♪ announcer: from our studios in new york city, this is "charlie rose." charlie: jake sullivan is here, deputy chief of staff to clinton and national security adviser to vice president joe biden, a senior policy adviser on hillary clinton's 2016 presidential campaign. he has been one of her closest aides for over a decade. many believe he would have been national security adviser had clinton won the election.

he is now a visiting professor at yale law school and senior advisor to the u.s. government on the iran-u.s. negotiations. welcome. >> thank you are having me. charlie: to know a bit about your life is to see a remarkable series of progressions. what is the key to that? >> saying yes to opportunities. i thought i would head home to minnesota and build a life and career there in law and politics. i moved home in 2005 thinking that was where i would be. i joined a law firm and got engaged with the community. i was asked to come out to a while to washington dc by a senator and the next opportunity came along to work for hillary clinton and prepare her for the debates and the 2008 presidential primary. the next opportunity came and clinton with hillary in the primary. the next opportunity came and each time i found a chance to serve. the result is been an extraordinary opportunity for me

to learn and to try to do a few good things along the way. charlie: without modesty what did you bring to the table? >> it is something that i was judge calabrese and judge breyer. no matter how right you think you are, whatever your argument is will have weaknesses and blind spots. the matter how long you think the other -- how wrong you think the other person is, they will have good points. you need to acknowledge both. i learned that early on and try to find where the weaknesses and blind spots were and what the good arguments on the other side were. if you take the iran-nuclear negotiations for example, i spent a lot of time with vociferous critics of the deal to understand what their points were. in addition to working hard and

trying to study the issue, that is a skill set in washington that is in short supply. charlie: making sure you hear the other side? >> more than that, that you study your own position more than most people do. and you are willing to change your mind. you're willing to say, i thought that was the right way, it turns out actually we should do it 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 would face and she said you try this. you will see how easy this is. >> we were doing debate prep, the day after bernie had won the michigan primaries. it was a hard day. we were in miami in advance of another primary debate before a set of very important primaries. i was chiding secretary clinton for her answer to questions. good,e: it wasn't very you said.

>> 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 sound like it was rancorous, it wasn't. she was basically trying to put me in the position as an advisor of what it it is actually like. charlie: was it informative? >> it was. i wish i had done it in 2008, because i had gone through debate prep for her in 2008 and it was late in the game that i understood from the perspective of the person you are preparing what it is like that is exactly the kind of thing i feel folks in my position should do more of. charlie: you worked for her rather than him in 2008? >> i worked for her in the primary and then i worked for him in the general primary debates against john mccain.

charlie: we will hear some of this from her when she writes her book. you were there -- what happened? >> there is a reason she wrote a book on this because it takes a book to fully explain it. the complexity and connectedness of a bunch of strands coming together. if it had been any other day, she would have won the election. believe why do you that? >> in part because, of what happened in those closing days of the campaign. jim comey came out on october 20 8, 10 days before the election -- charlie: you guys had momentum than? >> he came out again two days before the election, saying he was exonerating secretary clinton. so this was an election with ebbs and flows that would get wider and narrower and wider and

narrower. if you look at a gap in the chart between trump and clinton, it would get wider and narrower week by week and month my month. it was only at very certain points for a few days at a time that trump closed the gap and got even. this was one of those days. if it was a week later or earlier the odds that she would've one would not have been small. it was contingent. charlie: there is also something about the momentum of campaigns. people say if hubert humphrey had had two more weeks he would've won. >> i cannot say this with certitude but i basically divide the challenges we faced in this campaign into three categories. the first is variables. the fact of an fbi investigation along with comey's late intervention. a systematic kremlin-administered campaign by the russians. our intelligence community has concluded that this was directed from president putin and the 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 found something attractive about donald trump? >> he wanted to disrupt american democracy no matter the candidate. charlie: maybe he felt like we try to disrupt his campaign? in ukraine? >> it was payback for what he felt was american intervention in russia and ukraine, both of which i think are wrong. it was partly also that he is trying to drive a model -- an authoritarian model and discredit democracy. across europe and in the united states. he wants to turn to his people and say, keep me in power because the alternative is these broken down systems. sowing chaos in democracies is

