♪ from our studios in new york city, this is "charlie rose." charlie: jake sullivan is here. he served as deputy chief of staff to hillary clinton and national security adviser to vice president joe biden. he was a policy advisor to hillary clinton's 2016 campaign and has been one of her closest aides for over a decade. many believe he would have been the national security adviser if she had won the election. is now a busy professor at yale law school and advisor on the iran nuclear negotiations. i am pleased to have him at this

table. to know a little bit about your life is to see a remarkable series of progressions. what is the key to that success? >> i think the single biggest thing is saying yes to opportunities when they come along. i always thought i would head home to minnesota and build a life and career there in law and politics. when i fish first -- finished with just a -- justice breyer, i moved home, got engaged, got involved in the community. asked me to come out to d.c. to get her up and running in her first year senator. the next opportunity came along to help hillary clinton and prepare her for the debates in the 2008 primary. the next opportunity came along. it's time, i said i'm going back on to minnesota. each time, i found a chance to serve. the result has been a extraordinary opportunity for me to learn and try to do some things along the way. modesty, tellut

me some things you think you brought to the table. >> it is things the justices taught me. no matter how right you think you are, whatever the argument is will have weaknesses and blind spots. no matter how wrong you think the other guy is, they will have some good points to make and you need to acknowledge both of those things. i learned that early on. i tried to find and study where the witnesses were on our side and where the good arguments on the other side were. if you take the iran nuclear negotiations as an example, i spent a lot of time with critics of the deal as we were doing negotiations to understand their concerns and communicate them to say we have to find hole. to close this . in addition to working hard and studying the issue, i think that is a skill set really important in washington and getting to be in short supply. charlie: making sure that you

hear the other side? >> that you hear the other side and even more, that you study your own position more than i think most people are and you're going to change her mind. you are willing to say i thought that was the right way to go about it, it turns out we should do a little bit differently. charlie: there is an interesting glimpse in the book "shattered" about the campaign in which secretary clinton was being bombarded by you and others with questions she may face. she said you try this, you will see how easy this is. >> yes. we were doing debate prep the day after bernie won the michigan primary. it was a hard day. we were in miami in advance of another primary debate, really important primary. i was chiding secretary clinton for her answers. and she said, let's do it this way, why don't you be me and i will be bernie, and we will see

how you do. the book makes it seleka was incredibly rancorous. it was not. i think she was basically trying to put me in the position as an advisor of what it is like to go through this. it was very informative. 2008h i had done it in because i had gone through debate prep with her and president obama in the 2008 campaign. late in the game, i understood what it was like to go through that. that is exactly the kind of thing i feel folks in my position should do more. charlie: in 2008, we were working for her rather than him? >> i worked for her turn the primary and for him during the general election. i was part of the debate preparation team to prepare him for the general election debate against john mccain. charlie: we will hear some of this when she writes her book about what happens. you were there, you saw what was going on. what happened? >> there is a reason she wrote a

book on this because it takes an entire book to fully explain the complexity and interconnectedness of a bunch of different strands coming together on one day in november to produce a defeat. i think it could have been any other day, she probably would have won the election. in part because of what happened in the closing days of the campaign. jim comey came out on october 20 8, 10 days before the election --charlie: you guys had momentum at that time. >> exactly. and it came out two days before the election with the letter saying i am again exonerating secretary clinton. this was an election with ebbs and flows that happened rapidly and repeatedly. if you look at any chart of the gap between trump and clinton, it would get wider and narrower week by week. the was only a very certain points for a few days at a time

that trump closed the gap and got even with her. this was one of those days. if it was a week later or earlier, i think the odds that she won would not be small. that is not to excuse -- charlie: it tell something about the momentum of campaigns. people say if hubert humphrey had two more weeks, he would have won as well. >> i cannot say this with any degree of certitude, but i divide the challenges we faced into three categories. the f.b.i.ategory is investigation and jim comey's late intervention and a systematic kremlin-directed information campaign. both had an impact. charlie: you believe that the hand of president putin? >> the intelligence community has concluded this was directed from president putin, highest levels of the kremlin, that he had an interest in interfering

