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Chinese Rising Political Star Involved in Scandal; Interview with Husain Haqqani; Interview with Brent Scowcroft

Aired April 29, 2012 - 10:00   ET


FAREED ZAKARIA, CNN 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 terrific show, we'll take you around the world and back again.

We'll start in China with the stunning scandal over the rising political star, Bo Xilai. This is a story filled with allegations of murder and spying and corruption and more. It has Beijing on the defensive. I will talk to The New Yorker's Beijing correspondent, Evan Osnos, about what it all means.

Then, Pakistan which had its own mini-scandal a year ago leading to the ouster of its famous ambassador to Washington. We have the first, exclusive interview with Ambassador Husain Haqqani since then. He'll tell us what happened to him and what's happening in Pakistan.

Also, why in the world has immigration from Mexico to the United States stopped in its tracks? We'll take a look.

Next up, the American elder statesman, Brent Scowcroft, on Syria, Iran, Middle East peace and how he feels today about the Republican Party, which he served for decades.

Finally, do you procrastinate? Do you over-indulge? Do you waste money? What to do about your bad habits and how transforming them can transform you, your company, your country.

But, first, here's my take. After months of meandering, it seems that President Obama's re-election campaign has settled on a theme. The problem is it's the wrong one.

The Buffett Rule tax on millionaires has become Obama's bumper sticker. The proposal is reasonable, but it does not deserve the attention Obama is showering on it.

It raises a trivial sum of money, $47 billion over the next ten years during which period the federal government will spend $45 trillion. It adds one more layer to a tax code that is already the most complex and corrupt in the industrialized world.

The focus on the Buffett Rule is also bad politics in the long run for Obama. While polls might momentarily show that it works, Americans are generally aspirational, not envious. Over the years voters tend to support a government that focuses on creating opportunity rather than one that tries to reduce inequality.

Bill Clinton and Tony Blair's great feat was to position themselves as pro-market, pro-growth, pro-opportunity progressives. Obama should not fritter away that asset.

Ironically, Obama has been pivoting at the very moment that events in the real world are providing him with the perfect campaign issue. We are four years into the financial crisis. In the United States, the government acted speedily and massively to stimulate the economy using monetary and fiscal measures.

In Europe, by contrast, governments quickly turned toward austerity programs, cutting spending across the board to reduce budget deficits. Well, the results are in: The U.S. economy is expected to grow 2 to 3 percent this year.

The euro zone is expected to contract, to shrink, by 0.3 percent this year. Spain and Britain have officially entered a double-dip recession, the first time major economies have done so in 40 years. IMF projections show that even Germany's average growth rate over the next five years will be only 40 percent of America's.

President Obama started the year speaking about "an economy built to last." He should return to this theme and frame this campaign as a choice between public investments on the one hand versus budget cuts on the other. He has substance behind his rhetoric.

Obama has proposed several important investment initiatives: a $476 billion infrastructure plan; a 5 percent hike in research and development spending; a job-training program to help dislocated workers; incentives for manufacturing; funds to expand the pool of college graduates, also to increase science and engineering students.

So, he should ask Americans to choose between these investments to spur long run growth versus massive budget cuts. In the midst of the economic crisis, Warren Buffet said his strategy was to invest in America. That's the Buffett Rule Obama should follow.

Let's get started.

This is a year of wholesale change in China. Most of the country's all powerful standing committee will be replaced, but these are all the planned changes. What Beijing did not account for in 2012 was an all out scandal.

Until a few months ago, Bo Xilai was a name known to few Westerners, but, in China, he was a princeling and the powerful head of the Communist Party in Chongqing, one of China's main cities.

His campaign against organized crime had made him a champion of the new left, a throwback to the days of Mao in some ways. And, then, all of the sudden this powerful figure had a stunning fall. Every day, this fall has been chronicled on newspaper front pages around the world.

It turns out he was corrupt. His wife had been detained in connection with the murder of a British businessman. And, now, he's said to have been wire-tapping the most powerful man in China, the Chinese President Hu Jintao.

Bo Xilai's fall reveals not just one man's story, but the inner workings of China which we rarely see.

I am joined now by a journalist who follows these inner workings very closely. Evan Osnos is The New Yorker's China correspondent, but he is here this week in New York. Welcome.