part of putin's number one mission in russia. in addition he had a personal beef with hillary clinton going back years. partly because of her gender and partly because she took tough stances on him in eastern europe. i think he genuinely thought it was a birthday present for him that he had a candidate like donald trump. that not only adopted kremlin-favored positions on issues but also the language and logic of the kremlin area talking about how -- we cannot say anything about russia because we have killers too. that is exactly the kind of himself wouldin say. charlie: do you also believe that president obama could have made a difference if he had been stronger in his own declarations about russian hacking? >> i think president obama was in an impossible decision on this issue. there he was trying to defend

democracy but also the standardbearer of the democratic party in the middle of an election. i think he wanted very badly to avoid any appearance that he was putting his thumb on the scale in this election. that is to his credit. decided notwhy he to. charlie: you said you now know the humility of defeat. is this the first time you have been defeated in your life in terms of wanting something badly and not getting it? >> i suppose you could say it is the first time on any scale that matters. i have done everything from lose cross-country races to doing badly on tests -- in the past not getting the job i wanted. that is happened. this is the first time that something was riding on it beyond what i wanted. charlie: and in the best interest of the country -- and the influence i might've had among the people trying to shape the world? >> the merger between my own desire to win because i am competitive and i wanted the opportunity to serve again and

the fact that, having hillary clinton as president instead of donald trump would've made a profound difference to the future of the world. this was like a scale unlike anything i had experienced. you got to look at it and learn from it and what to draw from it but not make it about yourself only. i should not just make it about myself. this is also about how to think about the future of the united states. our policy and politics. and our sense of how we relate to one another. this core question of who are we as a country? is one that is very much up in the air. charlie: did you say the things -- the campaign and her -- that somehow they were not heard. because of somehow how the people perceived the person they saw us taking. somehow it did not get through.

>> i had a meeting with a british politician who was leading the remain campaign for brexit. they lost. i was losing to trump and this is a guy who lost to brexit. he said that in both cases the common denominator was we were trying to provide answers and what people really wanted was anger. that the system was broken. they didn't want dry policy. charlie: don't you have to say to people that you want to support -- i hear you? and the old slogan, "i feel your pain." >> you do but the question is how do you balance the diagnosis part of your message and the prescription? both bernie and trump were very heavy on the diagnosis and that is what people wanted.

hillary clinton, by constitution, by who she is, is much more of a prescription person. she will look at you and say, i can help solve your problem through the following 4 steps. charlie: where would you put her husband? >> he has more diagnosis in him going back to his politician days pressing the flesh in arkansas back in the 19 70's. the "i feel your pain" piece of no clinton's personality is well-known. and whatok at hillary she was arguing for in this race, the types of policies that she was pressing if you look at the democratic already now, they have embraced as their message going forward. they are similar. hillary was on the leading edge of many issues that are now coming to the front. she talked about monopoly power of corporations which is becoming a progressive watchword. charlie: which was a keystone of bernie sanders campaign. >> one of the things hillary did that bernie did not talk about was the issue of antitrust and

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

could have done" to set her up for success. charlie: how did you handle the defeat yourself? something so monumental that would have shaped the next eight years of your life? >> you have to look at the ramifications. the effect on me in my life day today compared to the effect on the lives of immigrant families or people who were on the verge of losing health care -- or 11 million people in seoul right now who are scared. charlie: it is relative. >> it is hard for me to ask the question. now that this is happened what can i learn looking backwards? more importantly in the landscape of today, what can i do to help a little and be constructive. in doing that, to recognize that whatever you think of donald trump, 62 million americans voted for this guy. 62 million. those people had an argument to make about how government wasn't looking out for them and we owed them.

i am looking to find with some of those answers are. charlie: you said the biggest challenge on the campaign is a policy guy, the difficulty of pushing through the media chatter to engage with the american people in a serious conversation about real issues that impact their lives in the future of this country. i think candidates and their staff are equally responsible for that. i mean, because those of us in the media, especially at this table, wanted nothing more. as you know, during the campaign i engaged her in a one-our conversation and would have done more. and people, because of the risk of the campaign, they don't want to do that that much. >> if hillary clinton had been given an opportunity on a nightly basis -- donald trump gets one hour and she gets one hour and they make policy presentations, she would have taken that. charlie: engaged conversations is better. >> fair enough.

