>> from our studios in new york city, this is charlie rose. charlie: joining me is matthew dowd from abc news. from washington, kerley -- carol lee from wall street studio. and out on from washington -- from bloomberg. i am pleased to have all of you on this program. other any consequences coming out of what happened last night ?ith donald trump al: the conventional wisdom is the donald trump did well, was shrewd, smart. racenk we have a three-way

. i think that was the case 24 hours ago, and it will be the case in a little bit less than 72 hours. dan: the debates have an impact for 12 hours, then people get back to normal and begin to make choices. turnout operations crank up. for the most part, it is still a trump-crews race. -- trump-cruz race. charlie: it is said that undecided voters wait until the last minute, obviously. 20% of caucus voters wait until the very end? i think this is an iowa election where turnout will matter.

is a huge republican turnout, 189,000, and would favor trump. that means he is bringing out people who have not voted before. a conventional turnout like a little -- might put a little edge for ted cruz. tell me about marco rubio and how he is coming on. >> the biggest winner of the debate was marco rubio. ted cruz really suffered in the debate. marco rubio has an outside chance at finishing second in ifa, behind donald trump it he does that, the race is over for ted cruz. marco rubio will finish with a strong second. then, the two-person race and rubio.umpn

if trump wins and i what, he may be unstoppable. he is forehead in new hampshire. carol-- far ahead in new hampshire. carol: new hampshire is a very different race for the there's a little flexibility for some of those who are not -- different race. there is a little flex for those .ho are not doing well in iowa they are different delegates. to win iowa and then new stillire, he could breakdown in the later states.

the battle with fox news, was that intentional? did he want to confront fox news and show he is donald trump and no one is bigger than him? anybody? dan: i think he is probably the most politically astute and media savvy person that has run for president in years. charlie: astute? matt: and media savvy. he understands politics more than anybody running a campaign. he understands media coverage and how it has changed dramatically. what donald trump has done is a eliminate the republican party as a vehicle

and fox news as a decider. if he secures the nomination, which, right now, he is favored to do, the republican party as it exists is no longer in control the process.-- of the process. charlie: i used to hear people say donald trump for president is a terrible idea. it's never going to happen. now they say, yes, it could happen, and yes, i might find myself, because of the alternatives, voting for trump. do ifart of it has to they think he is going to be the nominee, they must become comfortable with him. at this point, he is favored to win the nomination. if things change, and they do from,he voters are heard there will be twists that we did not expect. as strong ort seem

formidable as he has for the last six months, you will get a reevaluation on the part of a lot of those people are saying "i think i can be comfortable with him." some will say they don't want to mess the nominee. there are twists in this race depending on what happens the next few weeks. al: i think my pal is to quickly dismissing cruz. [laughter] i talked to a number of republicans who are anti-trump. the rationale, when you talk to them, is that he does not believe in anything. maybe he doesn't believe in the stuff he is saying, so it won't be so bad. if you take a look at

the process and how it unfolds, if donald trump wins, then goes in and wins new hampshire, let us keep in mind, no incumbent, no non-incumbent president has ever one iowa and new hampshire. neither bush didn't did mitt romney did it. as soon as february is over, it is no longer a national primary. momentum in march is going to sweep the states. matt: i think what matters is

that these processes are all moved by momentum. whoever has momentum on march 1 is going to win a majority of the states, no matter where they are. carol: talking to republicans in washington, they don't want ted cruz. feell shows that voters that they are more increasingly comfortable and see themselves putting for donald trump. be a lot ofing to twists and turns, and it remains to be seen how they will actually vote. he wins in iowa, is it his election to lose, and he will have to inflict the mortal wound on himself? appointed as matthew

-- to at to a point point. as matthew says, whoever wins, it can set up a different dynamic. can sketch out where ever the race may go. until we know what the order looks like, how strong anybody really looks compared to the others, we are guessing about what the republican electorate, down the line, is going to do. everything we have learned about american politics has been turned upside down. nexthouldn't we think the six months shouldn't be as surprising? this is a crazy quilt year. donald trump is wondering

if you will get a mortal wound that will take them down. the matter what, nothing makes him go away. what could taken down is not donald trump. charlie: he says he could shoot somebody in fifth avenue. matt: 80% of his voters say he is solid. the person who could catch fire and take him out is marco rubio, not ted cruz. he is disliked by his colleagues and everybody in the establishment. the voters want to like you. if they come to the conclusion they don't like you, i think that is the path that takes donald trump. charlie: do you guys disagree with that? if likability is so important, how come national

