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FAREED ZAKARIA GPS

Interview With Paul O'Neill, Robert Rubin; Interview With David Brooks

Aired April 24, 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.

On today's show, two former Secretaries of the Treasury tackle the nation's debt and economic problems -- Robert Rubin and Paul O'Neill.

And "The New York Times" columnist David Brooks on what it takes to make people successful at work, in love, in life.

Also, did you know you can rent a country? We'll tell you how.

That, and much more. But, first, here's my take.

Everyone has been in a panic this week over America's impending fiscal collapse, but I think the reality is that America does not face an immediate debt crisis. Take a look at the simplest indicator, the day that Standard & Poor's raised its now famous warnings about America's debt, markets decided to lower America's borrowing costs and the dollar rose against its principal alternative, the euro.

See, the real problem for America may well be that it does not face a short-term crisis. Over the last few years, everyone has been worrying about America's debt, and despite all that public worrying, markets keep lowering the rates at which we can borrow money. Why? Well, around the world, people, countries, companies, are looking for safe, liquid investments, and the market's judgment is that the safest such investment is Uncle Sam's debt.

Imagine you're the head of China's central bank. You need to invest tens of billions of dollars every year in something secure and liquid so you can get your money back when you need it. There are few good options. You could invest in European bonds, but you've been spooked by the recent series of euro crises. It's fair to ask, will the euro in its current form even be around in 10 years?

Then there are Japanese bonds. You could invest in those, but Japan has the worst balance sheet of the major countries, with debt at 200 percent of GDP, slow growth and a rapidly aging population. Plus you, the Chinese, hate the Japanese, have never forgiven them for World War II, and are not likely to do anything to shore up the yen as a global currency. You could invest in your own bonds, but that would drive up the value of China's currency and make your exports more expensive, which means fewer jobs at China's manufacturing companies.

My point is that Beijing buys U.S. Treasury bills not out of any great love for America, but for good practical reasons. It's why others buy them as well.

The short-term news about the U.S. economy is also positive. Last week, the IMF issued a report on global growth that confirms that the U.S. is likely to be the fastest-growing of the world's advanced economies. In fact the real problem is that this short-term good news means Washington isn't really acting as if it faces a crisis, no matter the rhetoric.

Democrats are still clinging to entitlement programs -- Medicare, social security -- with no talk of real cost cutting, though the current system is clearly unaffordable. Republicans are playing politics with the vote to raise the country's debt ceiling and are still blind to the inevitable need to raise taxes. People are still pushing their ideologies rather than fixing the problem.

Once again, it looks like the American economy will outperform expectations and temporarily relieve politicians from having to make hard choices about entitlements and taxes. But this will only postpone the day of reckoning and make the crash more painful.

You can read a fuller take in "Time" magazine this week. This issue is the "Time 100", that eagerly awaited list of global influentials. Did you make it? Well, take a look on newsstands or at Time.com.

Let's get started.

(BEGIN VIDEOTAPE)

ZAKARIA: So, can we avoid the day of reckoning that I just talked about? To answer that, I am very pleased to welcome back to the show two former Secretaries of the Treasury, one from either side of the aisle.

Robert Rubin was the 70th Secretary of the Treasury and served under President Bill Clinton. Paul O'Neill held the post under President George W. Bush and was the nation's 72nd Secretary of the Treasury. Gentlemen, thank you for being here.

Paul, you -- you ran -- you did run a big manufacturing company, Alcoa. You -- you're on boards of others. From your perspective, what does the American economy look like today?

PAUL O'NEILL, FMR. TREASURY SECRETARY: I think we're doing reasonably well, given the set of problems that we experiences. We're growing at 2.5 or three percent real growth, I think. We need something more than that to make a serious dent in unemployment.

But what I'm seeing in the industries that I know a lot about is reasonably good demand growth around the world, including in the U.S. And, you know, one -- one of the things that happened to the private sector, the private sector companies responded with force to the downturn and they've so improved their operations that they're recording many times record levels of profit. So I think in spite of all the shocks we've had and the ongoing three wars and -- and the rest of that, we're doing not bad.

ZAKARIA: Bob, there's a -- a poll in "The New York Times" about incredible pessimism, the mood of Americans. You've been through these cycles before.

Is this just a time lag? Is it that most Americans aren't aware that the economy is picking up? Is it that the employment problem just isn't picking up fast enough? What -- what explains the really despondent mood of America?

