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PIERS MORGAN TONIGHT

Interview With Thomas Friedman; Interview with Rudy Guiliani

Aired September 7, 2011 - 21:00   ET

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


PIERS MORGAN, CNN HOST: Tonight, keeping America great. Two men with very strong opinions about this country and President Obama.

He says the president like Tiger Woods is just off his game. And he says 9/11 was a missed opportunity for America.

And I'll ask Tom Friedman what it will take to solve the jobs crisis.

Plus Rudy Giuliani. What he thinks the president should say to get America working again.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: This speech the next night is going to be really important. I think it's his last chance to be moderate. It's his last chance to do a Bill Clinton.

(END OF VIDEO CLIP)

MORGAN: And why he says 9/11 was not the end of the terror threat to America.

(BEGIN VIDEO CLIP)

GIULIANI: There have been at least 40 attempts to do such attacks in the United States since then. A lot more than people realize.

(END OF VIDEO CLIP)

MORGAN: Rudy Giuliani, Tom Friedman. Serious people for serious times.

This is PIERS MORGAN TONIGHT.

What will be one of the most important speeches of the Obama presidency. Just days away from the tenth anniversary of 9/11, a critical time for this country and for the White House.

The president goes to Capitol Hill tomorrow night. He's expected to unveil a huge $300 billion jobs program. With new spending on highways and rail systems and targeted tax cuts. Paid for in part by closing corporate loopholes and raising taxes on the wealthiest Americans. That's the advance word from Democrats familiar with the plan. But with some congressional Republicans already planning to skip the speech, will this be a turning point for America? Or just business as usual in war-torn Washington?

Joining me now, a man with strong opinions about the state of the nation. Thomas Friedman is a columnist from the "New York Times" and the author of "That Used to be Us: How America Fell Behind in the World," and invented on how we can come back.

Tom Friedman, you wrote a pretty damning column this morning in the "New York Times," basically saying that as all these Middle Eastern dictators get toppled because they've been found wanting in the truth department, so the same thing is happening to democracies because the wider public armed with social networking and so on can now see through the lies.

THOMAS L. FRIEDMAN, NEW YORK TIMES COLUMNIST: Well, I was actually quoting a Singaporean diplomat who had made that point, Piers. The real point of the column was really to look at how two different Republican presidents had dealt with two great historical turning points.

Dwight Eisenhower used the Cold War basically as a vehicle to pull the American people together and to inspire us to do nation- building at home. To build out our highway system. To develop a space program. To put massive research into science, foreign languages. And we basically used the Cold War to make us stronger as a country.

I contrasted that with how we dealt with 9/11 under another Republican president, George W. Bush, who basically used 9/11 to put through two tax cuts we couldn't afford, not pay for two wars, and have a Medicare entitlement program. One left us with a much stronger country, and one left us with a much weaker country.

MORGAN: Yes, but it's an interesting point. I mean I think if President Obama's planning this big speech as we know, he is and stuff is leaking out already, he must be thinking, how do I want to be remembered? If I'm going to be a one-term president, what will my legacy be?

Because at the moment there isn't going to be much of a one, other than the economy got marginally worse than when I took over.

FRIEDMAN: Yes, you almost wish that the president today or tomorrow, Piers, would put out a plan that in some ways would be so big, so exciting, and so demanding that he would basically say, if I'm here for two more years or four more years or, you know, 10 more years, I can't finish it.

That this plan so is so big. It's going to take us so far it needs my term to finish it and the next president to finish it. I sense this is something a little more immediate to juice the economy. That's a good thing. We certainly need the economy juiced. But the question is how much muscle-building is going to be involved in the plan as well?

We'll have to wait to see until tomorrow. I'm still hopeful.

MORGAN: Yes, I mean, look, everyone is hopeful. But it's a very difficult situation for him to find himself in. And no one is pretending that his tenure has been remotely easy with this huge global financial crisis. But I was struck in your column again by the sense of trying to offer Americans something to aspire to, to give them hope again, to give them something to dream about.

You know the space mission, for all its faults, was an incredibly exciting thing. And I was a young lad myself when the first rockets went up. And the world stopped to watch these things. And as they soared up to the moon, all you thought was, isn't America a fantastic country?

I don't see that sense anymore. And it's crying out for something of magnitude, like you say.