that's how come nixon-- so important, how come nixon was such a national success? [laughter] in iowa, we saw with john edwards in 2004, he came roaring beating john kerry. that was the rubio strategy, to hang back, to be there at the moment when people would say, "this guy might be the guy." he has run some very iowa-specific advertising, aimed at christians conservatives -- christian-conservatives. we will see to the extent to which it is extent -- we will see the extent to which it is successful. carol: in the media, we do not totally understand and have not

predicted things correctly going into this cycle. it will be fascinating, what happens in iowa, what happens in new hampshire, and will probably -- we will probably learn that we did not what was going on. charlie: what could the be?rise arel: some evangelicals breaking for trump because of the economy. the theory is that the economy t is trumping what would be traditional religious value voters. if that is the trend moving forward, that could be an interesting dynamic. charlie: let me go to the democrats and hillary clinton and bernie sanders. be another year of surprises on the democratic side?

al: i think that sanders and clinton are locked in an almost dead-even race. i think, like the republican contest, it will depend on turnout. if there is anything approaching what barack obama achieved in 240,0000 40,000 -- turnout, i would put money on burning. -- on bernie. do you think the turnout for him might just be that? dan: in making a number of calls in iowa, we are in a situation. down ton iowa comes organization versus momentum.

a week ago, clearly, you would've said bernie sanders has the momentum. you can see the size of the crowd is not diminishing. what he got in minnesota this week was astounding. 20,000 people. here that overe the last three or four days, some of the momentum may have dissipated. take it for what it is worth. people believe that in the organizational battle, hillary clinton has a somewhat better organization. a slight edge. if sanders can create the momentum and find a way to get the new people, he has a chance to win. in both campaigns, there is a sense that right now, she has a slight edge. on each side, this could go

into different directions. it could be a short process, with iowa setting it up to be short. if hillary clinton wins iowa, it is hard for bernie sanders to get oxygen. processns iowa, the will go for a longer amount of time. the national polls will close. 2 states in won a row. the fascinating thing is that we have not even mentioned it jeb bush. -- mentioned jeb bush. bernie sanders will win more primaries and caucuses then jeb bush-- than jeb bush. this race has gone nowhere close to where anybody thought it was six months ago. what surprise are you

looking for, turnout? what? carol: turnout. it matters, as everybody was just saying. it matters in terms of hillary clinton vs. bernie sanders. is bernie sanders really organized? clinton had a lot of the obama folks working for her. whether or not bernie sanders and translate his enthusiasm into something actually on the ground, it is a big question. charlie: thank you so much. stay with me. having the expenses you have had in politics, the trunk sector-- trump factor. is this that he is a different kind of campaigner? politically astute? is this a moment where the country and the personality came together?

things,l of those coupled with the fact that the establishment part of the party is completely disrupted, fractured. there are no longer really elders in charge of the process. we are at the point in the republican party where there is no longer control. this is a person who understands social media and how the press covers things. he understands it well and he does not rely on people. he relishes it. he has been more available to the press than any other candidate. more than anybody. charlie: he says "i love polls." matt: he engages with conversation with the people in the audience. , he ise large gatherings saying, "let's just talk about what is going on."

works off of notes on a piece of paper. lack of discipline could usually lead to errors, not talking about concerns of actual voters. but he has struck a chord, captivating thought in this country for a few years that he has dropped into. donald trump, for many people, represents a movement within the gop that you can go back to the country you have always loved. he acts like we can go back and be the country we once were. charlie: some people have said this may be the year trump gets the nomination, or even cruz. hillary clinton, having gone through a tough campaign year with real questions raised and some things hanging over her head having to do with the e-mails, this may be the time for a third-party candidate.

,ike bloomberg could afford it could attract a lot of smart people to work with him. matt: this is a perfect year and could be an accelerator for independent candidates. this will accelerate the process. the problem for the country is that if donald trump wins the domination -- nomination or hillary clinton, there will be two candidates that are disliked by the majority of the country and distrusted. we will tell the american public to pick these 2 who you don't like and don't trust. that creates the avenue for a third-party. i don't know if bloomberg fits that. i think there will be a lot of people considering that process. charlie: who's on the list? matt: the founder of starbucks.