ROBERT RUBIN, FMR. TREASURY SECRETARY: Well, you do have high unemployment of 8.9 percent, but if you take into account, Fareed, both the temporary workers, the people who are temporary workers who would like to be full time and also the people who left the workforce, the real number is probably something close to 16 percent. So you have that.

But I think there's another factor -- and then higher oil prices and higher food prices. But I think there's another factor that really is very troubling, Fareed, and that is I think the American people are watching our political system, and they watched all of this debate over a continuing resolution. The debate never should have taken place because it was over an irrelevant amount of -- of cutting.

And now you have the question of a debt ceiling, and now -- and then you have Standard & Poor's, which is telling people -- we've already known for a long time, which is that we have a terrible fiscal problem. And I think people are worried about our political system and whether or not it can deal with our problems, and I think that's also undermining confidence, and it makes it all the more important that we act, and act effectively on these very large challenges that we face.

ZAKARIA: So let's take the next crisis that people are talking about -- the debt ceiling. You had to deal with this when you were Secretary of Treasury. Do you think that it is irresponsible for Congress to -- to try to attach any conditions to the debt ceiling?

RUBIN: I think two things, and I -- I thought in 1995, when we managed the last really serious impasse around -- or confrontation around the debt ceiling, and I feel it even more strongly today, which is the debt ceiling should never be part of the budget negotiations, an anachronism.

We have a very, very serious fiscal problem. Our fiscal position is unsustainable. It is deeply dangerous. We need to deal with it. We need to deal with it effectively, while at the same time promoting public investment for competitiveness. But that should be a totally separate matter from the debt ceiling, and we should pass the debt ceiling without any conditions and then engage in a -- while, at the same time, engaging in a serious budget negotiation.

I think an impasse or serious threats with respect to default are highly irresponsible. I think they can do great confidence -- great damage to confidence in our political system and also potentially to our markets. And the idea of default itself seems to me should be absolutely unthinkable.

ZAKARIA: Paul, would you agree on the debt -- debt ceiling?

O'NEILL: Absolutely. You know, when I was Secretary, and we were heading into this kind of a crisis about raising the debt ceiling, and I signaled people in the Congress, I was not going to do the tricks that Treasury Secretaries had been doing to give them a little bit more running room.

But, you know, I -- this is really kind of ridiculous. Right now, we've got $14.6 trillion worth of acknowledged debt. We actually have $75 trillion worth of unfunded liabilities. But, in order to get by the next election, say beyond November of 2012, they need to raise the debt ceiling by at least $2 trillion.

Now, here's another irony, with all this breast beating about the Ryan plan and the Obama plan and Erskine Bowles and Simpson. With the Ryan plan, which people hold out as Draconian, Ryan would have us add $6 trillion worth of additional debt before we start to make a dent. And so --

ZAKARIA: Because he doesn't do anything for 10 years.

O'NEILL: Absolutely. And, you know, the plan was viewed by most people as most responsible would not create a balanced budget again until 2037.

ZAKARIA: That's the Obama plan, right?

O'NEILL: Well, no. That's the Simpson-Bowles.

ZAKARIA: That's the -- sorry. That's the Simpson-Bowles. Right.

O'NEILL: We don't know when the Obama plan would create another balanced budget. And, I have to tell you, it may be the function of getting old, but the idea that -- that responsible people would say it's OK not to have another balanced budget for 26 years is just unbelievable to me.

And I think it's part of a response to your question about why we have this feeling, the population, that things are not good. I think people, even if they don't understand the details of the numbers, have this gnawing concern that our society is headed for a cliff that we're not going to be able to recover from.

ZAKARIA: But you would agree with -- with Bob that it's irresponsible for the Republicans to play with the debt ceiling?

O'NEILL: Absolutely. If they want -- if they want to pass a debt ceiling that's true to what Ryan has proposed, then they ought to add $6 trillion in this next -- in this next debt ceiling.

RUBIN: I think I have a slightly different view, Paul. I totally share your view that our fiscal situation is dangerous. But I think whatever budget we put in place to deal with it -- I actually liked this Simpson-Bowles plan. I liked Obama's plan, for that matter, although somewhat different.

But it -- it is going to take us time to get back into a better position, so I think the objective of the Bowles plan with -- and -- and also of Obama's plan -- was to get to a point where the deficit comes down to the level where the debt as a percentage of our economy begins to fall. At the same time, you have public investments to promote competitiveness and so forth.

So I think however we do this it's going to take time to get back to balance. I totally agree with Paul. At some point, we've got to get back to balance, but I think it's going to be in two phases. One, we do something along the lines of what Bowles or Obama have laid out, and then somewhere down the road we deal with our health care problems and, that takes us the next step to balance.

