is coming and it's coming -- it has arrived at the state and local level. It's going to arrive very soon at the national level. There are going to be losers -- everyone. We're all going to be losers. Some will lose more and some will lose less. Who should the bigger losers be and who should be the smaller losers? And that will be resolved in a furious episode of very intense politics.

BEDDOES: I completely agree with you. The technocratic solution has a lot of political difficulties. The real irony, however, is that the politics suggest that nothing is going to happen for really quite a long time, which means that in the end the kind of pain of the technocratic solution gets even worse. I mean, it would be much better if we sat these 17 people around the table and started to do things now if and I'm sure you're right.

ZAKARIA: That's what you think (ph) solved the problem it seems for them.

BEDDOES: Well -- or if you have the British system where, you know, you have a parliamentary system and you have a (INAUDIBLE) -

ZAKARIA: An elected (INAUDIBLE) -

BEDDOES: -- exactly.

FRUM: Fareed, you said something in a column a while back and I quote all the time. Made a huge impression on me. So that the American political system is surprisingly good at dealing with crisis, but surprisingly bad at dealing with chronic problems. And I think that's a very -- that's a very important point.

So what that suggests, and I think you're right about it, is that we're going to do not very much until some kind of crisis erupts. And then you get these T.A.R.P. moments where over a weekend and people park their ideology at the door and they say inside the room exactly the opposite of what they've been saying outside of the room for the past 15 years, and some kind of nasty and, you know, disagreeable but ultimately reasonably effective deal gets done.

And that -- and the question is how much pain do we need to take? And what you're praying for and I completely concur. Can we anticipate this problem? Can we solve it before the pain arrives? Because that's possible. But if you're right -- ZAKARIA: And on the note of that perceptive call -- observation about my column, we're going to have to stop. David Frum, Rick Hertzberg, Zanny Minton Beddoes, thank you very much.

We will be right back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAKARIA: Our question this week from the "GPS Challenge" is, complying with the request from the Chinese delegation, what entree did the White House serve at this week's state dinner? Was it A, stir fried beef with snow peas; B, dry aged rib eye; C, Peking duck; D, Maine lobster tails.

Stay tuned and we'll tell you the correct answer. Make sure you go to CNN.com/GPS for 10 more questions. And while you're there, don't forget to check out our podcasts. You can subscribe to it on iTunes as well. In that way, you never miss a show and the price is great, nothing.

If the Chinese state visit had you worrying about America's decline and China's ascendancy, you'll want to read this week's "Book of the Week". It's called "The Future of Power," and it's one of the nation's best thinkers on international affairs, Harvard University's Joseph Nye. He says we have to throw out the old definition of power, who has more nukes, who can output more widgets each month, now defines power quite simply, the ability to obtain the outcome you want. And he says by that definition America is not in decline and will probably remain the most powerful country in the world for decades to come. A refreshing and smart read about an absolutely crucial subject.

Now for "The Last Look", if you've ever wondered and I hope you haven't, what a town looks like after it's been hit by 50,000 pounds of bombs, you don't have to wonder anymore. Pictures were posted on Tom Ricks' wonderful Best Defense blog of the Afghan Village of Tarok Kolache. This is the before picture and this is the after picture after 49,200 pounds of ordinance were dropped on the village. Amazingly, the official report says there were no civilian casualties.

The correct answer to our "GPS Challenge" question was B, the White House served rib eye at this week's state dinner as part of, quote, "quintessentially American" evening which was the request of the Chinese delegation.

Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for RELIABLE SOURCES.