ZAKARIA: So this sounds like something out of a murder mystery. I mean how do you think most Chinese people are reacting to this news that they're getting that this guy who was really one of the most admired people in China, from what we could tell, has suddenly been now revealed to be a corrupt hack or is being kind of painted as a corrupt hack by officials?

OSNOS: This story is unprecedented. I mean we're talking about the world's second largest economy, the most powerful men in charge. Bo Xilai was going to be perhaps one of the nine people running the country this fall.

And, now, he has been -- he has fallen from grace in the course of just a few weeks. And this has really left people's head spinning because, in the Chinese press, they're being told every day that this man was a criminal. This man who had been celebrated just a couple of months ago.

And this is very hard for the party to explain to people. How is it that a man who, evidently, is now a criminal, who's accused of wire-tapping his own peers, could have, in fact, gotten so high and been celebrated so recently. This is a problem that's hard to reconcile for the leadership.

ZAKARIA: And what is the larger point here because, in the Chinese press, he's being portrayed as a criminal and kind of a bad apple. But, obviously, this is also about a power struggle.

OSNOS: Yes, this is the part that's especially awkward for the leadership because what they've got is a case in which the details themselves are so spectacular. Let's think about it.

We've got a police chief fleeing to the U.S. Consulate in Chengdu seeking protection from the Americans saying that his boss's wife has murdered an English businessman, poisoned him in a hotel.

We've then got rumors coming up on the Internet and then eventually being confirmed by Western reporters that show that, in fact, the Bo Xilai family had assembled an enormous fortune. We don't know how large, but perhaps into the millions or the hundreds of millions of dollars that they were trying to move out of the country.

And the party has tried to say very carefully that this is a criminal matter, regard this as one bad apple. But what we now know, in fact, is that this is just the outward expression of what is a deep and intense political contest going on at the highest ranks of the Communist Party.

ZAKARIA: But what we now have, from "The New York Times", in this extraordinary piece of reporting, that, I mean, if it doesn't win the Pulitzer Prize, I will be stunned, is that Bo Xilai was actually wire-tapping senior Chinese officials in Beijing including the President of China.

I mean this tells us of a level of intrigue up there that -- I mean that liberally looks Byzantine.

OSNOS: Yes, this moves this from a sort of Agatha Christie case to a Watergate-style case because what you've now got is one part of the government using the full force and tools and apparatus of the state on another part of a government.

And that, to a Chinese reader and a Chinese listener, is alarming because this goes back to the very origins of the factional, very bitter fights that shaped the Communist Party over the 60s and 70s.

In recent years, the Communist Party has succeeded in projecting the idea of unity, discipline, competence, professionalism; that's what it stood for three, four years ago, growth of 8, 10 percent a year.

It's now begun to look as chaotic, frankly, as it did in the late 1980s. And to a Chinese citizen, that's distressing.

And I think that's a problem for the party because the party has sold itself to people over the last few years by saying we know Communism is no longer a part of your life, we know that it no longer means anything, but what we can do is we can deliver competence and stability and this begins to pull that into doubt.

ZAKARIA: And if you look at the levels of corruption that seem to, again, be surrounding this -- you pointed out to me off-camera a fascinating report from the Chinese Central Bank that talked about the numbers. Tell that.

OSNOS: Last year, there was a report that went up from the Chinese Central Bank, just for a few hours, on the Internet, before it was taken down which suggests that they never meant to release it.

And what is said was that there was $180 billion that had been -- $180 billion with a "b" U.S. dollars that had gone from Chinese Treasury, from, essentially, public money that had been taken overseas by corrupt officials.

When that happened at the time, frankly, a lot of us thought this can't be right. The decimal place is off, something's off.

What we're now starting to think is that, in fact, it's plausible, that if there are enough Bo Xilais in the system, enough people who have assembled these economic empires for themselves that quantity of money begins to be plausible.

And what that means is a certain level of chaos beneath the surface of -- you know, what we see on the surface is the ritual of everybody banding together, the system doing well.

These are technocrats and what we're starting to see is that there is, in fact, a very disorderly layer to the Chinese political system.

ZAKARIA: So the leadership is going to try to present this as one very bad, corrupt, power-hungry guy and it may well be, from their point-of-view, that they dodged a bullet here.