in american democracy, and seeing donald trump win and hillary clinton lose. charlie: was it because he did not like hillary clinton or found something attractive about donald trump? >> i think all three things. he wanted to disrupt american democracy. charlie: ukraine as well. >> it was partly tit-for-tat, payback for what he felt was american intervention in russia and ukraine. both of which i think are dead wrong. it was partly that he is trying to drive a model, authoritarian model, and his credit democracy. he is trying to do it across europe and the united states. he wants to be a will to turn to his people and say keep me in power because the alternatives are these broken down systems with all this chaos, whether it is germany, france, or the united states. selling chaos in democracies is

putin's number one way of obtaining power for himself in russia. i think part of it was about her gender and part of it the fact she took tough stances against putin's behavior in eastern europe and against his own people. and then i think he genuinely thought it was a birthday present for him that he had a candidate like donald trump who not only adopted kremlin-favored positions on almost every issue but also adopted the language and luggage it -- logic of the kremlin, talking about how we cannot say anything about what happened in russia because we have killers, too. that is exactly the kind of thing putin would say. charlie: do you also believe president obama could have made a difference had he been stronger in his own declarations about russian hacking? >> i think president obama was in an impossible position. here he was commander-in-chief trying to defend american democracy, but also the

standardbearer of the democratic party in the middle of an election with a democrat against a republican. i think he wanted very badly to avoid any appearance he was putting his thumb on the scale in the selection, and that is to his credit. i understand why he decided that. charlie: you say you now understand the humility of defeat. was this the first time you have been defeated, onc wanting something badly and not getting it? >> i guess you could say the first time on any scale that matters. i've done everything from lose cross-country races to doing past on tests, two in the not getting exactly the job i wanted at different points. but this is the first time where something was riding on it beyond just what i wanted. charlie: i thought would say what was in the best interest of the country. >> and the merger between my own desire to win with a competitive

streak and i wanted the opportunity to serve again and having hillary clinton as president and not donald trump i thought would make a profound difference for the future of the country and the world. this was on a scale unlike anything i had experienced before. to it is something you got look at, learn from, see what you could have done better. but not just make it about yourself. this is also about how to think about the future of the united states, both our policy and politics, and our sense of how we relate to one another. i think the core country of who are we as a country is very much up in the air. things thed you say campaign believed in but somehow they were not heard? somehow because of how campaigns work or how people perceive the person speaking it did not get through? >> after the campaign, i had a

meeting with one of the british politicians leading the campaign for brexit, and they lost. i was working on the campaign losing to trump and this is a guy who lost brexit. he said in both cases, the common denominator was we were providing -- trying to provide answers and what people really wanted was anger, the sense that you got the system was broken. they did not want drive policy -- dry policy. don jr. don't you have -- charlie:. you have to say to people who support, i hear you? i feel your pain? >> you do. but the question is how you balance the diagnosis part of your message and the prescription part of your message. both bernie and trump were heavy on the diagnosis. that is really what people wanted. hillary clinton by constitution, by who she is fundamentally, is much more of a prescription person. she is going to want to look at you and say i can help solve

your problem through the following four steps. charlie: where would you put her husband? >> i would say he has more of the diagnosis in him going back to his days as a politician h insing the fles arkansas in the 1970's. i feel your pain part of bill clinton is famous about his personality. if you look at what hillary clinton was arguing for in this race, the types of policy she was pressing, and you look at what the democratic party has embraced as the message going forward, they are very similar. hillary was on the leading edge of many issues now coming to the fore. she talked a lot about growing monopoly power of corporations which is becoming a progressive watchword. charlie: one of the keystones of bernie sanders' campaign. >> but one of the things hillary did that bernie did not talk much about was this issue of antitrust and competition and