ZAKARIA: Do you -- do you agree with Bob that you've got to have, in a sense, a kind of a short-term fix and a long-term fix? I think that's what he's saying.

O'NEILL: You know, I think our problems are so serious that we should open up the box and think about the fundamentals of how we run our society, all right? So there's all this conversation about levels of taxes and deductions and credits and stimulus and all the rest of that.

So one of the things I liked about Simpson-Bowles is they raised the -- they opened up the issue of what we should do about taxes. So I think we should open up more dramatically. I would propose that we get rid of individual income taxes and corporate income taxes and payroll taxes and replace it all with a value-added tax.

Right now, according to the most estimate --

ZAKARIA: So -- so that people just understand. So what you're saying is, in effect, you get rid of all those taxes and you put in place kind of a national sales tax. So what you're doing is you're taxing consumption?

O'NEILL: Right.

ZAKARIA: Which is something Americans do somewhat excessively, and you're not taxing income, right?

O'NEILL: And -- and you're not taxing investment so you let --

ZAKARIA: Right. Right.

O'NEILL: -- you let things fall where they are.

But think about the collateral consequence. It would no longer make any sense for lobbyists to go to Washington to lobby for beneficial things for their interest groups in the tax code.

Right now, according to the latest estimates, they have cost our economy $431 billion a year to administer the system, and another $400 billion a year isn't collected because the 15,000 paid tax code is incomprehensible and unenforceable.

So if we're going to have an adult conversation, why don't we go back to the fundamentals and ask ourselves the question, how should we distribute the burden of paying for necessary public goods? That would be a useful conversation.

ZAKARIA: All right. We are going to have that conversation and more when we come back. I'm going to ask Bob Rubin what he likes about the Obama plan, what he doesn't like about the Ryan plan.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

RUBIN: We can do this substantively, although it's difficult. Do we have the political will? And that, I think, is really going to determine, or may very well determine the future of our country.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with two former Secretaries of the Treasury, Robert Rubin and Paul O'Neill. We're talking about the various plans to deal with the budget.

You made a comment that you liked Simpson-Bowles, which is a -- a more dramatic plan, in some ways, than the Obama plan, but you also said you liked the Obama plan. I take it that means you didn't like the Ryan plan. Let's start with that. Why do you not like Paul Ryan's plan?

RUBIN: Let's start -- I think I can more easily explain why I didn't like the Ryan plan by saying what I liked about --

ZAKARIA: OK.

RUBIN: -- if I may, about the deficit reduction -- the Deficit Commission and -- and the Obama plan. Because what they did, and it's a little bit like what Paul said. I think having that kind adult conversation that Paul mentioned, if we could have it in our political system, would be an extraordinarily constructive thing to do. I think within the limits of our political system, I think we are probably going to have to do a lot less.

But I think that the -- the Bowles commission, and also the Obama plan, put taxes on the table, because you cannot -- you cannot deal with this, Fareed, and meet the needs of our society that are met through the budget without increased revenues. The other thing that I liked about both of them, or another thing, was they put entitlement reform on the table. And, thirdly, they set out -- and then certainly -- particularly in President Obama's plan, he stressed the importance of public investment for competitiveness, which is absolutely critical.

And then they set out a specific target, and I think a very important target, on deficit reduction, which was to get $4 trillion of savings and then get the deficit to the point where the debt -- the debt, relative to the economy, first stabilizes and then starts to decline.

If we can do that now, then we buy a long period of time, and during that long period of time we then have to focus on an issue that I know Paul knows an enormous amount about, which is our health care system. The rapid rate of increases in our health care system, and what we're going to do to constrain that rapid rate of increase, even if, even if President Obama's health care reform plan is as effective as its advocates claim. There's going to have to be a great deal done more.

ZAKARIA: So, when I look at the Republicans, I think one of the areas that is distressing, as you point out, is that there's a sort of fundamental unseriousness, because ultimately it's impossible to make this work without increased tax revenues.

RUBIN: Correct.

ZAKARIA: But when I look at the Democrats, you know, the Simpson-Bowles Commission called for raising the retirement age on social security by one year in 2050, and this led the House Democrats to go crazy.

If you look at Obama speech, there's not much in terms of -- there's nothing on social security, there's nothing fundamentally about Medicare. You'll still have Medicare, social security, Medicaid taking up a huge part of the federal budget.