Bo Xilai was clearly power-hungry. He clearly was going to be a very difficult and unruly member of that nine member standing committee. He seems to have been willing to use power in ways that certainly the Chinese have not for 20 years, you know, wire-tapping his superiors.

And they'll try to shut it down and say we got rid of the bad egg. Will it work?

OSNOS: I think, for the moment, they are succeeding in containing the damage in the sense that this has not started a campaign of purges.

You know the signal to us that this is going to become a larger political problem and it may, in fact, throw off the transition of leadership this fall is if we begin to see high-level purges of either side of these ideological debates.

So, for instance, if other members of the Politburo get into the crosshairs, if they start to go down, then we really need to be concerned about whether the political system, at its highest level, is stable.

For the moment, they have succeeded in saying that Bo Xilai was a problem. We've rooted him out. He's gone and let's move on and go back to business.

I'm reasonably confident that they -- they certainly will be making every effort to do it. And, remember, this is a dictatorship that does not have a dictator. And that is an unusual thing.

It's something we have not really encountered before and, as a result, it's hard to predict what sort of political animal this is and how it will shape.

ZAKARIA: A dictatorship that doesn't have a dictator and where the leaders transition out every ten years.

OSNOS: A dictatorship with term limits is something we've never encountered before. So, in a lot of ways, we're in uncharted ground right now. And the difference is -- you know the last time we had a political crisis like this in China was 1989. You have to remember that that was a time when China's economy was smaller than Spain's. There was no Internet so what happened in Beijing was interpreted and broadcast to the public around China in whatever way the party wanted it to.

And, at the time, it was still a crisis. After all, 1989 was Tiananmen Square. Right now, China is stable. The streets are quiet. But this is a hugely volatile moment because you've got the Internet, which has a way of interpreting things in all kinds of unpredictable ways.

China, so far, is still growing fast. The economy is still growing. People are reasonably satisfied. But it cannot afford, frankly, to have political disarray because it doesn't have that kind of cushion of protection.

ZAKARIA: Evan Osnos, thank you very much. It will be fascinating to see what you write about on all this for "The New Yorker".

Up next, a scandal that's shaken the core of America's relations with Pakistan. I'm going to speak to the man at the center of it, the man who lost his job as Pakistan's Ambassador to Washington, the first interview exclusive to us.


HUSAIN HAQQANI, FORMER PAKISTANI AMBASSADOR TO THE UNITED STATES: Fareed, it's such a liberating feeling not to be the ambassador right now so I can actually say what I feel.



ZAKARIA: Next week will mark the one year anniversary of the death of Osama bin Laden. You might say my next guest was collateral damage. Husain Haqqani was, until last November, Pakistan's Ambassador to the United States. He was known for deftly navigating the corridors of American power.

But his tenure came to an end when a Pakistani-American businessman made a stunning public accusation. Mansoor Ijaz, a past guest on GPS, claimed that in the days after the Navy Seal raid on bin Laden's compound, Haqqani asked Ijaz to pass a memo to then Chairman of the Joints Chief of Staff, Michael Mullen.

Ijaz said this memo asked for American help to stop a potential military coup in Pakistan. "Memogate" created a huge scandal in Pakistan and angered the countries powerful military. Haqqani was summoned back to Islamabad where he resigned his post, was denounced as a traitor and has lived in fear for his life.

He says he still gets death threats daily. He is back now in Washington and he joined me there to talk about the larger issues arising from his case. HAQQANI: The whole thing has been, basically, an example of how a mountain can be created out of a molehill, but, primarily, how the divisions in Pakistan are very strong between those, like myself, who have a vision of a pluralist Pakistan that is part of the modern world and those who think that Pakistan should be a ideological state that should be xenophobic.

ZAKARIA: A lot of people regarded the speed and scale of the kind of attack on you as being an example of the military's power in Pakistan where they took a leaking of a memo, even if it existed, and managed to have you arrested.

You were immediately charged. Your life seemed to be under threat. Does the military have that kind of capacity?

HAQQANI: First, let me say that I was not formally arrested. Yes, my movement was restricted, but I was never arrested. I was never charged. There is no legal formal charge against me.

What happened was -- it's not just the military, by the way. It's unfair to just blame the military. Pakistani society is extremely polarized. And that polarization includes judges, journalists, generals, politicians or people who have adopted a worldview. And I happen to have the different worldview.