a ruthless, brutal interview on, name your subject. what will you do about this? american military -- if that had been the set up, not only would hillary have welcomed that she would have shined doing it. one piece of evidence, all three of the debates which were largely substantive, covered the issues and all three of which she came through with flying colors. i don't think it is fair, of all the criticisms to make of the campaign, the idea that she wasn't prepared, to really go at the issues, i don't think is right. the thing she has -- charlie: you will grant that how one-hour conversations did she do during the campaign? >> i can add up the number of interviews she set aside thinking they would be about policy and the first half hour was about emails. charlie: you would not expect someone to it not asked that

question though? >> i think it becomes an issue of balance. a good example of that is the national security for them that took place on the deck of the intrepid in new york where matt lauer had 30 minutes with hillary clinton in 30 minutes with donald trump on the national security issues of the day. he spent the bulk of the time on emails. hillary would constantly walking to interviews with the hope that it would get to policy -- i would argue, one of the things that makes it hard for her to be a candidate is that she has a responsibility gene. she feels responsible for giving the best answer and that she feels she could deliver. that makes for longer position papers -- it does not make for a simple message. it would have made for a good agenda for working families in the u.s. charlie: what will happen to the democratic party? >> i think they will be ok. there is a strong internal debate about the substantive direction of the party.

as you saw from chuck schumer and nancy pelosi, there are some core issues to a policy agenda that spans the party from bernie sanders across. i think that will sustain us across the 2018 and 2020 cycle. charlie: those issues -- in 2008, from candidate obama and candidate clinton, and also in 2016 between candidate clinton and candidate sanders -- it is the plight of the middle class. that has been a central issue. a political issue. what we don't know is how different people stack up different kinds of prescriptions going back to policy. >> there is no doubt that the number one problem, is how do you reverse the hollowing out of

the american middle class. charlie: and that did not start yesterday. >> that is been going on for 20 years. charlie: why have we not been able to deal with that? >> in policy? charlie: yes. >> are policy choices have had a lot to do with it. people blame globalization or automation but fundamentally at -- it has been about the fact that we have had a congress, and also at various points in times, presidents who aggressively pursued policies that hollowed out unions, that refused to raise wages, and that cut taxes that starved the government of revenue that they could have provided a social safety net. i think it our choices more than anything have contributed to it and we have it in our power to make the forces of globalization

and automation work for us rather than against us. i do think the prescriptions have changed. think -- charlie: have they articulated on anti-globalism and contempt for globalists? >> this gets back to diagnosis-prescription. it is much easier to diagnose. then to step forward and talk about the solutions. including ones that are hard to hear. like that coal jobs are not coming back. this issue is crystallizing. there are huge storm clouds on the horizon about how automation will disrupt jobs even more rapidly than before. that is focusing the mind. i have come through a difficult last campaign but i retain optimism going into the next one that the american people are now

ready to hear from people -- how will we do this? charlie: they heard someone listening in 2016, now they want to know, what have you done? what would somebody else do? we will hold you to the same standards. >> they heard bernie sanders and donald trump do 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 believe that. i think there are a number of intriguing voices in our party that are putting forward ideas around the future of corporate responsibility. around how we build a new social safety net in a world in which people don't stay in the same job for very long. how you train and educate people for the future. these have not gotten a full airing and are not retreads of the 2000's or the 1980's. charlie: i agree. you would expect that. with technology and time and

different circumstances, clearly, there are new problems and ought to be new solutions. here's what interesting to me -- i interviewed president obama in germany and i said to him, we have the best economy, we have the best technology, we have the best universities. we ought to be able to own the 21st century. what could stop us? 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 -- bob gates -- the most difficult problem for america he said is not in any foreign land, it is three square miles between virginia and maryland. lots of people agree that washington is the problem. gridlock in terms of, on the one hand, john boehner, on the other hand barack obama. how do we deal with that?

>> what we are up against is severe. people living in alternative universes in terms of media they consume. charlie: they only watch what they believe? >> and they don't see the same thing happening. if you only watch fox or msnbc -- then you have gerrymandering and voter suppression. these are huge. campaign finance. i will give you an optimistic take on this -- i don't see washington dramatically changing overnight given that combination of forces arrayed against it. the policy innovation that has real-world impact that we are seeing at the state and local level is dramatic. donald trump just pulled out of the paris agreement. we are likely to hit those goals anyway because republican governors in a lot of states are recognizing clean energy future. corporate america has bought into it. the investment decisions they are making will drive policy to a greater extent than what scott pruitt does at the epa.