Neither side seems willing to make the painful choices from their perspectives.

RUBIN: Well, I -- I think that we're going to have to address entitlement reform. As I recollect it, at least, on the Medicare area, Fareed, what -- what President Obama said was it should increase at the rate of GDP plus half a percent, which would be a substantial -- a very substantial improvement over where we've been. Now, how we're going to get there, the specifics of getting there are obviously going to be very complicated.

And I -- I read -- I guess I read his speech on social security a little bit differently in the sense that he left it open to work with Congress. And he sort of set out a framework.

I think the plan itself makes sense, and I think it's imperative that we do something in the neighborhood of Simpson-Bowles or President Obama. And I think it is going to come down to the point you just raised. We can do this substantively, although it's difficult. Do we have the political will? And that, I think, is really going to determine -- or may very well determine the future of our country.

ZAKARIA: How do you rate the politics of this? Do you think Obama was too harsh on -- on Ryan's plan?

O'NEILL: You know when, he was a -- a candidate back in July of 2008, I had an opportunity to attend a meeting with the -- with the presidential candidate and a -- and a number of other people, and I said something to him I believe even more strongly now. At the top of my 20 minutes or so of remarks, I said to him I believe presidential politics needs to be about truth telling and educating the people, not about pandering.

And if there were -- if there was one basing idea that would help us to do what we need to do, it would be for the president to tell us the bitter truth. No politics, no worrying about the next election, but a truthful telling of where we are and the things we need to do in order to be in a place where we're a sustainable America.

ZAKARIA: And did he do that?

O'NEILL: No. You know?

So here, let me -- Simpson-Bowles numbers, again, which are more favorable than his. In 2020, under the Simpson-Bowles plan, the national deficit would be $383 billion. Doesn't that strike anybody as unbelievable?

And so it would be good if the president would say to people, this is where we really are. Forget about the politics, and then open up the fundamental questions. How should we, as a people, want to distribute the cost of paying for agreed public goods and services? And which public goods and services do we want?

You know, I think it -- it's interesting to me how we've kind of gone off a track, and I -- I -- you know, this has long, deep roots and a long time track, but I think the decision to go to Iraq as a preemptive war was a monumentally important concept changer, so that when we decide to go to Libya, there's hardly a whimper that the United States is now going to get engaged in another war from -- from on high, to be sure, but I think that's the thing that's really concerning. Now, people saying what's happened to the fundamentals of our country?

RUBIN: Paul, just on your point, if I may.

O'NEILL: Sure, sure, sure.

RUBIN: I think it's -- I totally agree with you. It is imperative we get on the right track fiscally. I think we're on a very -- and if we do, we have great strengths. I think we can succeed. And this is a question of political will.

I don't think we can get there overnight. In 1993, when we put together a deficit reduction program which was really effective, and I think was -- was central to the -- what was the best -- the longest lasting economic expansion in the nation's history, we allowed many, many years to get from where we were to where we were -- where we're aiming.

ZAKARIA: You've got the trend line right rather than trying to solve the problem.

RUBIN: We got the trend line right. And I think the -- what we've got to do here, but the politics are going to be -- it will be very, very difficult, is act on all fronts, including increasing revenues. As you said, reforming entitlements but maintaining an effective social safety net.

What we've got to do is get the deficit to the point where it's low enough so that our debt, our debt, as a relative -- as a percentage of our economy, begins to decline. Then I think we need to take the next step, which is to -- to do exactly what Paul said, which is to focus on our health care system. And -- but this would be many years out. And then, go from there and move towards balance.

ZAKARIA: Robert Rubin, Paul O'Neill, we'll have you back in six months to see whether we've solved this problem. I suspect not.

RUBIN: Six months, we go to the same (inaudible).

ZAKARIA: We will be right back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

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

What got my attention this week was an article written under the pseudonym Mr. Y. The article has a bold thesis, even more surprising given who the mysterious Mr. Y turns out to be.

It argues that the United States has embraced an entirely wrong set of priorities, particularly with regard to its federal budget. We have overreacted to terrorism, to Islamic extremism. We have pursued military solutions instead of political ones.

Y says we are under investing in the real sources of national power -- our youth, our infrastructure, our economy. The United States sees the world through the lens of threats, while failing to understand that influence, competitiveness and innovation are the key to advancing American interests in the modern world.

So, Y says, above all we must invest in our children, that only by educating them properly will we ensure our ability to compete in the future. That we need to move from an emphasis on power and control to an emphasis on strength and influence.