And the President of Pakistan and the elected leadership of Pakistan embraces that worldview but did not have the strength at that time to assert the worldview.

And, then, there was this whole media trial which kept on saying, "This is treason, this is treason. You asked the Americans to intervene in Pakistan's domestic politics." (A) There was no threat of a coup after Osama bin Laden being found in Pakistan in May. In fact, the military was very embarrassed by that fact that he was found there.

So there was no coup that we needed to avert. The so-called claim that I actually sent or asked somebody to send a memo to Admiral Mullen has already been set right by General Jones, who was the intermediary. He says, "Yes, Mr. Ijaz sent me an email and I forwarded it to Admiral Mullen. Mullen didn't take it seriously" and Jones says, "but I was never told it was from Husain Haqqani or from anybody else."

And the individual concerned, who was at the heart of all this, he has changed his story several time and he has a long history.

ZAKARIA: When we look at U.S.-Pakistani relations, it does not seem that things are on the right track. It feels as if there is deep distrust between the Pakistani military and the U.S. military. There is deep distrust at the level of the civilian government in the sense that there's a sense that they cannot actually govern, they don't have any power.

And if you look at something like the drone attacks, for example the number of drone attacks have dropped dramatically, in part because of very strong objections from the Pakistani side, retaliation of various kinds.

Where is this relationship going?

HAQQANI: Fareed, let's be clear. The mistrust is not just between American institutions and Pakistani institutions or American government and Pakistani government. The mistrust is between the Pakistani people and the American people.

Pakistani people have a narrative in which the United States has repeatedly betrayed Pakistan, have left it in a lurch. It came to fight the Soviets in Afghanistan and then left in a hurry without caring about the fallout for Pakistan, it promised assistance and withdrew it.

The American narrative is that Pakistani's cannot be trusted and that Pakistan pursues a nuclear weapons program, which they promised at one time they wouldn't do, that Pakistan is involved in supporting militants and terrorists.

ZAKARIA: And is that fair? I mean, in other words, from what you can see -- from what you saw, isn't it true that the Pakistani military wants to retain ties with the Taliban because it wants to have influence in a post-American Afghanistan?

HAQQANI: Fareed, it's such a liberating feeling not to be the ambassador right now so I can actually say what I feel, but, even then, I will say something that I said on your show once before.

Pakistan does have legitimate security concerns in Afghanistan. It would not be appropriate for Pakistan to not respond to the reality that Afghanistan should not be used as a staging ground any kind of military or covert operations against Pakistan.

The U.S. would not have accepted a Soviet base in Mexico during the cold war. That said, I think that there is a paranoid mindset in Pakistan that does not allow rational discourse.

And if the matter is discussed in a rational manner in which the paranoia is set aside -- and, by the way, the paranoia runs wild in Pakistan. I mean I don't know how much you follow the Pakistani media, but in everything there's a conspiracy theory.

ZAKARIA: Directed by the CIA.

HAQQANI: Directed by the CIA, directed by the American government, there's an Indo-Zionist conspiracy to take over the world, a term that nobody in America follows, you know.

I know there are many people in America who are Zionists and I know there are many people of Indian origin, but I've never heard of the Indo-Zionist sort of lobby here.

But those are things that are fed there and you know that even in most free media environment, people believe what they're told and then their opinions are shaped like that. So in case of Afghanistan also, Pakistan and the United States can come to terms with an arrangement that can work for both. We are not there yet. We are not there yet.

And I think to get there it's important that those groups that pose a threat to American security, they need to be dealt with by Pakistan. At the same time --

ZAKARIA: That means going into North Waziristan and taking on the Haqqani faction and other groups like it?

HAQQANI: And dealing with all of those factions that post a security threat to the United States. Pakistan will eventually have to do that. At the same time --

ZAKARIA: Do you think it will? It's been ten years that we've been asking.

HAQQANI: Well, I understand your frustration. If it hasn't happened in ten years, how will it happen in the future? But, at the same time, the Americans need to push harder and make the point that we are willing to embrace and understand your legitimate security concern.

ZAKARIA: Husain Haqqani, pleasure to have you in the United States, glad to see that are safe and we look forward to talking to you again.

HAQQANI: Thank you very much.

ZAKARIA: That was Husain Haqqani talking to me in Washington.