FRIEDMAN: Well, you know, I think that's one of the real challenges we have today. What is the great national project that we could, you know, undertake, that would pull us all together, like the space program?

What we argue in "That Used to be Us" is that really what we want to be doing today is what America was -- sorry, what Cape Canaveral was for America in the 1960s, the place where we launched our big single moon shot, we think America should be in the 21st century for the whole world.

What do I mean by that? We want America to be the place where everyone in the world should want to come to start something, to launch something. And we should want them to come here because we have the best infrastructure, because we the best education, because we have the best rules for investing.

You know because we are the place where more people want to collaborate and can collaborate with more other people. I think what we want America to be today is that launching pad where everyone would come to start something. If that happens, there will be plenty of employment, directly and indirectly, that would flow from that.

But there's not going to be one moon shot now. We want America to be that launching pad for startups by everyone.

You'll know when we've succeeded, Piers, when a Chinese company says, you know what? We don't want to be in Shanghai, we want to be in America, because that's the place to launch something and collaborate with people.

MORGAN: But tell me this, Tom. Is it simply too late in the short term? I mean does America have the money to do the kind of elaborate plan that you're talking about? Can it compete with China anymore?

FRIEDMAN: Oh, yes, absolutely. Piers, you know I really believe that -- you know one of the reasons we called this book "That Used to be Us" is that the main argument is that we have within ourselves -- within our history, all the resources, all the ideas we need to go forward.

We actually had a formula for success in this country. And it goes back to Alexander Hamilton, Abraham Lincoln, really all the successful presidents. Built on five basic principles. Education, the best infrastructure, the best education, immigration, attracting the world's most energetic and talented people. The best rules for investing and government-funded research.

Where we've gone off the rails, is if you look at all five of those pillars of success, and they are there throughout our history, you'll see that in the last two decades, the arrow is pointing down on all five.

I tell you, we start to turn the arrows up on all five, and we do have the resources to do that, if we can cut some spending, raise some revenue, and invest where we need to invest, we do that, I tell you, you turn this ship up I think rather quickly.

To me, America is like the space shuttle, all that thrust coming from below. But the booster rocket, Washington, D.C., is cracked right now. And the pilots in the cockpit are fighting over the flight plan. So we can't achieve the escape velocity we need to get into the next industrial orbit.

I tell you, you fix that booster rocket, you get people to come together, and you get the pilots to agree on a flight plan, this country takes off from the bottom up.

MORGAN: You see, I think what everybody is crying out for is proper leadership. And this is where I take issue with President Obama. The way he's played this summer in particular. Because first over this whole fatuous debt ceiling supposed crisis which should never have been the crisis that it became.

It was driven by the Republican Party, driven by Speaker Boehner and others, and the Tea Party. Then you lead into this ridiculous farce over when he could have a speech, when he could make the speech. And he was sort of bullied into changing the day. And I feel quite strongly -- and I'm not even American, but I feel strongly that I want the president to stand up and be the boss.

And I would have called the bluff of the Republicans. If they were going to be that intransigent -- you mentioned there about raising revenue. Now, you know, many Republicans are completely implacably opposed to any increased taxation whatsoever. Exactly the point you made about George Bush in your column today, which is that in times of crisis you have to consider the unpalatable reality.

And I just think most Americans are decent, civilized people and they get it. And they would not mind paying a little bit more if they saw a reward for the extra taxation that was put upon them. What do you think?

FRIEDMAN: I agree with every word you just said, Piers, including "and" and "the." That's what I think. OK?

(LAUGHTER)

FRIEDMAN: And this is what's frustrated me about the president as well. He's played this inside game with Congress all along. And he's actually never leveraged the American people. He's never truly made the big case to the American people.

I've compared him in a recent column to a golfer who in match play is playing not to lose. Not playing to win, just playing not to lose. Playing to get 50.0001 percent of the vote.

And to me that's been a losing hand. If he's for a grand bargain as he negotiated privately with Boehner about, and Boehner walked away from it, why not go to the American people? Lay it on the table. I was for this, call your congressman.

If he believed in that -- because I think the American people understood that that grand bargain, $3 in spending cuts for every $1 in revenue tax increases, was a perfectly fair and sensible deal.