Y goes on to say that we shouldn't even talk about national security as we have for the past 60 years, we should be talking about national prosperity and security.

Now, I think this is very smart stuff for the new world we're entering in, but it's important and influential in particular, given the source. This article arguing we need to rely less on our military comes from the highest echelons of the Pentagon.

Mr. Y is actually two people, both top-ranking members of Admiral Mike Mullen's team, the Joint Chiefs of Staff. They are Captain Wayne Porter of the U.S. Navy and Colonel Mark Mykleby of the Marine Corps. It's likely that the essay had some official sanction, which means that the Chairman of the Joint Chiefs of Staff or perhaps even Secretary of Defense Robert Gates had seen it and did not stop its publication.

So why did the authors call themselves Mr. Y? It's a play on a seminal essay from "Foreign Affairs" magazine more than five decades ago. The title was "The Sources of Soviet Conduct," and it was signed simply X. The author turned out to be the American diplomat George Kennan, and the article turned out to have perhaps the greatest influence on American foreign policy in the second half of the 20th century.

It set out the policy of containment, that if we contain the Soviet Union, countering its influence, eventually the internal contradictions of the Soviet system would trigger its collapse, and it worked. But Porter and Mykleby say the basic approach, a massive military to deter the Soviets, a quasi-imperial policy to counter Soviet influence all over the world, is still in place and is outmoded and outdated. They call their policy proposal sustainment, and they hope it just might be the policy that will carry us forward for the next 50 years.

Mr. Y is hoping to be the next X, to set the new tone of Washington strategy. Will that happen? Well, the term "sustainment" is silly, but the ideas behind it are not. Washington needs to make sure that the United States does not fall into the imperial trap of every other superpower in history, spending greater and greater time and money and energy stabilizing disorderly parts of the world on the periphery, while at the core its own industrial and economic might is waning.

We have to recognize that fixing America's fiscal problems, paring back the budget busters like entitlements and also defense spending, making the economy competitive, dealing with immigration, outlining a serious plan for energy use, all these are the best strategies to stay a superpower, not going around killing a few tribal leaders in the remote valleys and hills of Afghanistan.

You can read Mr. Y's essay on our website, CNN.com/GPS. Read it, debate it and write to your congressman if you agree with it.

And we'll be right back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP) DAVID BROOKS, COLUMNIST, "THE NEW YORK TIMES": The things that really account for who succeeds and who does not happen below the level of awareness, so it's things like who can relate to who. Who can look at a situation that's complicated and pick out a gist. Who can combine two gists.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: My next guest is David Brooks, the "New York Times" columnist.

Now, if you've come expecting political punditry, this is even better. Brooks has a new book "The Social Animal" that explores a fascinating topic, what makes someone successful -- at work, as a husband, as a parent, in life. He draws an amazing range of scholarship.

Do you have what it takes? You'll want to hear what he has to say. Welcome.

BROOKS: Great to be with you, Fareed.

ZAKARIA: Why do people succeed? We think of success and we think about it as doing well on tests, being very smart, being analytic. You say that there is a deeper meaning to success.

BROOKS: Right. So we've got sort of a bias in our culture which encourages us to raise our kid to get into the right schools, to get good SAT scores, to get the good grades, to get some professional skills and that's all perfectly fine.

But the things that really account for who succeeds and who does not happen below the level of awareness. So it's things like who can relate to who, who can look at a situation that's complicated and pick out a gist. Who can combine two gists.

So, for example, a little child can say I'm a tiger and that seems so simple to us. But -- and no computer could do that, because to take a complicated thing I and a complicated thing tiger and merge them together is phenomenally difficult, but that's actually what creativity and innovation is, merging two things to create a third thing.

So there are all these processes that are going on deep inside our minds that really account for what -- who achieves and who doesn't. And if you want to go to a kindergarten class and figuring out who's going to do well in life, you can give them an IQ test and that will tell you something.

But ask the kids who is friends with who in this classroom and some kids just are aware of social networks. They're aware of human relationships. Those kids are going to do pretty well. ZAKARIA: If you look at the CEOs of, you know, America's biggest companies, some of the best entrepreneurs, most of them haven't gone through this -- this sort of Harvard, Yale, Princeton -

BROOKS: Right.

ZAKARIA: -- they haven't jumped every hoop. They often come from smaller colleges. I've always assumed that part of that is that the people who really make it to the top have this incredible drive -

BROOKS: Right.

ZAKARIA: -- and that, you know, part of it is actually having been on the periphery and being on the margins. It is also that you think they are better social animals?