Up next, "What in the World?" We've come to believe that millions upon millions of Mexicans are entering the U.S. every year. Well the new data shows that net migration is actually zero. How, why, up next.


ZAKARIA: Now, for our "What in the World" segment. This past week the Supreme Court deliberated over a controversial Arizona Immigration Rule. It comes amidst a climate of hostility. Just look at the Republican primaries.


MITT ROMNEY, GOP PRESIDENTIAL CANDATE: And that means completing construction of a high-tech fence.

REP. MICHELLE BACHMANN (R), MINNESOTA: I will build a double- walled fence.

HERMAN CAIN, AUTHOR, BUSINESS EXECUTIVE, RADIO HOST, SYNDICATED COLUMNIST, TEA PARTY ACTIVIST, GEORGIA: Gonna have a fence, it's going to be 20 feet high. It's going to have barbed wire on the top.


ZAKARIA: The fence in question guards a third of America's 2,000 mile long border with Mexico. Supporters of harsher laws argue you that three out of every five illegal immigrants are from Mexico.

But just as American hostility is reaching a crescendo, the problem might be disappearing. I was struck by a Pew report I saw this seek. It says a historic pattern of migration has been reversed.

Comparing two recent five-year blocks, the report finds that not only has the number of Mexicans immigrating to the U.S. decline by 50 percent from 3 million to about 1.4 million, the number of Mexicans going the other way back home, has doubled, 700,000 Mexicans in the U.S. moved back between 1995 and 2000, 1.4 million between 2005 and 2010.

The decline in illegal immigrants is no surprise. Even President Obama has spent more on immigration enforcement than his predecessor. What is surprising, however, is the drop in net legal migration.

This has several explanations. The U.S. economy is weaker. On the other hand, Mexico's economy is doing better. It's GDP per capita now is $15,000, about a third that of America's.

Some of Mexico's competitiveness is due to NAFTA, the North American Free Trade Agreement. Because it avoids U.S. tariffs, its exports work out to be cheaper than China's. Last year, Mexico did $400 billion with the U.S. That's more than Argentina and Brazil combined.

But whatever the set of reasons behind the Pew findings, immigration is always determined by both pull and push. The need to leave a place is as crucial as the allure of a new destination.

So are we losing our allure? If that's the case, that's actually not good news. The U.S. has always benefited from being demographically dynamic. A major advantage we have over Japan, Europe, and even China is that our population will continue to expand, and it's been expanding with young people who are hard-working and full of drive and pay lots of taxes.

Look at this data. The median age in the U.S. was about 37 years in 2010. China's was lower, 34 years. But come 2050 that dynamic is reversed thanks to decades of Beijing's one child policy and American immigration. The median age here will be 40, but in China it will hit nearly 49 years. An aging country creates a deficit of workers and a surplus of retirees who spend.

Our demographic advantage holds true against a number of countries. Look at this chart. In blue, you can see the share of seniors in a number of developed countries right now in 2000. In red you'll see the percentage of seniors they are projected to have in 2050. Again, we have a smaller share than most of the developed world.

We're projected to be better off demographically than France, the United Kingdom, Korea, Spain, and, of course, Japan. This demographic advantage is entirely due to immigration.

The United States actually has a fertility rate that is not so different from European countries, so our population gains -- and these are gains in young people -- come entirely from immigration. The Pew study shows how we've clamped down on illegal immigration, but it also shows that Mexicans don't want to come here as much legally as they did before, so actually it's a mixed picture.

In trying to one-up each other by building bigger and higher fences, demonizing immigrants and hoping that they will self-deport, we seem to have forgotten that it is the spirit of acceptance and hospitality that has made America so attractive to legal immigrants for centuries. Let's hope we can stay that way.


BRENT SCOWCROFT, FORMER UNITED STATES NATIONAL SECURITY ADVISOR: The Arab spring has not yet hit the Palestinian issue. But it will.


CANDY CROWLEY, CNN HOST: I'm Candy Crowley in Washington. FAREED ZAKARIA GPS will be back in 90 seconds, but first, a check of the top stories.

One person is dead, 16 others hospitalized after a sports bar tent collapsed during a storm in St. Louis. St. Louis Cardinals baseball fans had gathered at the bar's tent to celebrate the team's victory yesterday.