he has talked about community and these things bit the problem is the elect -- things. the problem is the electoral college. there is not a lot you can add up to make 270. you can complicate things and help somebody else win or send a vote to the house of representatives. , this is the1992 year for independent candidate. dancharlie: you think they could win? matt: it could certainly change the process. charlie: in the house, ,ontrolled by the republicans the vice president selected by , to those republicans --ve to vote for republicans do those republicans have to

vote for republicans? matt: you must choose between the top three by law. i don't know which way they would go. they will actually think about what would be the best president . this is a serious constitutional crisis, if at that point it goes to the u.s. house. charlie: what is the crisis? matt: nobody reaches a majority of the vote and the popular vote, the popular -- charlie: a constitutional crisis? matt: the question is do we have a structure that fits the dynamic of the country, and people might wonder if we do. charlie: what happens then? matt: i hope they choose a popular choice and create a popular leader. charlie: is the mood of the country exasperation? matt: frustration, exasperation,

anger. disenchantment with the way current politics runs. to have tois going change. the current clinical model will have to change. -- political model will have to change. charlie: we will be right back. stay with us. ♪

♪ charlie: scott malcolm's and is a media fellow of the carnegie corporation. his latest book traces the growth of the internet and its response to intelligence needs. earlier this month, the intelligence agencies met with social media leaders. encryption is a concern for law enforcement. i am pleased to have scott malcolm's and at the table-- m alcomson at the table. how did the internet begin and how was it tied into intelligence and military issues? traced tos is a story the end of the second world war and the 1960's during the cold war.

computing came out of the wartime experience of world war i. thomas edison had an interview with the new york times where he said "killing men in war is a scientific proposition." that was a realization that donned on the great powers. he was thinking in particular of chemical war, a characteristic of the first world war, when the germans began chemical war. they were flat-footed and recognized their science quickly. scientific --e they mobilized to the scientific community quickly coming out of the experience. in terms of computing, the first big innovation of world war i was in radio. there were engineers in britain one switchd a electrical switch capable of memory. all computers since then use a switch without which computers

could not remember. the big american contribution also began in world war i, in terms of naval warfare. battleships were the major mega weapon of world war i. the power of guns increased steadily until ships could fire other. seeing each with the worked british to create a virtual reality of war so that they could imagine, successfully, where the enemy ship was going. that requires an enormous amount of information about each ship, computed rapidly. is usedse "computers" for people who do math. the people who made the tables of those information -- of that information were called "computers." employede 150 people

as computers and the second world war. world war.econd the machines were built by american engineers who could take those variables to introduce a higher accuracy of fire control. the machine, crunching its numbers at the center, started in world war i. the metaphor of using the computer to create a virtual environment to prevail militarily is a metaphor that no longerwhen it was battleships but airplanes and rockets and missiles and bombers and so on through the cold war. that was the major string of development that goes on through decades. many people have seen "the imitation game" about alan turing. he needed a machine to break the code.

is that an essential part of the history? scott: not as essential as the movie portrays it. the work that was done in cryptography is definitely an important part of the history of digital computing. the history of the internet came later. the essence of it, which is a very american thing, the command and control system with the number crunching computer that soable to create the world that you can hypothesize and make more accurate guesses, in the 1960's, what you had was a more familiar story, the desire of the military-industrial complex of the united states to develop systems which can anticipate the incoming bombers, thpontial of nuclear weapons, and shoot them down before they get close enough to bring the payload to the united states. that is the ultimate form of the command and control method that

started in 1916. that output in the 60's later came through in darpa. did that developed the utopian vision of the internet? scott: that came out of the geek world of m.i.t. charlie: you hear that wherever i saw a recent documentary about steve jobs, and you hear a lot of it, steve, talking about the potential, the eve?", the "can you beli he had a mission to talk about the power of the computer. scott: he was a fantastic salesman. [laughter] scott: he loves narratives. there is a great bit in the book about his involvement in "blue

boxes." this is a crazy story. ithre were blind kids w a heightened sense of hearing who could hear tones in the phone lines, codes by the telephone company for sending signals. they could discover things and communicate and make free calls over phone lines. there was a piece in 1971 by ron rosenbaum about this. mother sent him steve jobshis, and was fascinated. they built a machine to send the signals over the line and communicate. jobs was talking in the 1980's about -- by the way, these are illegal, these machines. in this interview, steve jobs was talking about what a fantastic, powerful feeling it

was to communicate over these phone lines, to be able to talk to people, communicate information. you were like, ok, that is steve period of extreme awesomeness. "the power that you felt, that you could affect things all over the world, manipulate them control them." i think that is what meg lavinia is-- megalomania is. one of the dixiecrats of silicon valley in the 1970's and 1980's was the combined is so much creativity and a complete ignorance of its own will to power. the debt power was real power, going back to the real world. it wasn't just in the fantasy world of los altos. i don't know if any people appreciated it.