i believe the nature of problems in the 21st century requires network solutions and the united states is situated to best lead in that. we can take advantage of networks from our universities, private sector, our states and localities, and build global coalitions to be able to take them on. that being said, if donald trump implements the kinds of things he talks about, and he has not done as much of it as maybe we would have feared so far. charlie: like replacing obamacare? >> getting us into the kind of trade war that could crash the economy. d siding we're going to retreat entirely from global problem-solving. doing more things like paris. as long as he can be constrained from that very destructive agenda, the deconstruction of

the administrative state, the kinds of things you have heard from his advisers -- the united states has all the capacities to lead and win. charlie: by congress responding to the people? >> probably in some cases restrained by reality. by actually having to stare in the face of decisions and deciding not to pursue them. i don't know if that will hold him or his team back but it seems to me, it presents one factor going forward. ♪

♪ charlie: let me turn to foreign policy and the most pressing issue today. north korea. we had today, secretary mattis weighing in after the president had weighed in. and the north koreans have waded in about guam. where do you think we are in the risk of where we are? >> the dilemma that we are facing, and they are discussing, is there a third alternative? war on the korean peninsula or an icbm -- is there another way to resolve it? nuclear weapons that can hold us at risk. those are two unpalatable options. is there a third possibility?

they go in to work and think, how do we find it? what they've concluded is that the answer lies in a combination of pressure and getting the chinese to shape north korean behavior so they stop their march. charlie: there is no question in your mind that china could change north korea's decision in a moment by cutting off? not buying their products. in a sense, paying them off. >> i do not believe the chinese could get north korea to completely give up their nuclear program because i believe that kim jong-un, sees his nuclear weapons as existential to his regime so he will not give them up. i believe the chinese could get the north koreans to stop moving forward. no more advancement. charlie: leaving them where japan may be? or other countries who are on the brink of having it if they wanted. >> they are beyond that because

they actually have the weapons. we need to work overtime to roll that back but in the near term, the immediate goal should be a halt on further testing, missile testing and nuclear testing because if we halted it now, we would be in a position where we would have time to deal with the broader north korean nuclear program and i think china has the capacity to do that. the question is, is all of this tough talk from the administration a means of trying to get the chinese's attention so they can do that or is it a precursor to war? charlie: talking about fire and fury and all those things. jake: the amazing thing, you know, if you read donald trump's statement without his name on it and you read a statement from kim jong un without his name on it you really wouldn't be able to tell the difference. that's a problem. we are the world's super power. north korea is the hermit kingdom. mark twain used to say when you argue with a fool you got to be careful, because people won't be able to tell the difference. the same thing goes for trading this kind of talk. that is why i think having toughly worded statements like

what secretary mattis put out today is fine, but donald trump popping off at the mouth about fire and fury is not helpful in any way. it's not tough. it is inconsistent. it's lashing out. charlie: is there a possibility it'll get their attention like normal language like strategic patience will not? jake: i think the statement you saw from secretary mattis today where he described the sheer capability the united states has to deal with north korea, that will get the chinese attention as much as what donald trump says. charlie: interesting you said get the chinese' attention rather than the north koreans. jake: more so, yes. charlie: you think it was directed to the chinese rather than the north koreans? jake: i think it was directed at both. i think secretary 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 the chinese to understand that in the absence of china taking decisive action right now we could end up in a military conflict. the problem when you go the extra step that trump goes and you start hurling around threats and insults, that actually could provoke the north koreans. that is dangerous, because they don't know how to interpret that. from my perspective better to have strong words -- charlie: to do something like launching an attack of some kind. jake: potentially against south korea that puts us off to the races. charlie: to defend south korea. jake: right. charlie: when you look at the chinese today, the obama administration had a policy which was called shift the attention to pivot was the word that was used. shift the attention to china, latin america, asia. did that ever get, ever happen? jake: in important ways it did happen. i'll give you a couple examples. there is a group of leaders in

the asia pacific called the east asia summit. and before president obama came into office, the united states was not part of that. this is the premier economic and political security forum in asia and the united states didn't have a seat at the table. the indians were there, japanese were there, all of the southeast asian countries, even australia. america wasn't there. president obama, secretary clinton ended up putting us there. we are now at the center of major institutions in asia. that's one. two, we have engaged in a forced shift in the amount of military posture we've built up in asia as compared to the rest of the world. charlie: to say what to china? jake: not just to china but the entire region the united states is going to enforce a rules based order, that there is freedom navigation in the south china sea. people hear about the south china sea and think it is a far away place. a third of the world's merchant tonnage goes through the china sea. if china decided to shut it down, that would have dramatic