A source tells CNN that Republican presidential candidate Newt Gingrich will end his White House run Wednesday. The former House speaker is expected to express his support for the presumptive Republican nominee, Mitt Romney.

There's a newly revealed account of the assassination of Robert F. Kennedy. Nina Rhodes-Hughes -- she's on the left in this picture -- was a witness to the murder and tells CNN there was a second shooter on the night that Kennedy was fatally wounded in a Los Angeles hotel in 1968.

A federal court is considering Rhodes-Hughes' story as part of a challenge to the conviction of Sirhan Sirhan, who was sentenced to life in prison as the lone killer of Kennedy.

Those are your top stories. "RELIABLE SOURCES" at the top of the hour. Now back to FAREED ZAKARIA, GPS.

ZAKARIA: It is one of my strongly held beliefs that to get wise perspectives on the present, it is unquestionably helpful to look to the past, and in that vein today I welcome Brent Scowcroft. Scowcroft was national security advisor to two presidents, Gerald Ford and the elder George Bush. Before that he served the nation for 29 years in the Air Force with a final rank of lieutenant general.

Welcome. SCOWCROFT: Thank you.

ZAKARIA: I want to talk to you about all kinds of things, but let's start with perhaps the most urgent issue that would be on your plate if you were national security advisor right now: what to do about Syria. This is a situation in which the United States has publicly said it wants to see the end of the Assad regime. Assad is being helped by Iran. He is slaughtering his own people. What would you do?

SCOWCROFT: It's not by accident that Syria has never really known a democracy. It's a very complicated country -- ethnically, religiously, culturally. And so my sense is if Assad left tomorrow, the Syrian problems would not end.

It is very difficult to know what to do. I think sanctions are, in the long run, probably the most useful thing. And Assad can go until one of two things happens, either his military seizes to support him or splits, and the business community deserts him. Neither of those has fundamentally happened yet.

ZAKARIA: You are a military man. Do you think that no-fly zones, arming the rebels, any of these measures that are clearly meant to be military measures, short of war, could they work?

SCOWCROFT: It's not clear to me what work means. They could turn what is now an insurrection kind of activity into a full civil war. But is it enough without the fracturing of the Army? The Army is a -- the Syrian Army is a complicated thing. But sort of the fracturing of that, you make violence more extreme, but solving the problem, it's not going to do it, I don't think.

ZAKARIA: So you -- you would counsel that the president to be wary of military intervention or any kind, including arming the rebels, no-fly zones?

SCOWCROFT: I think arming the rebels, no-fly zones, humanitarian help, I think would be fine, but I don't think that that kind of intervention can be decisive and I really think that in the longer run, sanctions are likely to be more heavily influential.

ZAKARIA: But let me (inaudible) that. You were saying earlier that you thought a no-fly zone, for example, could simply expand the civil war, so you would not be in favor of it.

SCOWCROFT: No. Well, well, things like that -- it would create a full civil war. It would not be enough to transform the situation, I don't think. I think we would have to have troops on the ground, either ours or Turkey's or somebody's to do that.

ZAKARIA: If you were to advise Mitt Romney, what would you say of the principle areas where you would have disagreements with the Obama administration?

SCOWCROFT: Well, I believe -- well, one of them is the peace process. I believe that we are almost on borrowed time in that region. The Arab spring has not yet hit the Palestinian issue. But it will. So I think timing is essential to move that process before we have another debacle.

ZAKARIA: But that's -- in effect, you want the United States to be more forceful and presumably press for a settlement. If anything, the Republicans nowadays are criticizing President Obama for having done what few measures did he take.


ZAKARIA: And so the Republicans are wrong.

SCOWCROFT: Well, Republicans are -- I think both sides are wrong because I think those -- the small measures that the administration took at the outset of the administration, like focusing on settlements and so on, was a mistake because I think nothing short of a comprehensive approach in which each side has to give a little here to get a little there -- and overall it's a structure that meets the needs of both sides. I think that is the solution that has not been pressed.

ZAKARIA: Are you comfortable with the Republican Party these days?

SCOWCROFT: Well, many parts of the party call me a RINO.

ZAKARIA: Republican in name only.

SCOWCROFT: Republican in name only -- I don't think I've changed my views at all.

ZAKARIA: You think the party has --

SCOWCROFT: -- that I think the party has moved.