And I guarantee you, Piers, had we passed that, as part of this debt dealing, this economy would be taking off right now. And that's the frustration. And I think a lot of people feel today -- you kind of do a Rorschach test with the American people, you know, hold up a picture of the president and say what comes to mind?

For a lot of people it's just something fuzzy. It's something not clear. He's not in focus. And he needs to get in focus with what he believes, what he's really ready to fight for.

MORGAN: I mean the advantage I think that President Obama has is I don't detect this hatred towards him. I don't detective necessarily that the American public want to him thrown out of office in, you know, ignominious defeat.

I think what they want is to not continue to feel slightly let down and disappointed by a man, that when they watched him be inaugurated, they looked to the guy promising hope, change, audacity, all these things, which I think he has in him. Because when you see what happened with the killing of Osama bin Laden, there you saw a president absolutely on fire. Taking this incredibly risky, bold decision, ordering the hit, and being successful.

And America went crazy supporting him and praising him. I thought that would embolden him. But it doesn't seem to have done it. And you're right, it seems to have pushed him into this weird trap with the Republicans where they're pushing him around. And the American public are willing him to (INAUDIBLE) around the chops.

FRIEDMAN: He's never really summoned them, and never really laid the cards out on the table for them. You know we've always said about, you know, the president, I think so many people voted for him because they thought he could actually change the polls and wouldn't just read the polls. And there's been a lot more reading of the polls than changing the polls, than fundamentally redefining public opinion. And I think that's what a love people are hungry for.

MORGAN: I agree with you. Let me -- we'll have a short break. When we come back, I want to talk to you more about China. I want to know whether they are more of a potential friend, business partner, than they are enemy. And what we should in America, perhaps, envy about China and the way they've gone about their extraordinary economic growth.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It makes no sense for China to have better rail systems than us and Singapore having better airports than us. And we just learned that China now has the fastest super computer on earth. That used to be us.

(END OF VIDEO CLIP)

MORGAN: That was President Obama, November 2010. A comment that inspired the title of Tom Friedman's new book "That Used to be Us," written with Michael Mandelbaum. And Tom Friedman is back with me now.

And Tom, I mean, big words from the president there but not much has changed. As you know we're heading towards a year later and China has, if anything, got even further away from America in many key areas that America used to be so dominant.

There's lots of views about China. Donald Trump views them very passionately as the enemy in terms of the way they go about business and the way they've taken American jobs.

Others, I think, maybe those who've been there a lot, and I've been there, see it as a very exciting, vibrant place, breaking out of the shackles of Maoism, and enjoying being very aggressive, skilled, and hard-working business people.

Where do you sit?

FRIEDMAN: Well, I'm very much in the second category. And I really believe, you know, China is more of a frenemy. That is, or more really our Siamese twin. Neither of us can really thrive without the other. They're rapidly growing, obviously a developing country.

But you know what we say in the book, Piers, is that -- you know, China is -- we wish China well, OK? But we think China has enormous, you know, challenges before it. And whether China succeeds or doesn't succeed really doesn't change anything for us.

You know our view basically is that China is going to have to move much more toward our political system, ultimately. I really believe that. But right now China is getting 90 percent out of what I would call an inferior political system and we're getting 50 percent out of a superior political system.

That's my frustration right now. That we should be getting so much more out of our democracy.

So, you know, I wish China well. It will be a more stable world if they're a growing and vibrant country. But it doesn't hurt us. Economics isn't war. They can win and we can win at the same time.

But you know whose workers do best will depend on how we educate our people, what infrastructure we provide for them, you know what are the rules that we have, how much government research we have. We've got to get our house in order. If we do that, we'll be fine whether China thrives or doesn't thrive.

MORGAN: I want to play a clip from Mitt Romney yesterday who says some pretty harsh things about China. Listen to this and I'll come to you afterwards.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And I'll clamp down on the cheaters. And China is the worst example of that. They've --

(APPLAUSE)

ROMNEY: And they have manipulated their currency to make their products artificially inexpensive. It's hollowed up many of our manufacturing facilities in this country. That's unacceptable.

And I will label China as it is a currency manipulator and I will go after them for stealing our intellectual property. And they will recognize that if they cheat there is a price to pay.

I certainly don't want a trade war with anybody. But we're not going to have a trade war, but we can't have a trade surrender either.