BROOKS: Yes. Well, I think that's part of it. Partly they take risks. The average self -- the self-made millionaire in this country had an average collegiate GPA of 2.7, a C plus. The A students can get into law school or something and they have secure roots to decent affluence, but the ones who really take risks are the ones who are sort of down below and they're more risk takers and they don't fit into the cookie cutter model of education. But they have commonly several traits.

And there's no one formula for success. But they tend not to be too charismatic often, but they tend to be -- and they have done studies on this. The charismatic types, you get occasion, Jack Welch, somebody like that. But -- but most tend to be ordered, disciplined execution. They tend to do the same thing over and over again in a very reliable, predictable way. And so they're really into detail, execution and order.

Those are the sorts of personality that more often than not lead to business success. Not flashiness, but just doing the thing and having a compulsive need to get it right. And then an awareness of how to work in groups, groups are smarter than individuals. Groups that meet face to face are a lot smarter than groups that communicate electronically. And so some people have a compulsive need to soak up information from people around them.

I was with Michael Milken recently. And he's one of those guys who just soaks you in. He just wants to learn everything he -- he can from every single person he meets and that actually is a pretty valuable trait.

ZAKARIA: But are you saying that the conventional method, the way we try to figure out how people are going to succeed, the way we prepare them for success, is in some sense wrong then?

BROOKS: Yes. I think we have human nature wrong. You know, I think we have a tendency to value the things that we can count and measure and we sort of underplay the things that are emotional. We're really good talking about material things and economic incentives, bad at talking about character, bad at talking about emotions. And so there's this vast bias in our culture. And I got into the subject because I covered, say, the decline of the Soviet Union and we sent in all these economists. But what's really lacking in Russia was the lack of social trust. We were not (INAUDIBLE) about that. In Iraq, the U.S. sent in military, but we were oblivious to the social and psychological complications of the place.

And so time after time again, in how we raise our kids are in vast policy areas, we emphasize the things we can count and measure. We underemphasize character, morality and emotions.

ZAKARIA: But you talk about this morality almost as if -- as if it's a science. So if you -- if you look below the surface, you say there is all this new research coming out of social science, psychology, the neuroscience as well that tells you that human beings are spending a lot of time trying to figure out this world.

BROOKS: Right.

ZAKARIA: And the crucial part is what? Is the crucial part relating to one another?

BROOKS: Well, say in the case of morality, we have a folk wisdom that we think through principles and come up with right or wrong, but that's not actually how morality works. Morality is more like taste. You instantaneously know whether something is fair. Nobody needs to tell a 2-year-old what's fair or not.

And so when someone is not listening to us, so when someone is disrespecting us, it's not a rational thing we think this is wrong, it's a visceral and emotional reaction. And so, you know, even in Egypt and the tides we've seen across the Middle East, people feel emotionally insulted. And when they rise up, they feel emotional pride. And the emphasis is that these are deep emotional responses and our emotions are not stupid.

We think from Freud that the unconscious is this tangled zone of sexual urges. It's not. It's trying to help us figuring out the world. It's just doing it in a different way than our conscious processes, and in some way it's a much smarter way. If you have trouble making up your mind about a subject, flip a coin, tell yourself you're going to, OK, I'll settle it by a coin flip. But then don't come up -- don't decide on the basis of what the coin says, go on the basis of your emotional reaction to the coin flip. Are you happy or sad it came up that way and that's your inner mind telling you what it really wants, but it hadn't told you until that point.

ZAKARIA: And I never thought about this, but I have a story that completely proves your point.

I was applying to colleges from India when I was 18 years old. Eight thousand miles away, I have no idea what the differences between these colleges were. And I was choosing between two roughly similar colleges.

BROOKS: Yes. ZAKARIA: And I did a coin toss. It came up for college B.

BROOKS: Really?

ZAKARIA: I did it. I decided let's make it a best of three. It came out for college A -

BROOKS: Yes.

ZAKARIA: -- which is where I wanted to go in the first place.

BROOKS: Right.

ZAKARIA: I have no idea why, but there was just some gut instinct.

BROOKS: Yes. A lot of what goes on, we don't know. It's one of those sources of wisdom is actually knowing what's going on in yourself or knowing how to correct for the failures of yourself. Because we have a tendency -- sometimes the unconscious is very smart, sometimes some problems. So one of the problems it tends to have is overconfidence.