market concentration. bernie talked about breaking up the banks. charlie: wall street. >> he talked about single-payer health care. but the idea the corporate sector in the united states is getting consolidated and concentrated across the board and as a result people are extracting monopoly ransoms, this was an argument that had a long history in the democratic party going back to the populist days that hillary was putting forward that is now at the center of what the democrats are arguing. that is just one among many examples where i think she was on the right track. but our capacity as a campaign to connect that to the lived experience of people across the country was not -- charlie: how much of that is a question of the candidate and how much of the campaign? >> it is hard to say when you are the campaign and not the candidate. i have a tendency to take responsibility on our shoulders. hillary was out there busting her tail doing everything she could. i like to believe there was more

we could have done to set her up for success. charlie: how did you handle the defeat yourself? how do you deal with something so monumental that would have shape the next eight years of your life if she had won? >> you have to look at the real ramifications of this. the effect on me in my life compared to immigrant families were 11 million people who are scared when they go to sleep at night, it is hard for me to even ask that question. all i can do is think. now that this has happened, what can i learn looking backwards? more importantly in the landscape we face today domestically and internationally, what can i do to help to be constructive and recognize whatever you think of donald trump, 62 million americans voted for this guy. those people had an argument to make about how government was not looking out for them.

and we owed them answers as well. i'm looking to find what those answers are. charlie: you said the biggest challenge in the campaign as a y is pushing through the social media chatter to engage with the american people about serious issues that impact their lives in the future of this country. i think candidates are equally responsible for that because those of us in this media -- the media, especially at this table, wanted nothing more and would have done more. because of the risk, people don't want to do it that much. >> i would say if hillary clinton had been given the opportunity on a nightly basis every night and they make policy presentations and that is how the campaign was run, she would have taken it in a heartbeat. charlie: what i think is better is engage in conversation. >> pairing of.

a ruthless, brutal, interview on name your subject. of int had been the set the campaign, not only would she have welcomed it, she would have shined doing it. i will give you evidence. didthree of the debates cover the issues and all three of which she came through with flying colors. of all the criticisms to make against hillary's campaign, the idea she was not prepared to really go at the issues i don't think is right. the thing she has -- howlie: you will grant me, many one-our conversations did she do? >> i could add up for you the number of interviews she set aside thinking they would be on policy subjects in the first 30 minutes of them are on the males -- in else -- emails.

i think there becomes a real issue of balance. the example of that is the national security forum where matt lauer had 30 with hillary clinton and donald trump on the big national security issues of the day and spent the bulk of the time on e males -- emails. the point is hillary would constantly walk into interviews with the hope they would get around to her policy positions. i would argue one of the things s it hard for him to be candidate is she has a responsibility gene. she feels responsible not just for giving the best answer on one sheaign trail but believes in. it does not make for a simple message, but it would have made for a good agenda for working families in the u.s. charlie: what is going to happen to democrats? >> i think the democratic party

will be ok. there is a strong internal debate going on about the direction of the party. as you saw from what chuck and nancy pelosi put out a couple of weeks ago, there are core pillars to a policy agenda that span the party from bernie sanders. i think that will sustain us through 2018. charlie: are those the same issues that were talked about in 2008 with candidate obama and candidate clinton and also 2016 between candidate clinton and candidate sanders? it is the flight of the middle class -- flight of the middle class. what we don't know is how you stack up different prescriptions going back to policy. >> there is no doubt the number how you reverse

halloweeneen out -- out of the middle class -- hol lowing out of the middle class. charlie: why have we not been able to deal with the? i think our -- policy choices had a lot to do with it. a lot of people want to blame globalization or automation. fundamentally, it has been about the fact we have had a congress but also at various points in time presidents who pursued policies that hollowed out living wages and workplace protections and cut taxes in ways that starved the government of revenue to provide a social safety net. i think our choices have contributed to that. we have it in our power to make the forces of globalization and

automation work for us rather than against us. we have a platform -- charlie: had they been articulated -- have they been articulated? >> this gets back to the diagnosis versus prescription. it is easier to diagnose rather than say let's talk seriously about the solutions, including solutions that are hard for people to hear like the fact that some jobs are not coming back. i think as we go forward into 2020, this issue is crystallizing. our economy is changing rapidly. there are huge storm clouds on the horizon about how automation will disrupt jobs more rapidly than before. i have come through a difficult last campaign, but i retain some optimism going into the next campaign that the american people are ready to hear from people how we are going to do