if they had, it would not of been as successful as it was. where came the merger between what goes on in the military and venture capital? and the second world war, there was a man named george dorio, thought to be-- doriot, thought to be the father of venture capital. he was brought in by the president to be in charge of research and develop it for the military. he spent a fantastic amount of money, a lot of money on different projects, some work, some didn't. started awar, he non-venture capital company. example migrated out to the west coast.

the big example was that you take money, you should it at a lot of different projects,-- sh differenta lot of projects, and the hope is that it kicks off. the people who built the industry in california had military experience. aneral anderson had directed bombing campaign against germany. -- an davis had been sn odd oss guy in burma. charlie: computer companies like hewlett-packard got a big start. scott: absolutely. main thing is that in an environment of total war, you suddenly have an investor, so to speak, who is willing to spend a lot of money on a lot of projects without respect to hampering creativity.

it is not a big bother if fantastic sums are wasted. r&d waswhat wwii like. charlie: that history, where the united states held the key to ,yberspace and holds the key with the rise of china and other places, is there increased competition in cyberspace? scott: i would start in the 1980's and 1990's. the internet had been built, but no one cared. the research community, the army had gone tired of it. it was a scientific project among universities where they could talk to each other. a geek paradise. it remains that until it could be set free, politically, by the

end of the cold war. was that happened, it possible to develop in a way that did not threaten the united states. charlie: you're talking about 1989 and 1990? scott: exactly. that's american perio-- that hegemony maded of it possible for something as threatening as the internet to develop. no other state could develop it the way the west could-- the u.s. could. becameinternet politically and militarily and economically so important and , the largest states reasserted their authority. charlie: they wanted to take away authority from the u.s.?

what impetus of the snowden activists-- what dp the impetus of the this?n revelations add to i'm asking these questions that american had -- questions for the america had questions.ng these ofrica had a great degree authority. scott: the question was in silicon valley itself. for a decade, there had been relative agreements between

military intelligence agencies and the united states -- in the united states and the valleycon companies. they could be negotiated privately. what snowden did was tell the whole silicon valley subculture that they were serving something that they had not been aware of. charlie: a part of something they did not know? scott: yes, something political, contrary to their cyber dreams. charlie: some of them are libertarians, too. scott: absolutely. snowden had a huge effect, not the effect he intended. the whole recognition.

recognitionhe whole of what had happened. scott: the internet is being divided. feel justified in taking an active role in trying to shape the internet for their own identities and the world. ♪

♪ charlie: whether it is russia or

china, a big aspect is sovereignty. culture of china for example, there is a feeling that , in the political dialogue, it is none of your business. they don't want you coming in here and doing things could "-- things. "we want control." scott: there was a time where the cancellation in russia and calcu the internet-- the lation in russia and china, the internet was so out of their control. now, they have involved with all these different governments. they will try to restrain people in terms of what they can do and their power. what you have now in

china is that technology companies can rival american technology companies, in terms of innovative ability. charlie: some say chinese governments hope those companies. companies.se scott: no one is entirely innocent. [laughter] nsalie: if the head of makes the case that what china does that we don't do is that we are not acting in the interests of private companies, whereas the chinese government will encourage and be in favor of corporate espionage, espionage for the benefit of chinese corporations. the chinese tonight at -- deny that. there is concern among the american companies and american government. scott: admiral rodgers is better informed. [laughter] scott: the chinese government

for corporate espionage? certainly -- i don't know. charlie: you know there is a concern. the chinese are doing things to benefit companies in china. i'm asking. scott: the bigger concern is, now, chinese companies are doing things to benefit the government of china. company.s not a tiny , here in two efforts china, to essentially use these to put in the information that chinese citizens use when they apply for bank loans into a system that produces a rating. this is so that people who could not get loans are able to get them. it puts the information into a

system which the government controls. the chinese government could not do that on its own. there's so much information from the citizens that they can be used by the government to be better. charlie: the theme of the splinter-net is that companies want control of the internet. scott: yes. to oppose that trend, to create brakes on it. administration has been trying to come up with these, where you can at least limit the damage, retain some kind of broad public's fear online. sphere online. this utopian moment work cyberspace-- where

trumps the physical space and weary states fall along the way side, i don't think it is going to happen. charlie: you say the trend is in the other direction. to what end? the internet will be spo lintered? scott: it will be sponsored. -- splintered. the cat is out of the bag. charlie: people will try to get control of the internet. scott: exactly. geek subcultures will not raise on white flag. -- the white flag. the global subculture is dedicated to open code and will not stop.