So 96 percent of college professors think they're above average teachers. And 94 percent of college students think they have above average leadership skills. We tend to overvalue ourselves, so -- and this is particularly a male trait. Men drown at twice the rate of women because men think they can swim across that lake and women know they can't. And so -- but building boot straps for yourself to prevent yourself from acting on that overconfidence is tremendously important.

ZAKARIA: Take us through what would be the David Brooks' path to success.

BROOKS: Yes. Well, some of these are traits that we don't think about. So, for example, my newspaper ran a great story a couple of years ago about soldiers in Iraq, and they could look down a street and they could tell whether that street had IEDs, mines on the street. And they couldn't tell you exactly how they knew, they just got a coldness inside.

And so some people have this ability to describe -- to just perceive and feel.

ZAKARIA: Is this a sort of pattern recognition?

BROOKS: It's pattern recognition. And they know when something is slightly wrong.

ZAKARIA: But, now, am I thinking of this the wrong way if I say can you train for pattern recognition?

BROOKS: Yes, by experience. And so what you do is if you learn to see closely by experience, and then not only see, you have to see, but then you have to consciously focus on what you're seeing, maybe write it down afterwards and then let it stew and then re-remind yourself and see closely and then go through this process where you're consciously writing down, unconsciously processing back and forth like a valley. And then you'll begin to see the world in a much more subtle way, because you're seeing the grand patterns. And that just takes hard work, repetition and rigor.

ZAKARIA: When we come back, we are going to soak in some more from David Brooks. I'm going to ask him how all this relates to politics, international affairs, cultures, when we come back.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ZAKARIA: You have a famously complex relationship with President Obama. You admire him at some level, but in -

BROOKS: Right.

ZAKARIA: -- many ways you're right off center and disagree with him politically.

BROOKS: Right.

ZAKARIA: Is he a social animal?

BROOKS: Yes. He's multiple animals.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Time for a check of today's top stories.

An Israeli man was killed and four worshipers were wounded early Sunday morning near Joseph's tomb, a Jewish holy site in the West Bank. An Israeli spokesman says a Palestinian policeman open fire on the group. By failing to coordinate their visit with Israeli or Palestinian officials, the men did not follow protocol.

Flights at the St. Louis Airport have resumed this morning and are running on schedule according to an airport spokesman. Friday's tornadoes knocked out power, shattered windows, sent passengers scrambling for cover. No deaths or life-threatening injuries were reported and crews are working to clean up the damage.

In his Easter Sunday message, Pope Benedict urged an end to fighting in Libya, calling for diplomacy and peace across the region. Thousands of pilgrims and tourists gathered in St. Peter's Square to mark the Easter celebration.

Those are your top stories. Up next, much more FAREED ZAKARIA GPS and then "RELIABLE SOURCES" at the top of the hour.

(COMMERCIAL BREAK) (BEGIN VIDEOTAPE)

ZAKARIA: And we are back with David Brooks talking about human nature and a few other small things.

So when -- when you look at the kind of thing you're talking about, that human nature is more complex, it's softer, don't stress as much achievement as stress interrelationship, it all sounds very soft. And I'm thinking to myself that some -- you know, the Chinese and the Indians are sitting there, whipping their kids into shape, making them succeed.

BROOKS: Right.

ZAKARIA: And that at the end of the day, they will win the race because we'll be sitting here contemplating the good life -

BROOKS: Yes.

ZAKARIA: -- and they'll be sitting there out competing us.

BROOKS: Yes. Well, first of all, I would say in the case of the Chinese, this has been subject -- subject of much study. They're not only whipping their kids into shape, they have different cultural attitudes. And one of the differences between Chinese and American culture is in how we see the world.

And so, if you take the average American, these are averages across many wide diverse groups, and you look at the way they look at the Mona Lisa, the American will look into the eyes of the painting and the mouth of the character. The Chinese eyes will move all over. And as a famous experiment, which is a bit of a cultural stereotype but with some basis, which is the fish tank, you probably know.

ZAKARIA: You probably tell (ph).

BROOKS: So if you look -- if you ask a Chinese or an Asian person to look in a fish tank, they'll describe the context of the fish, how they interrelate. If you ask an American, they'll just describe the biggest fish in there. And so we tend to think -- see in individual terms.

ZAKARIA: And so, how is it that American culture with all its, you know, reckless individualism has dominated the world -

BROOKS: Right, right.

ZAKARIA: -- for the last 300 years and China with all its contextual has been one of the poorest countries?