this. theyie: in other words, heard somebody listening in 2016, donald trump. now that you have listened, what have you done? what will somebody else do? we will hold you to the same standard. >> they heard bernie sanders and donald trump to for them what they felt they had not gotten several years, which was a cry from the gut that this is not working. now they want to know what will work. i do believe that. i think there are a number of intriguing voices in our party with ideas around the future of corporate responsibility, how we build a new social safety net in a world in which people do not stay the same job for very long, around how you train and educate people for the jobs of the future. these have not gotten a full airing and are not just retreads. charlie: you would think with the onrush of technology in

different circumstances, clearly there are new problems and ought to be new solutions. i interviewed president obama in germany. i said we have the best economy and best technology. we have the best universities. we ought to be able to only 21st century. what could stop us? and he said our politics. that is one thing he came to washington -- he came as president believing he could do, believing that he could bring bipartisanship. propagates -- bob gates said to me the most difficult problem in america is not in any foreign land. problem isfficult the three square miles between virginia and maryland. lots of people agree washington is a problem. gridlock between john boehner and barack obama. has do we deal with that?

whatt we are up against -- we are up against is significant. charlie: they watch what says what they believe. >> if all you do is watch fox news, all you see is one thing. then you have gerrymandering and voter suppression. these are huge problems for our democracy. and then campaign finance. i will give you an optimistic take on this, which is i don't see washington dramatically changing overnight given that combination of forces. but the policy innovation that has real-world impact we are seeing at the state and local level is dramatic. donald trump just pulled out of the paris climate achievement -- agreement. we are likely to hit our goals because even republican governors are recognizing -- charlie: and corporate america. >> and corporate america has fully bought into it. the decisions they are making

will drive policy to a greater extent. i believe the nature of problems in the 21st century requires network solutions. and the united states is best situated to lead in that because we can most take advantage of networks, universities, private sector, and build global coalitions to take them on. that said, if donald trump implements the kinds of things he talks about, and he has not done as much of that as we would have feared so far -- charlie: like replacing obamacare. obamacare, getting us into the kind of trade war that could crash the global economy, deciding we will retreat entirely from global problem-solving, doing more things like paris -- as long as he can be constrained from that very destructive agenda, the kinds of things you have heard from his advisors, as long as he can be constrained from fully carrying out the agenda, the

united states has all the capacities to lead and win. charlie: congress responding to the people? stare in theto face the consequences of certain decisions and deciding not pursue them. i don't know if that will hold him or his team back. but it seems that will at least present one factor as they move forward. ♪

>> let me turn to foreign policy and the most pressing issue today. then we'll talk about other issues. north korea. today secretary mattis weighted in, after the president weighed in. where do you think we are and what are the risks of where we are? the dilemma that this president and secretary mattis and others are confronting. is there a third alternative, other than war on the korean acquiescing and north korea having a nuclear-tipped icbm? resolve another way to this? >> and becoming another country that has nuclear weapons. >> nuclear weapons that can reach the united states and hold us at risk. very unpalatable options. they go to work every morning an think, how do we find option? what they have concluded is that the answer lies in a combination of pressure and getting the to basically shape north

korean behavior so that they stop their march forward. >> no question in your mind that the chinese could change north korea's nuclear path in a moment? by simply cutting off, not products and i know you believe perhaps paying them off? >> i do not believe that the chinese could get north korea to completely give up their nuclear i believe thate kim jong-un sees his nuclear to his as existential regime, so he will no more give them up than he would give up power. believe the chinese could get the north koreans to stop moving forward, meaning no no more advancement in capability, and therefore not reaching the point where they actually creditably hold the united states -- japan mayctly where be or other countries on the brink, if they want it? >> well, they're beyond that, actually got the weapons. now, we need to work over time to roll that back. the near term, our immediate goal should be a halt