ZAKARIA: Do you think -- are there any prospects for changing? It feels as though it's moved a lot since you were in office.

SCOWCROFT: Well, I think it has. Yes, I think there are prospects for change because the attitudes go up and down. You know, I still remember -- you wouldn't -- 1964 and Barry Goldwater, who ran a very conservative campaign, and when he was badly defeated, the Republican Party turned to Nelson Rockefeller and Ronald Reagan and other moderates.

So, you know, the -- we're continually reinventing ourselves.

ZAKARIA: Brent Scowcroft, always a pleasure to have you on.

SCOWCROFT: Nice to be with you, Fareed.

ZAKARIA: And we will be back.

CHARLES DUHIGG, AUTHOR: When you go through a major life event, your habits change, even if you're not aware of it. If you get married, the type of coffee you change -- you buy changes. If you get a divorce, the type of beer you buy changes. When you have a child, all of your shopping habits are up for grabs, even if you're not completely aware of it.


ZAKARIA: More than 40 percent of the actions people perform every day -- that you perform every day -- are not actually decisions you make, but they are the product of habits. We like to think of habits as traits that can't be changed, but it turns out that habits are malleable. And knowing how to change them has profound implications, not just at the personal level, but also for companies and governments.

My next guest has a new book that explores this theme. Charles Duhigg is the author of "The Power of Habit." He is a reporter for "The New York Times". He joins me today.

DUHIGG: Thank you so much for having me.

ZAKARIA: So tell the story of Alcoa. Paul O'Neill, who later becomes Secretary of the Treasury is CEO of Alcoa. When he first comes in, Alcoa is not doing well at all, but he focuses on worker safety.

DUHIGG: Right, exactly.


DUHIGG: And everybody expected him to focus on productivity and efficiency, but what he said was worker safety is his number one goal, and it's because he recognized that if you -- that there are these things that are called keystone habits within organizations.

And if you can change this one habit, you set off a chain reaction. And that's exactly what happened within Alcoa. By focusing on worker safety, he actually transformed the entire organization, and within two years they were at the top performer in the Dow Jones Industrial Average.

ZAKARIA: And you look at -- one of the things that goes on here is that people have more ability to change. They have more willpower than even than they think they have.

DUHIGG: That's exactly -- in the last decade our understanding of the science of habits has been completely transformed by neurological studies, and what we understand now is that every habit has these three components: a cue, a routine and a reward.

And if you diagnose these cues and these rewards, you can begin changing automatic behaviors in ways that we never really thought were possible previously.

ZAKARIA: So give me an example of what one would think of as a bad habit that you can change.

DUHIGG: So smoking is a great example, right? In the last decade smoking rates have just plummeted in the United States. And part of the reason why is because we now understand why people smoke, that there's these cues, such as the time of day that triggers the behavior. But more importantly, it's delivering a reward that nicotine actually gives you this energy.

And so now interventions go in and what they say is they say, don't just try and quit smoking. Replace it with coffee, with exercise, with something that gives you that same reward, and we've seen an incredible decrease in the number of people smoking and their ability to quit.

ZAKARIA: And when you look at a company like Starbucks, it also tries to produce certain kinds of habits when dealing with, for example, disgruntled customers.

DUHIGG: That's exactly right.

One of the interesting things about Starbucks is that they have to sell customer service along side that $4 latte. But they're dealing with a work force that's often 17 years old, high school graduates. So they have to teach them these life skills. And what they do is they design specific habits to use in corporate settings.

When an angry customer comes up, that's a cue for what they call a latte method, which is you listen and you thank them and give them a free cup of coffee, and then the reward is that basically you solve this problem. They take decision making out of the equation. They make the response automatic, and customer service productivity go up enormously.

ZAKARIA: Target tried to measure some of these issues. How did it do it?

DUHIGG: Well, Target has this really interesting project, as does most of corporate America, of intensely studying shoppers' habits. And Target actually used this to try to predict which women were pregnant by studying how their shopping habits changed. They got so good that they can essentially assign every woman who comes regularly through their doors a pregnancy prediction score and even estimate their due date within two weeks.

ZAKARIA: Why is that important to shopping?

DUHIGG: Well, what Target knows is that when you go through a major life event, your habits change, even if you're not aware of it. If you get married, the type of coffee you change -- you buy changes. If you got a divorce, the type of beer you buy changes. When you have a child, all of your shopping habits are up for grabs even if you're not completely aware of it.