(END OF VIDEO CLIP)

MORGAN: I mean I don't know about you, Tom, but I found it a little undignified actually for a presidential candidate who has a real chance of becoming the Republican nominee to just brand China the worst cheats in the world. I mean I just thought it was a rather crass thing to say about a country which actually in many ways America should be learning from at the moment.

FRIEDMAN: Well, you know, my view on this whole thing, obviously, you know, where China is stealing intellectual property it should be challenged. If it's, you know, artificially, you know, keeping its currency low, that's something we should be taking up with them.

But ultimately, you know, I always, you know, think about China -- you know, there's all these stories about, you know, them stealing this and them stealing that. And I always feel like, you know, the only thing I worry about China is when they steal the things that are hiding in plain sight in America. When they steal the Declaration of Independence, the Constitution, the Jefferson Memorial, the Lincoln Memorial, the Washington Monument. When they start to rip off those, when they start to copy those, that's when I'll worry about China. But if their plan to get rich is to steal our intellectual property, I tell you, Piers, we'll always be inventing something new faster than that. And --

MORGAN: Isn't their plan, though -- isn't it a slightly simpler plan, which is they just want to be -- they don't want to be dominant militarily necessarily, or imperialistic in that kind of sense. They don't want to rampage around the world invading countries. What they want to do, I believe, is an ethos that runs through that country at the top now, as they want to be number one in as many businesses as they can.

And I've been to cities in China, I can't even remember their name, but they produce 85 percent of the world's duvets or 90 percent of the world's buttons, and so on. And when I went to Shanghai, it was just -- it was vibrant, it was exciting. Everyone was positive. They're all fired up.

And I didn't get the sense it was, how can we cheat and defraud America? It's how can we be number one in business? Something that America for a very long time has taken for granted. So, you know, I don't really buy into this whole, they're just a bunch of cheats, and should be treated as such. It seemed -- it's too easy and simplistic to say that.

FRIEDMAN: Right. No, I'm not saying that either. What I am saying, though, is ultimately what matters, I think, all of these things are at the margin. What is their currency valuation, you know, whether they're, you know, stealing 70 percent of Microsoft Windows, or 80 percent, ultimately it's what we do.

Whether we generate that kind of high aspiration to be number one again. Whether we do the things that are in our power. Build up our infrastructure. Build up our education.

You know, too often now you fly from Shanghai to LAX, and you fly from Zurich to JFK, it's like flying from the Jetsons to the Flintstones. You know? You feel like you're flying from the future into the past. And that's what worries me.

I'm really focused on what we do. And if we get our house in order, things will work out with China and their fate will be determined by them. But we've got to focus on us.

MORGAN: We have another break, Tom. We'll come back and talk to you about global warming. Does it exist? Is the education system on its knees? And who is going to be the Republican nominee, do you think, as things stand?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) GOV. RICK PERRY (R), PRESIDENTIAL CANDIDATE: I do believe that the issue of global warming has been politicized. I think there are a substantial number of scientists who have manipulated data so that they will have dollars rolling in to their projects.

(END OF VIDEO CLIP)

MORGAN: Texas governor and Republican presidential hopeful Rick Perry with something of a conspiracy theory on global warming. And back with me now is Tom Friedman.

Tom, what do you hear the guy who is streets ahead at the moment in the Republican nomination race just dismissing global warming as politicized nonsense. What do you think of that?

FRIEDMAN: You know what's so funny about this, Piers, I mean, when you think of all these oil companies giving millions and millions of dollars in donations to buy basically every politician to deny climate change, and then you have the politicians complaining about some poor tenured scientist who probably is struggling filling out 100 forms to maybe get a $25,000 grant over 10 years from the National Science Foundation.

Do you know how much money an MIT scientist could make from oil companies if he came out tomorrow and said, climate change doesn't exist? And by the way, if there were this conspiracy, do you think by now somebody would have come clean? Somebody would have reported that all the world's scientists are in a conspiracy?

And what's really doubly absurd about it, Rick Perry's state is on fire. OK? It's now experiencing the worst -- tragically the worst wildfires in its history. Which fits in exactly with the predictions of climate change that the hots will get hotter, the droughts will get longer, the wets will get wetter, you get these extremes in temperature.

It's actually happening under his nose, climate change. And he's out denying it.