on further testing, both missile and nuclear, because if we halted it now, we would be in a position where we would then time to be able to deal with the broader north korea nuclear program. that china has the capacity to do that. and the question is, is all of this tough talk from the administration a means of trying chinese's attention so that they feel a greater incentive to do that, or is it actually a precursor to war? >> am i speaking the same now?age we're talking about fury and -- >> this is the amazing thing. if you read donald trump's without his name on it and you read a statement from kim jong-un without his name on you wouldn't be able to tell the difference. that's a problem. we are the world's superpower. the hermit is kingdom. mark twain used to say, when you with a fool, you've got to be careful, because people won't be able to tell the difference. same thing goes for trading this kind of bombast.

havingwhy i think toughly worded statements like what secretary mattis put out is but donald trump popping off at the mouth about fire and fury is not helpful in any way, it's not tough. it's inconsistent. it's lashing out. itis there a possibility will get their attention? like normal language, like strategic patience will not? >> i think that the statement you saw from secretary mattis they where he described sheer capability of -- the united states has to deal with theh korea, that will get chinese attention as much as what donald trump says. >> interesting you said the chinese. it will get the chinese attention, rather than the north koreans. >> more so. yes. and that's -- >> like it was directed to the chinese rather than the north koreans? >> no. both.k it was directed to i think that mattis and the administration is genuinely concerned about the north koreans carrying out a provocation in the near term and they want to warn them. but i do think, as a strategic matter, the main audience is

china, because they would like to understand that in the absence of china taking decisive action right now, we could end up in a military conflict. theproblem when you go extra step that trump goes and you start hurling around threats actually couldat provoke the north koreans, because they don't know how to interpret that. to have -- >> they might be provoked to do something like launching an kind? of some >> potentially against south korea, for example, which then all off to the races? defenduse then we would south korea. when you look at the chinese today, the obama administration was called, which you know, shift the attention word pivot, was the used -- shift the attention to america, asia. did that ever happen? >> in important ways, it did

happen. i'll give you a couple examples. a group of leaders in the eastpacific called asia summit. before president obama came into office, the united states was that.part of this is the premier political and security forum in asia, and did not have aes seat at the table. all of the southeast asian were there, even the australians. president obama ended up putting us there. we are now at the center of the institutions in asia. that's one. two, we have engaged in a amountft in terms of the of military posture we've built up in asia. to china?what >> to say, not just to china but the entire region, that the toted states is going enforce a rules-based order. we're going to make sure there's in the of navigation south china sea. people think that's a far away place. world's merchant

tonnage goes through the south china sea. thatina decided to shut down, that would have dramatic consequences to the united states. presencehat the naval says is, we are going to make sure the sea lands are open, make sure that no country can dominate other countries and be adverse to our doing so.in >> what do you think the chinese want? i think ultimately the chinese like to be the preeminent power in the asia-pacific. and their notion of what that is quite different from the american notion. the united states, for all of our faults -- >> you also can argue they were the preeminent power at some point in the long history of china. >> yes, but of course with technology, forced projection, interdependence, what that means today compared with quiteies ago is dramatically different. and chinese dominance looks like stark.e united states had flaws and foreign policy. but one constant has been this

notion that we believe we can advance our interests and others advance theirs as well. the chinese use this phrase, win-win but for china, really means we both win if you kind of get out of our way. the region would be worse off without a strong, resident u.s. presence. >> do you believe china wants to be the dominant power in the world? it hasieve that sufficient economic power that it should have a bigger voice than it does? dentally think that. i think they're right about that. >> exactly. >> i think the chinese deserve -- >> as an economic power. >> and a larger voice in the example, in the management of the international monetary fund. and the fact that they haven't gotten that yet -- >> shouldn't we be helping them get that? of the obama administration was to help them get it, and congress stood in the way. it should.y believe that being said, with that extra