consequences to the united states. presence sayat our is we are going to make sure the sea lanes are open. we are going to make sure our allies are strong. we are going to make sure no country can dominate other countries and be adverse to our interests in doing so. charlie: what do you think the chinese want? jake: ultimately, the chinese would like to be the preeminent power in the asia pacific. their notion of what that looks like is quite different from the american notion. the united states for all of our faults -- charlie: you can also argue they were the preeminent power at some point in the long history of china. jake: yes, but, of course with technology, force projection, economic interdependence what that means today compared with centuries ago is dramatically different. and what chinese dominance in asia looks like compared with

american leadership in asia is quite stark. you know, the united states had failures and flaws in its foreign policy, but one positive has been the notion that we believe we can advance our national interests and also help other countries advance theirs as well. charlie: not a zero sum game. jake: exactly. it is positive sum. the chinese use the phrase win-win, but for them it really means we both win if you get out of our way. so i think the region would be worse off without a strong -- charlie: do you believe china wants to be the dominant power in the world? and believes it has sufficient economic power it should have a bigger voice than it does? jake: i definitely think that, and i think they're right. i think the chinese deserve -- charlie: as an economic power? jake: to be at the table and have a larger voice in the decisions for example in the management of the international monetary fund. the fact that they haven't gotten that yet is -- charlie: shouldn't we be helping them get that? jake: it was a policy of the obama administration to help them get it and congress stood in the way. i absolutely believe that it should. that being said, with that extra

step of china having more of a voice at the table, having more capacity to shape decisions, and be a player, comes responsibility. the chinese for a long time have played a selective stake holder role. something of a free rider. they follow the rules they like and don't follow those they don't like. along with a greater voice and vote, they should be also taking on more responsibility to do their part to uphold the basic rules of the international economy. charlie: they've been told as you remember that they have to decide whether they want to be a stakeholder and act like a stakeholder in regards to conduct of their affairs. jake: right. charlie: when you look at russia today, what do you think putin's ambition is? jake: as i was saying earlier in the context of the campaign in talking about why he intervened in the united states, i think putin's number one ambition is to stay in power. his second -- charlie: is he at risk of losing power? jake: so, putin for a long time had a basic bargain with his

people which was, i will rule like an authoritarian and enrich all of my friends, but i will also help you do better economically. that is no longer happening for the average russian family. charlie: because they're energy dependent? jake: and they haven't modernized their economy in any way. oil, the oil prices went from a high in the 120's when russia was doing real well, now down to less than half of that. the long-term future doesn't look very bright for that. so, he made a second bargain with them, which is keep me in power. let me enrich all of my friends and your living standards won't go up, but i'll restore glory to russia. you'll feel better about yourself. that was the intervention in the ukraine, the intervention in syria. i believe that, too, will wear off, because the russian people are going to get tired of sending their people to go fight in other places. charlie: it is undeniable they are a leading player in terms of what happens in syria. jake: they are absolutely a critical player in terms of what is happening in syria. charlie: because they went there in support at the invitation of

assad. jake: and because they were prepared to set aside any sense of basic human decency. charlie: in terms of the plight of the syrian people. jake: to carry out and support a campaign of mass slaughter. charlie: has that changed since trump became president? jake: which part? charlie: russia's policy with respect to syria. even though they have an agreement now? jake: in fact, i would argue russia believes at this point it can achieve all of its objectives in syria, essentially ensure assad is in power for the indefinite future. that it will protect its own military position in the country. charlie: some i know will argue they don't care whether assad is in power. they just want to make sure there is stability, because what putin fears most of all is instability. jake: having dealt with the russians directly for years on the syria question when i was in government, i heard them saying repeatedly we don't care about the future of the syrian crisis. however, their actions have always suggested that defending

this regime, because they see no alternative to this regime, assad at the top -- charlie: will it be acceptable to the united states? jake: that would be acceptable to them, they see no alternative acceptable to them, other than assad. they don't see someone they could bring in as a replacement that could hold the country together and protect their interests. even though, in theory, they're not wedded to assad, in practice, they have been joined at the hip with him, and they have basically defended his prerogative all the way through. and i believe will continue to do so. i think the deals they are currently cutting are setting them up for success for themselves for russia. at the expense of the syrian sunni community which is the majority in syria and long-term regional stability, because it is not going to deal with the underlying problem of violent extremists. charlie: do you think they want to be a european power? jake: number one, putin wants to do something he said publicly. he would like to reconstitute the sphere of influence that was the soviet union without necessarily fully taking over those countries except in cases