they are preserving a public space for all of us. hackers are criticized, and of course, a lot of hackers do terrible things. but, there is an underrecognized subculture that keeps this thing alive. faith inair amount of that alibaba doesn't want to be a chinese company. they're building cloud computing centers around the world, not just because they want to sell chinese citizens. google, facebook, all these companies want to be global. one of the reasons it's reacted so strongly to these efforts in encryption in the post snowden. periodhe post-snowden is because of the enormous threat to their income. in some ways, this establishes a space of freedom. charlie: do you think apple is right? scott: apple is absolutely

right. ofe rogers came out in favor this the other day. he said arguments about no end to end encryption are not worth having. charlie: the debate about encryption is not worth having? i missed that. [laughter] he was speaking to the lannett council of couple of days ago. these arguments over and to end encryption-- end to end encryption are not worth having. charlie: he attacked the apple encryption efforts, saying it is not up to silicon valley to decide. that it should not be a decision of silicon valley. you're nodding. how can i read your mind? scott: there are a lot of

decisions that i suppose might be better left to a democratically elected government. that isn't the way it works, not with the internet and companies on this scale. censorship. charlie: most of those people , my impression is that , and secretary clinton spoke to this end of the day -- spoke to this, that there is an effort to find common ground. it is not all or nothing. scott: that's right. these arguments have been going on since the 1990's. the clip or chip argument and the backdoor argument of the now respectively are not that different.

this is an argument between companies and governments about who decides certain things. so you are for the companies? scott: they have done a better job and are more motivated. they have a bigger interest. charlie: what does the cloud at all of this? -- add to all of this? scott: it doesn't make a big difference except for cyber security. you can look at information that is hard for an attacker to find. it is extremely important. you are a friend and , andor to the article and , "technology does not work on its own, it is simply a tool, we harness its power." that seems to be an argument that the people should decide,

not the company. scott: i hate to be put in a position of disagreeing with that. charlie: that's what we do here. scott: look, look at the encryption debate. you have a number of different political factions, all for making different arguments, who about thisdemagogic question. they say that if they do not have encryption, everyone in your family will be unsafe. that is irresponsible. a motivation has to make sure that encryption does not happen. they have a commercial motive. they have a political motive to censor, to do all kinds of things, which can be powerful. if you have a plebiscite on every single piece of technology

, it is not going to happen. charlie: you come at the end of the day, you are saying rather than trusting the democratic process to do this, you trust a few corporate executives to do this. scott: i trust the worldwide geek culture that has demonstrated its commitment to open communication across borders for decades. the encryption policies come from those running the companies. this is not a culture. these are people. scott: this is what i am saying. these are lots and lots of people who have a track record of defending certain things, secure, open communication. they will continue to do that. the government motivation generally goes toward, i mean, it is kind of obvious could china's government -- obvious.

china's government is restricting as much indication communication as possible. charlie: the interesting point that you make is that it is often authoritarian government that makes that point that they want to be in control. india is not an authoritarian government. scott: india's policies are a work in progress. as a whole, they have not shown a tendency toward censorship and toward surveillance that either russia or china has shown. charlie: scott malcolmson. thank you for being here. we will be right back. stay with us. ♪ charlie: tell us as much as you

can. you are going to be at politico until the end of the campaign season, the end of the election? thank you fo mike: thank you for asking. i was at time magazine, and the idea of a website that covered politics seemed nutty and certainly risky. these guys saw the future in a way that i didn't. , which was three people in a sunroom in a van nuys house is now 450 people. trenton,d the world in albany, tallahassee, and at the end of the election, i move onto another venture. the ceo and i and head of the business side and the guy who

cracked the code on the subscription side of the business, after the election, the three of us are heading to a new venture. we will be there for the election. we thought 2008 was the election of a lifetime. based on the conversation today, i think this is the election of a lifetime. charlie: people want to know, is there division within politico? is this because mike and jim want to do something on their own, of course the some different vision at politico? mike: there are stories online that there were differences between our publisher rob, from a great family who made political possible. thert is a big believer in future of political. he made the expansion is in the states possible this year.

he built what you saw, 350 people in d.c. he is hungry for growth and wants more. jim wanted to start setting of his own. of his own. it is a great opportunity, but first, i want to make politico as best as i can this year. we need to be at the top of our game, every day. yourt to bring you and possiblehe best politico for this political year. charlie: thank you. we hope to see you this year and further. thank you for joining us, see you next time. ♪

if your doctor says you cannot leave the bed, you will not make it. it does not matter, get up and .aucus this evening i windsor taken part in caucusing for their favorite candidates.