step of china having more of a at the table, having more capacity to shape decisions, and player, comes responsibility. the chinese, for a long time, in the global economy, have played what i call a selective stakeholder role. freeve been something of a rider. they follow the rules they like. they don't follow the rules they don't like. greaterth having a voice and vote, which they deserve, they should also be taking on more responsibility to their part to uphold the basic rules. >> they were then told, as you remember, that they would have to decide whether they want to be a stakeholder and act like a stakeholder. >> right. >> in the conduct of their affairs. >> right. >> when you look at russia today, what do you think putin's ambition is? >> well, as i was saying earlier context of the campaign, in talking about why he intervened in the united states, oneink putin's number ambition is to stay in power. and then his second ambition -- >> is he at risk of losing power? >> so putin, for a long time,

had a basic bargain with his i will ruleh was like an authoritarian and i will my oligarchic friends but i will also help you do better economically. no longer happening for the average russian family. >> because they're energy dependent? >> they haven't modernized their economy in any way, and the oil from a high in the 120's when russia was doing real down to less than half that. and the long-term future doesn't look very bright for that. he made a second bargain with them, which is keep me in power, andme enrich all my friends your living standards will go up. but i'm going to restore glory to russia. feel better to yourself. that was the intervention in ukraine, in syria. will wearthat too off, because the russian people are going to get tired of sending their people to go fight in other places. >> but it is undeniable that they're a leading player in syria.f what happens in >> they are absolutely a

critical player in terms of what happens in syria. they went there and supported at the invitation of assad. >> and because they were to set aside any sense of basic human decency, to support a campaign of mass slaughter against the syrians. >> has that changed since trump president? >> has which part changed? >> russia's policy with respect evenria, changed at all, though they do have an agreement now? >> no. in fact i would argue that point,believes at this it can essentially ensure that thed is in power for indefinite future, that it will -- >> most people will argue that don't really care whether assad is in power. they just want to make sure there is a stability, because what putin fears most of all is instability. >> so having dealt with the for years onctly the syria question, when i was in government, i heard them say aboutedly, we don't care the future of assad. >> exactly. but they -- >> however, their actions have suggested that defending this regime, because they see no

regime --e to this assad at the top and -- >> that it's unacceptable -- be acceptable to them. they see no alternative that would be acceptable to them, other than assad. don't see someone who they could bring in as a replacement that could hold the country theirer and protect interests. so even though in theory, assad, int wedded to practice, they have been joined at the hip with him. they have basically defended his prerogatives all the way through. and i think the deals they are currently cutting are setting for up for success themselves, for russia, at the syrian sunnie communities, which is the majority in syria, and long-term regional stability, because it's not going to deal with the underlying problem of violent extremism. want to be athey european power? >> i think number one putin wants to do something he said publicly. he would like to essentially reconstitute the sphere of influence that was the soviet union. taking over those

countries? >> without necessarily fully those countries. >> if you talk to him, he'll tell you all about the russian ofple behind the borders countries that used to be part of russia. prepared's perfectly to use military force to advance this objective. means central asia, the caucuses, and it means members of nato, who he believes rightly russian sphere of influence. i have to say, he has done a very good job of kicking up dust nato expansion, saying you made me do this. makeu threatened to go and aorgia and then ukraine member of nato. wasn't it a mistake for us to expand nato? >> no. if we hadn't expanded nato to the baltics, and just play out reverse counterfactual -- >> there would be no restraint for him. to poland or hungary. what would have happened over

the last 20 years, had we not that? you can see his aggressive tendencies towards countries that do not have nato membership. believe that the fact of the article five guarantee to those countries is what keeps stability and avoids war in the peninsula. and this idea that somehow had do it is a newim argument. he didn't make this argument in 2005 or even 2010. it when he --ing >> but russians have always had a great concern about their border. in their d.n.a. napoleon, there na was always a sense of the threat changes. >> right. in the obama administration, we dealt with this issue of the system.defense we were setting up to deal with iran but they felt we were setting up to deal with them. is an interesting question. how difficult is it in these negotiations, and you dealt with the iranians very closely, to speak to the fears you?e person across from make sure that they know you