You know I wrote a book before this, Piers, called "Hot, Flat and Crowded," about this climate issue. And when I wrote it, I always -- you know, when I speak to crowds that don't believe in it, they say, you don't believe in hot, you don't believe in climate change? I take -- anyone got an eraser? Take off that. You don't believe in climate change, fine. That's between you and your beach house.

But you better believe in flat and crowded. That is, you better believe that we've got 7 billion people on the planet, and we're going to 9.5 billion by 2050. And more of them, flat, can see how we live, aspire to how we live, and live like we live in American-size homes, American-size cars, and eat an American-sized Big Macs.

Now what do you think is going to happen to energy production when we go from seven billion people to nine billion people, and more of them can live like us. Whether climate change exists or doesn't exist -- and of course it does -- you're still going to have a huge demand for clean energy. So like, what is this nonsense?

MORGAN: Yes, when you see, as I say, Rick Perry how espouse that nonsense as you put it, and he's way ahead in these polls to be Republican nominee, could you actually imagine a scenario where either he or one of the other Tea Party candidates is chosen as the person to take on Barack Obama in the next election?

FRIEDMAN: I'm sure it's possible. But you know it's scary to me because, you know, as an Italian proverb we quote in our book, "Arithmetic is not an opinion."

MORGAN: Barack Obama has made a big deal since he came into the presidency about education. Most people's view -- I mean I read one statistic here which I found pretty alarming, I mean it's from your book.

One in 4 applicants to the U.S. army fails the entrance exam because they can't get through the three R's, reading, writing, arithmetic. I mean that's pretty sobering to read that kind of statistic.

What is the truth about the current state of America's education system?

FRIEDMAN: You know what we try to do in this book, Piers, is really start the discussion where we think it should start, which is what world are we living in? And that's not where the discussion starts in this country. It often starts between the two political parties of how I can take this bar and stick it into the wheel of the other party.

What world are we living in? We're living in a world that's not just connected anymore, it's hyperconnected. What that means for employers, Piers, is I can now have access to more machines, more automation, more software, more robots. And not only just cheap labor, but cheap genius anywhere in the world.

And this is posing a huge challenge to our workers. We have a chapter in the book called "Average is Over." Everyone needs to think, first of all, of themselves when it comes to education like an immigrant. How does an immigrant think? He thinks, nothing is owed me. I don't have a place waiting for me at Harvard. I better understand the world I'm living in and boy, I better work harder than the next guy because I've got nothing else going for me.

You think like an immigrant. Tell your kids that.

Secondly, think like an artisan. How does the artisan think? This is an idea of Larry Katz at Harvard. Artisans were the people before mass production in the Middle Ages. They made every individual saddle. They made every individual shoe.

They were so proud of what they did, Piers, they carved their initials into it. When you are doing your job today, think of what you're doing, whether you're so proud of how you're doing your job today, you cover your initials in it. Everyone's got to bring their extra. Because average is officially over.

MORGAN: Finally, give me a one-word answer. Does Barack Obama have it in him to beat his chest with this jobs speech, re-energize America, galvanize the people, and maybe carve the initials "B.O." into the White House wall in a few months' time, yes or no?

FRIEDMAN: Yes. He didn't get here by accident. I got to believe yes.

MORGAN: Tom Friedman, thank you very much indeed.

FRIEDMAN: Pleasure, Piers. Thank you.

MORGAN: Coming up, Rudy Giuliani on President Obama, whether America is safer since 9/11.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER MAYOR OF NEW YORK CITY: This election will get determined, like most re-elections of presidents, based on our economy. Doesn't matter if somebody's right wing, middle wing, or no wing, they're going to beat him, because the American people will say, let's give something else a chance. This isn't working.

(END VIDEO CLIP)

MORGAN: That was Rudy Giuliani speaking to the National Press Club yesterday. And he joins me now. Rudy, how are you?

GIULIANI: How are you, Piers?

MORGAN: I'm very good. You remain and continue to be my most visited guest on the show. I know that's something clearly you're very proud of. That's why you keep coming back.

Let's talk jobs. You clearly were implying yesterday that there may be one new name added to the jobless figures come next November, that of one Barack Obama. How important do you think this speech is tomorrow, in terms of whether he will or will not be re-elected?

GIULIANI: I think it's really important. I think you can always say, it's the last chance. But that's not true. There's a long way to go. I think it's really important for him to lay out a program that's realistic, that actually can pass, that people believe in, and that moves away from some of the ways in which they've been banging their heads together in the past.