BROOKS: Well, as I say, there's no one formula. But I would say it's first individualism does encourage the sense I can rise ferocious -- a sense -- if you tell people these two things, the future can be better than the present and I have control over my future, those are two powerful ideas that not all cultures are born with and those are powerful ideas that motivate people to change. ZAKARIA: But ultimately, you're talking about living a good life. Can't you see some -- you know, some -- again, Chinese tiger mom saying, yes, but I want them to score 102 on a 100. I want them to, you know, to make $5 million a year.

Your book is more about -

BROOKS: Yes.

ZAKARIA: -- living a good life rather than kind of high-powered (INAUDIBLE).

BROOKS: Now, this is where I -- hey, I think it's always a mistake to divide the hard and the soft and to think if you work on the hard you'll get good, if you work on the soft you'll just lead a happy, satisfied life.

My argument is the soft leads to the hard. So if you want to really do well in business, say, make a lot of money, you really have to understand people and it's through the emotions you do that. The emotions are contributed to the building up of human capital and are not divorced from it. And we have an attitude where we think if we test, if we force homework, we're going to produce these high achievers.

I would say that's part of it, you've got to do that stuff. But you also have people who have wisdom who can read the patterns of the world.

ZAKARIA: When you look at certain politicians in Washington, how do you -- how do you map this -- this research, these ideas you have? You have a famously complex relationship with President Obama.

BROOKS: Yes.

ZAKARIA: You admire him at some level -

BROOKS: Right.

ZAKARIA: -- but in many ways you're right off center and disagree with him -

BROOKS: Right.

ZAKARIA: -- politically. Is he a social animal?

BROOKS: Yes. He's multiple animals. You know, I would say we're all -- we all have multiple personalities. My psychobabble description of him is he's a very complicated person who has many different selves, all of them authentic, but they come out in different contexts. And he is -- has always has the ability to look at other parts of himself from a distance, and so it means he has great power to self correct and I think it gives him power to see himself. It means that he rarely is all in.

You know, President Bush didn't have as much -- many multiple selves, so when he made a decision he was all in, he was just going to be there. But as I think President Obama is much more cautious, because he's a man of many pieces and many parts and not all of which I understand or I think anybody understands. But it may -- it leads to that caution that we see time and time again and almost a self distancing I see.

In general, though, the politicians I cover are tremendously attuned social animals on the campaign trail. The problem is that when they go into government, they start talking in the language of CBO reports and they become very dehumanized when they're doing government, where they sort of take away in many ways the strength that they have.

ZAKARIA: David Brooks, pleasure to have you on.

BROOKS: Oh, great. Thank you.

ZAKARIA: And we will be back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAKARIA: Our question this week from the "GPS Challenge" is what did Russian Prime Minister Vladimir Putin say would rise by 25 percent in four years? Is it, A) World sea levels; B) Russia's GDP; C) Putin's personal wealth; or, D) Russia's birth rate?

Stay tuned. We'll tell you the correct answer. Make sure you go to CNN.com/GPS for 10 more questions. While you're there, don't forget to subscribe to our podcast if you haven't already. That way you'll never miss a show and it's free.

This week's book is "The Best Advice I Ever Got." It's Katie Couric's new book that features life lessons from everyone to Mike Bloomberg, to Donald Trump. Yes, I wonder what that one is. From Jimmy Carter to Bill Clinton, from Melinda Gates to Martha Stewart and there is a chapter by yours truly. The best part is the proceeds from this book help send worthy kids to college.

Now, for "The Last Look." You've heard of renting a palace, renting a mega yacht, even renting an island. How about renting a country? For $70,000 a night with a two-night minimum and a very strict cancellation policy, you can rent Liechtenstein. Yes, the entire country, for a conference, a party, whatever you drum up for you and your 900 closest friends.

Now, if you're forgetting your high school geography, Liechtenstein is a tiny Alpine country, population 35,000, tucked between Austria and Switzerland.

So what to do with your own nation? Well, how about starting with a wine tasting at the prince's estate while watching your own fireworks show. You want to make this a very personal experience? You can rename the city streets and town squares as you wish and even print your own temporary currency with your face on it. Now, if you do decide Liechtenstein is the perfect place for your party, please don't cause too much of a ruckus. The nation has only a handful of police officers and no military.

This week's "GPS Challenge" question was what did Putin promise would go up by 25 percent in four years? The answer was D, the nation's birth rate. Russia is trying to reverse its terrible demographics.

Thanks to all of you for being part of my program this week. I will see you next week when the show will be 100 percent royal wedding-free.

Stay tuned for "RELIABLE SOURCES".