Target knows that they can get the right coupon why n your hand at the right time, you'll start buying from them.

ZAKARIA: I suppose the fundamental question is can you change habits?

DUHIGG: Absolutely. Absolutely.

And that's the biggest insight that we have. And it's not just personal habits, it's habits within companies, organizational habits, habits across societies. What we've learned in the last decade, particularly from neurological studies is any habit can be changed. It doesn't matter how engrained the behavior is, it doesn't matter how old the person is, if you can identify the cue and the reward and understand what's driving the behavior from a neurological perspective, the craving, then you can change that behavior. But you have to be deliberate about it.

CEOs have to actually think about their organizational habits. They can't just kind of try and do it on the fly. And good CEOs, Jack Welch, Louis Gertsner when you talk to them, they talk about organizational habits and how important it is to get them right.

ZAKARIA: What habit have you changed?

DUHIGG: Well, I have actually lost, like, 30 pounds since I started writing this book. And I'm training for the New York City marathon now. So it's...

ZAKARIA: So attribute it to this?

DUHIGG: I do. I got to say, I mean, it sounds like I'm selling snake oil, but it's actually true. I'm an investigative reporter for "The Times." I'm not given to fashion trends, but if you understand the sense and figure out how to take apart these habits, you can actually change your life in these really important ways.

ZAKARIA: Well, best of luck on the marathon.

DUHIGG: Thank you. Thank you so much.

ZAKARIA: Thanks for joining us.

Up next, how Kazakhstan has benefited from Borat. Don't miss it.


ZAKARIA: This week former Liberian President Charles Taylor was found guilty at a war crimes tribunal at The Hague. That brings me to my question of the week, which is who was the last head of state convicted at an international war crimes tribunal? Was it, A, Paul Pot of Cambodia, B, Slobodan Milosevic of Bosnia-Herzegovina, C, Omar al-Bahir of Sudan, or D, Karl Donitz of Germany.

Stay tuned, and we'll tell you the correct answer. Go to for more of the GPS challenge and lots of insight and analysis. You can also follow us on Twitter and Facebook and remember, if you miss a show, go to iTunes, you can get the audio podcast for free or you can buy the video version. Go directly there by typing into your browser.

This week's book of the week is Paul Krugman's latest "End This Depression Now." Whether you love Krugman or hate him, you have to pay attention to him, and this is the fullest expression of his economic policy views. The big book, or the big target depending on how you feel, but either way, you have to read it. It will be in bookstores Monday.

And now for the last look. When the movie "Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan," premiered in 2006, Kazakhstan's government banned the film and threatened to sue its star. Six years later Kazakhstan's foreign minister is thanking Borat, crediting the film with a large tourism boost. He called it a great victory as the number of applications for tourist visas to Kazakhstan has grown ten fold.

Now travelers can't look to Borat as an accurate depiction of the country, so how should they prepare for a trip? Well, they could watch this 67 minute promotional film about the glorious country's history and recent achievements entitled "In the Stirups of Time." This one stars a different Brit, former British prime minister Tony Blair.

The film features carefully selected clips from an interview with Blair who applauds the nation's diversity and progress.


TONY BLAIR, FORMER BRITISH PRIME MINISTER: And I think, you know, you got to say the progress is remarkable.


ZAKARIA: It proudly celebrates Kazakhstan's recent accomplishments, political, educational, industrial, economic. Grab your passports, you are now an expert on Kazakhstan.

There were a few statistics that could not fit into the 67 minute video. Kazakhstan ranks 172nd out of 196 countries in terms of press freedoms, 120 out of 183 in terms of corruption, 137 of 167 in The Economist's 2011 democracy index. Its president won the election with over 95% of the vote.

On second thought, maybe there is a lonely planet guide out there somewhere.

The correct answer to our GPS challenge question was, d, Admiral Carl Donitz. His name is mostly lost into history, but Donitz took over as Germany's head of state after Adolf Hitler's death in 1945. One week later Germany surrendered.

For those of you who guessed President Bashir of Sudan, nice try. He was indicted by the ICC, but he has not been convicted.

Thanks for all of you being part of my program this week. I will see you next week. Stay tuned for Reliable Sources.