He's got to do -- tomorrow, I believe he has to do a Bill Clinton. He has to recognize the reality that he's got a Republican House of Representatives, and he's going to have to meet them maybe even more than halfway, the way Bill Clinton did with the Newt Gingrich Congress.

And that's how he got himself re-elected. If he fails to do that, and he wants to stick to his liberal talking points, I think he's going to be doomed.

MORGAN: Here's the problem, really. However good this speech is, and however dramatic his plans are, given the incredibly hostile partisan nature of what's been going on in Washington the past few months, there's not a cat in hell's chance of any Republicans standing up to praise or laud him.

You're all going to queue up to say the whole thing is a complete farce, total failure, and he should be gone by next Christmas.

GIULIANI: It depends on what he says.

MORGAN: It doesn't, though.

GIULIANI: It depends on what he says. If he says, I'm going to cut government spending by a real one or two percent this year, I'd be the first one to applaud him. If he could show some real discipline over his addiction to spending, I would be the first one to say yes, we should do that.

If he takes the corporate tax and cuts it to something like 15 percent, if he does something like says we could repatriate money, American corporations can bring money back to the United States -- they won't per bear any penalty -- I'd say that's a really smart thing to do.

If he were to take the capital gains tax and do away with it, I would stand up and applaud and say, boy, that's going really to reignite Wall Street.

MORGAN: These are all --

(COMMERCIAL BREAK)

MORGAN: Rudy, really what you're reciting there is a list of things Republicans would love to do. But you're not in office. Now what if he says, for example, that he's going to take Warren Buffett's advice and he's going to heavily increase taxation on the super-rich in America, which is I believe what may be in the speech. And he's also going to cut out a lot of corporate loopholes so they end up paying more tax?

What would you say to that, given that Warren Buffett, one of the richest men in the country, has advocated it?

GIULIANI: It's easy for the richest man in the country to advocate that. It's all the rest of the people that have to pay it that are going to have a really hard time with that and they're not going to hire more people.

The real problem with that would be it would say to me that Barack Obama has demonstrated that he's still addicted to spending, and he wants more money to spend. And he's going to take it from the most convenient people to take it from, the rich.

But the problem that this country has, the problem that Europe has, that it has to come under control, is spending addiction. The reason people don't invest in America is not because we're not taxing the rich. The reason people don't invest in America is because we don't have a plan that makes it look like our economy is going to grow, because the government is taking too much of the pie.

The government is up to 23, 24 percent of our GDP. It should be more at 18 or 19 percent of our GDP. These are things that President Obama, with his very left-wing approach to the economy, doesn't understand. And he's ruined us. And the proof is in the pudding. He's put these policies into effect. And these policies have been a disaster.

MORGAN: There will be many people listening to this that say, hang on a second, you talk about ruining the economy. It was, of course, your party which effectively brought the country's economy to its knees, wasn't it? You can't absolve yourselves of responsibility --

GIULIANI: Of course not. The policies of the Republican Congress, got them knocked out of office, were terrible. They spent too much money. The problem with President Obama is instead of correcting what President Bush and the Republican Congress was doing, which was spending too much money, he's made them look like amateurs.

He has incurred more debt as president than all the American presidents combined. He's taken whatever the Republicans did, in terms of their mistakes in spending money, and made them look like they really didn't know how to spend money. He's been doing it at rates that set records.

So Obama has taken -- inherited a problem, I agree with that. Gosh, when I was mayor, I inherited a problem. The question is not that he inherited a problem. That's why we elected him, because we had a problem.

He's made the problem substantially and quantitatively worse than it was, and qualitatively worse than it was than before he came into office. Unemployment is worse now. Our debt is extremely higher now. Confidence in the American economy is much lower than it was.

And 70 percent of Americans believe that America is worse off now than it was from the day he started off in office. Yes, he's inherited a problem. That's why he got elected. But all he's been talking about is how this problem is so big that he inherited. The real question is, what did he do with the problem. And he's made the problem much worse.

MORGAN: Let's move, Rudy, to the Republican nomination battle. At the moment, Rick Perry, who I know you're a supporter of, is storming ahead. You've been in that position of being a front-runner early on. Is it a curse when this happens to any candidate, do you think?