understand their fear? >> it's an incredibly good question, because i think what most people don't understand is diplomacye amount of is just -- isn't even bartering or trading. the just trying to get on same page, a common picture of what is going on. what kind of threat you represent. opportunity you represent. and that means hours, days that spend with the iranians, trying to explain to trying towe weren't engage in regime change, that we weren't there just to try to them, that we legitimately believed and did not think it was a pretext that seeking nuclear weapons. >> could we, for example, if in fact we could convince the korea that weh had no intention, and secretary mattis has said this, and also the secretary of state has said this, no intention of attacking you. if he believed that, and we make him believe that, would he be less enthusiastic,

because he wouldn't look at what happened in libya and other places that he sees as a reason for having nuclear weapons? tieell, it's an interesting between iran and north korea today, in answering this question, because no matter how many times we tell him we don't to change, you know, topple you. we're not trying to take over north korea. sees is members of this administration actually talking about regime change, in both north korea and iran, and talking about a deal that was cut with the iranians on their -- >> but it is not mattis, not the secretary of state, not the president. it? >> what i think -- >> michael flynn may have talked about that. >> an unsophisticated observer of american politics, someone it closely,look at could pick up a body language that says, yeah, yeah, they cut iran. on but we don't really think we have to abide by that. to getthe way, we'd like rid of those ayatollahs.

they can pick that up. if you're kim jong-un and that's basically the policy direction of the united states, why would you ever believe, when someone you, and says, we want to cut a deal on your nuclear program, that that's going to be up?he up and >> you think there will be regime change in iran, that ae -- we all know there are lot of moderates in iran. and they -- a million went into after the election. >> i think that the current setup in iran, where the will of consistently suppressed, where the rights, not just of minorities but the arerity of iranians, abused, is not sustainable over the long term. change ink democratic iran has to come from within iran. it can -- testuld you put the same to the chinese? it's not sustainable over the long-term? something will happen which would take away the power of the party. to control the state. >> right. and xi jinping is heading into this party congress at the end this notion, with in mind.

the number one thing he has to worry about is maintaining party ownrol and putting his personal stamp on that. in the 1990's, we made a bet the chinese into the wtl. our bet was that over time, as liberalize economically, they're going to have to liberalize politically. the proposition that view ofned a bipartisan china at that time. it's been more than 20 years. that hasn't happened yet. laws of physics continue to suggest the trend is in that direction? nipably, but i don't think nip -- anyone can say there is going to be a change within the china, because they have defied expectations for a very long time. indo you see any weaknesses that government that might make them less of a power than we imagine them to be? faces huge internal contradiction, relating to demography, the aging of their population, the urban rule the fact that there still is rampant corruption, the

chinese people become middle class, their expectations go up. and their demand to be fairly and efficiently and justly goes up as well. system may not be able to keep up with that. there's a lot of arguments one it.make about >> the advantage of -- if it provides a market, so that the economy can grow. and that's exactly, as you know, much better than i do, that's how they've turned the economy around, rather than -- let's not export stuff. our ownll stuff to people, who now can't afford it. >> unfortunately, and the chinese may be able to navigate this turn effectively, it is very difficult to go from an corrupt oligarchic system to one that is a genuinely free market model, through massive economic turmoil. >> do they still demand that our come thereies who give up sort of their research, some of their trade scets, some secrets,-- trade

technical secrets? >> even where they don't, they tend to find ways to design joint ventures and partnerships where they benefit from the intellectual property of american firms. so it's not the case that every american firm going over there to hand over the keys at the beginning. but the chinese have become more att and very sophisticated being able to extract the learning -- not just from tech firms but across sects. given them advantages, both in the commercial space and in the military space.