GIULIANI: Well, you know, over the last three or four days, I've seen many people put up little signs and the charts showing that at this point, four years ago, I was ahead and Hillary Clinton was ahead. Of course, neither one of us got nominated.

So yes, being a front-runner can be a curse because you get picked on more. You get pushed more. Everybody attacks you. But it doesn't have to be. President Bush got nominated. He was the front- runner basically from the beginning. I think it's a question of how Rick performs in these debates, and how good a job he does.

Are his programs realistic? Is he going to talk about the things that really matter? From a Republican point of view, somebody's got to talk about reducing entitlement spending. I know that's very dangerous. And people get really upset about it.

But you cannot straighten out the economy of this country without getting control of health care spending. If you don't get control of the out of control, 10, 12, 15 percent increases in health care spending, there's nothing you're going to be able to do about the economy of this country.

That was missing from Mitt Romney's economic plan. And it was a massive hole in his economic plan.

MORGAN: Rudy, here's the question for you, I guess, which is an obvious one. Many people believe that despite all the media hype around the Tea Party candidates, in the end, most Republicans will view them as slightly too extreme to put into battle with Obama for the next election campaign. And therefore, the party will steer naturally to a more moderate course for its candidate.

Now, as you say, Mitt Romney carries with him some baggage. We've seen Jon Huntsman's campaign not really getting going yet. Many people say, what about Rudy Giuliani? The whole events -- and we're going to come to this after the break -- of 9/11 and the anniversary, reminding people that under a great crisis that this country faced, you showed great leadership. Have you 100% ruled out --

GIULIANI: No.

MORGAN: You won't decide yet. But have you ruled it out?

GIULIANI: I haven't ruled it out. I do think, in my case, the chance of getting nominated is really the hard thing to assess, because although on economic issues and national security issues, I'm about as conservative as anybody in the Republican party, on social issues, I'm a lot more moderate.

And I'm not somebody who's going to change all my positions just to get nominated or just to be president. I can't do it. So I think you'd be an awful president if you went against the things you really believe in just in order to get nominated.

MORGAN: Paint for me -- Rudy, paint for me the picture in which you could be tempted to run.

GIULIANI: If I thought that we couldn't beat Obama with the candidates that we had. I'm going to listen to the debates. We're going to have two or three over the next couple of weeks. I'm going to listen to those and come to my own conclusion about who's the best candidate. Can somebody beat him?

If I think we can't, if people are refusing to take up some of the challenges that are out there, which include really dealing with spending -- because if the next president doesn't have the courage to deal with entitlement spending along with everything else, and particularly health care -- because that's really the key -- then we're not straightening out the problems in our economy.

And somebody's got to have the courage to step up and talk about that. That person would be more likely than not to get my support.

MORGAN: And if you were to run, do you think you could beat Barack Obama?

GIULIANI: Who knows? Barack Obama could be very different a year from now. He could be much more popular. He could be much more unpopular. It could go either direction. If Barack Obama remained where he roughly is now, sure, I think I could beat him.

But I think three or four Republicans could beat him right now, given how weak he is and how his approval numbers have pretty much dipped below 40 percent. Worse than that for him, people are losing confidence in him as someone who can guide our economy.

Sixty, 70 percent of the American people think we're headed in the wrong direction.

MORGAN: Going to take a short break, Rudy. When we come back, I want to talk to you about the tenth anniversary of 9/11, which is coming up, whether you think America is safer today than it was ten years ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mayor, what's the situation right now?

GIULIANI: The situation is that two airplanes have attacked apparently -- what -- all right, well then let's go -- let's go north then.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GIULIANI: Today is obviously one of the most difficult days in the history of the city and the country. The tragedy that we're all undergoing right now is something that we've had nightmares about but probably thought wouldn't happen.

(END VIDEO CLIP)

MORGAN: That's Rudy Giuliani on 9/11, the day he says was the worst of his life and the worst for the city of New York. Rudy, obviously a very emotional time for you, I would imagine, this week, leading up to the tenth anniversary, and for almost everybody connected with 9/11. What are your thoughts as we head towards the day?

GIULIANI: Well, it is very emotional. I don't know what all my feelings are going to be. They're very complicated, sometimes very angry, very sad, sometimes very uplifted by all the heroism that took place that day.