>> how and where will history judge the obama administration veerly? >> i think the area where we were least able to have an could, where we probably have had an impact, was in syria. earlier?more >> doing more earlier. huge gap between our means and our objectives. we set aside -- we said assad go, then we really weren't prepared to do much to make that happen. and gap. this yawn >> then there was isolates. >> to close -- was isis.ere >> we had to both campaigning the degree to which we were engaged but also become more realistic about the ends, earlier on, to recognize that having assad go right at the start wasn't going to work, that you had to have a diplomatic process. i think we came too late to

that. >> and coming in earlier would have meant what? early on inhing, the conflict, the opposition had momentum,battlefield they controlled larger portions of the countries. the iranians and all their were not yet fully engaged t. choices facing assad and his backers were -- it would tryingant at that point, to get a diplomatic process going. the end result of which would have been a transition from but would not have made bands at the beginning. about terrorism, you've made this point a number of times. even if after we've overrun and retake raqqa and retake mosul, there will be an isis two, an squared, an isis something. oft do you think the future terrorism is? because it has to be a concern thinking about the future. >> it starts with understanding exactly what the problem is, as saying. just there are 25 million sunnies who

baghdad and dominatedtwo iranian capitals. those sunnis feel disconnected theytheir countries, and have been subject to this jihadist ideology. we knock them out and they the winds, but they are going to reconstitute, because of those factors, unless out a way to get the syrianovernment and a political solution to give them some hope for the future. more believe that is possible on the iraq side right now, that if the prime minister the next election, he has shown his willingness to actually reach out and deal with sunni populations in iraq. i am much more concerned about future of syria, because i think we are only focusing on leaving the russians and assad to do --

>> in terms of the civil war? civil war, safe zones, et cetera. i think the net result of that reemer jensbe the of a -- reemergence of a jihadist force in syria. we have to think about syria diplomacy as a part of our counterterrorism strategy. >> you said two things that interest me. you, my core principle is that the fundamental project of american foreign policy is to secure and sustain american global deeplyhip, because i believe that a world america leads is a world where everybody up better off, certainly where u.s. values are protected, ourwhere the values of friends are also protected. for me, that's the cornstone. losingtion is, are we that leadership and that respect? world?the >> i think it's hard to answer that question, other than to say are.we >> and you mentioned that by the

gottion of the g20, when we out of the paris accord, you measure that in what other ways, wants us torld lead, to act, and we're not acting. >> well, i would say a second area -- the g20 was a decisive moment where you could states was on its back foot, was not the central not driving the agenda, was not shaping circumstances, so that is one. when europeans talk about the leader of the free world now, they talk about angela merkel, not donald trump. that's the second example. third, i think in the asia-pacific right now, even though north korea is a critical stay onnd we have to top of it, our entire asia policy is essentially a north policy. to the exclusion of really focusing on almost anything else. and as a result -- remember,ut, president obama said to president-elect trump, your biggest problem is going to be north korea. and it is. >> but we can't only deal with korea to -- >> that's the nature of being

president. the region, rest of particularly a region as consequential as the asia-pacific. now, chinese and indian forces are 100 yards away from pointing guns at one another. the possibility of these two going to war would have a dramatic impact on us. we're not paying attention to that. the chinese are continuing to expand their influence in the china sea. we're not paying attention to that. i think you can see, in a lot of different places, where we aren't leading. but i will say this about american leadership, because i think this is very important. while i believe that the united states must continue to lead a order, i alsoobal believe that we have to think about that leadership in a different way. we call all the shots. it doesn't mean we absorb all the costs. we buildeans is that coalitions to solve the big problems that we face, that no their own, solve on but that the united states of america has to be a part of solving or it won't get done. that is what i mean by leadership. it does mean a larger role for

emerging countries and for our allies and partners. and our leadership has to be directed, just to tie the two conversation together, at solving the core problem that america faces, how are we going to have an economy that works for everyone? we can solve that problem through more principled global leadership, then we will really delivered, not just for our people, but -- anbecause we do live in interdependent world. you said on the domestic side, i think the touchstone of everything is whether a policy going to contribute to strengthen the middle class or to hallowing out the middle class. that i ask question more than any other domestic policy. thank you for coming. pleasure to have you. >> thank you for having me. i appreciate it. >> thank you for joining us! time.u next ♪

♪ yousef: welcome to "best of bloomberg markets: middle east ergo -- east." has struggled to make progress in resolving the qatar crisis. made anothervivor no-confidence motion. a new twist in the dana gas zika. energy explorer -- gas zika