But I think this country has gotten stronger as a result of it. I think that we've learned that we can take the worst attack that we've ever had, and we mourn, and we have a hole in our hearts that will always be there. But we got through it.

President Obama said something about a year and a half ago that I really agree with. He said that if America were attacked again, we'd be able to handle it, something like that. And some people criticized him and said that was kind of an inappropriate statement or -- it was absolutely the right statement.

We've proved that we can handle it. And resiliency is an important part of the defense against terrorism. Because if they think they can't destroy you, can't destroy your spirit, then the chances of another attack diminish somewhat.

So I think that we're stronger than we were before. I think we're safer than we were before. But we're sure not out of this yet. We can't let our guard down.

MORGAN: I remember coming to New York about three weeks after 9/11 and getting a helicopter around near Ground Zero and just being like everybody else, appalled, devastated, astonished, all the emotions that everyone went through when they saw it.

What I'm surprised about, and bordering on sort of angry about for the people of America, is there's still no replacement there. There's no great new building, no great new memorial has gone up. And yet wouldn't it have sent absolutely the right message to these terrorists if, within two or three years, there had been?

Here we are a decade later, there's still this gaping hole. I find it extraordinary.

GIULIANI: Sure, it would have been better if we could have gotten it up, you know, in three years, four years, five years, six years. I never expected we would, though. I remembered what happened in Oklahoma City and all the confusion about how the memorial should be. Then finally they got a beautiful one.

If you had asked me -- and a few people did -- how long do you think this is going to take, when I was leaving office in 2001, I would have said maybe 10, 12, 15 years. Too many emotions attached to it. Too many different views, including my own, about what should be there.

So this was a very hard thing to keep on a schedule because of all the passion about it.

MORGAN: Where will you be, Rudy, on the tenth anniversary?

GIULIANI: I'll be there. I mean, I'll be there for the memorial service that I've been at now for nine years, where we read all the names, and several people do readings from great works of literature.

I'll do one. And then that night, I'll have dinner with all the people that I was with the day of September 11. I mean, we were trapped in a building, got out together, and get together every evening on the 11th, I think to reminisce and to talk about it and to remember how fortunate we were to get through and how difficult it is going to be for so many of us, because we've lost people that we love.

So we talk about them. And it kind of helps us. I very much believe that you're much better off if you talk about these things than if you keep them inside. And I mean, I do it all the time. But on the night of September 11th, we spend a lot of time talking about what happened.

MORGAN: Well, it will be a very moving occasion, Rudy. But I think you're right. I think it's an opportunity as well for America to reassess, regroup, move on. America's going through a tough time now. But, as you saw in New York after that event on 9/11, the power of Americans to recover from these things is pretty formidable and incredibly impressive. And I think that's what's required now.

GIULIANI: Yes. I mean, we should remember how united we were after September 11th. And we should kind of maybe take some of that and have it move over into having to deal with our economic problems and some of our other problems and try to find a way to meet each other in the middle. And I have very strong views, as you know. I have expressed them on your show many times. But I have always been more than willing to reach a really good bargain where I have to give up a little of mine to get a little bit of yours, and that is the way you govern in this country. That's the way I governed in New York City, in a city that was 5:1 Democratic, and got through very conservative programs. But I had to give up certain things in order to do that. And we got to have that kind of realism if we want this country to really work.

MORGAN: Yes, Rudy, as always, it's been a pleasure. Thank you very much.

GIULIANI: Thank you, Piers.

MORGAN: Coming up, my preview of my exclusive prime-time interview with Amy Winehouse's father Mitch, and a surprising fact about Amy.

(COMMERCIAL BREAK)

MORGAN: Tomorrow night, you can see President Obama's address to a joint session of Congress live at 7:00 eastern. I'll talk to one of the president's advisors and top personal finance gurus about what the plan means for you.

Coming next week, my primetime exclusive with Amy Winehouse's father. It's an emotional and revealing hour with Mitch Winehouse. Here's a preview.

(BEGIN VIDEO CLIP)

MITCH WINEHOUSE, FATHER OF AMY WINEHOUSE: She loved children. And one of her -- one of her greatest wishes was to have children of her own. And that's not to be.

(END VIDEO CLIP)

MORGAN: That's Mitch Winehouse for the hour next Tuesday. That's all for us tonight. "AC 360" starts right now.