like -- charlie: if you talk to him he'll tell you about all the number of russian speaking people behind the borders of countries that used to be part of the russian -- jake: but he is perfectly prepared as we saw in georgia and ukraine to use military force to advance this objective. that means central asia. it means the caucuses, armenia, georgia, and eastern europe. it means members of nato who he believes rightly belong in the russian sphere of influence. and i have to say, he has done a very good job of kicking up dust about nato expansion. saying, you made me do this. charlie: you threatened to go and make georgia and then ukraine a member of nato. jake: or even less than that you added the baltics. charlie: was it a mistake to expand nato? jake: no. if we hadn't expanded nato to the baltics and just play out the reverse counterfactual -- charlie: there would be no restraint for him. jake: or to poland or to hungary, what would be happening right now or over the last 20 years had we not done that? you can see his aggressive

tendencies toward countries that do not have nato membership. i believe the fact of the article five guarantee to these countries is what keeps stability and avoids war in the peninsula, and the idea that somehow this has made him do it is a new argument. he didn't make this argument in 2005 or 2010. he started making it when he came back -- charlie: the russians have always had a great concern about their border and their d.n.a. after hitler and napoleon, there was always a sense of there are threats coming across. jake: right. in the obama administration, we dealt with this issue of the missile defense system which we were setting up to deal with iran, but they felt we were setting up to deal with them. i don't deny that. charlie: which is an interesting question. how difficult is it in these kinds of negotiations, having dealt with the iranians very closely, to speak to the fears of the person across from you, and make sure they know you understand their fear? jake: it is an incredibly good question, because i think what most people don't understand is that a huge amount of diplomacy is just trying to get on the same page.

a common picture of what is going on. what kind of threat you represent. what kind of opportunity you represent. and that means hours, days, we would spend with the iranians trying to explain to them that we weren't trying to engage in regime change, that we weren't there just to try to topple them, that we legitimately believed and did not think it was a pretext that they were seeking nuclear weapons. charlie: if in fact we could convince the leader of north korea that we 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 could make him believe that, would he be less enthusiastic, because he would not look at

what happened in libya and in other places that he sees as a reason for having nuclear weapons? jake: it is an interesting tie between iran and north korea today in answering this question. no matter how many times we tell him, we don't want to change, topple you, we're not trying to take over north korea, what he 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 new --. charlie: it is not mattis, not the secretary of state, not the president. jake: what i think, an unsophisticated observer of the american politics, someone who doesn't look at it closely, could pick up a body language that says, "yeah, yeah. they cut a deal on iran but we don't think we have to abide by that and we'd like to get rid of the ayatolla."

to pick that up and if you are kim jong un sitting there right now and that is basically the policy direction of the united states, why would you ever believe when someone comes to you and says we want to cut a deal on your nuclear program that that's on the up and up? charlie: do you think there will be a regime change in iran, that the present theocracy will be -- we all know there are a lot of moderates in iran. jake: yeah. charlie: a million went into the streets after the election. jake: i think the current set up in iran where the will of the people is consistently suppressed, where the rights not just of minorities but the majority of iranians are abused, is not sustainable over the long term. i think democratic change from iran has to come from within. charlie: the same thing about the chinese? can you put the same test on the chinese, it is not sustainable over the long term? their fear is something will happen which would take away the power of the party to control the state. jake: right. and xi jingping is heading into this 19th party congress at the end of the year with this notion in mind. the number one thing he has to worry about is maintaining party control and putting his own

personal stamp on that. in the 1990's, we made a bet when we brought chinese into the wto. our bet was over time as they liberalize economically they'll have to liberalize politically. that was the bet, the proposition that underpinned a bipartisan view of china at that time. it's been more than 20 years. that has not happened yet. do i think the laws of physics continue to suggest the trends in that direction? probably, but i don't think anyone can say with confidence today that there is inevitably going to be a change in the system of government in china, because they have defied expectations for a very long time. charlie: do you see any weaknesses in that government, that might make them less of a power than we imagined them to be? jake: china faces huge internal contradiction. pollution --nd

jake: dramatic internal contradictions related to the aging of their population, the urban/rural divide. the fact there is still rampant corruption. the fact that as chinese people become middle class their expectations go up and their demand to be treated fairly and efficiently and justly goes up as well, and this system may not be able to keep up with that. there are a lot of arguments one can make. charlie: there is an advantage as people become part of the middle class, and it provides a market so the economy can grow. that is exactly as you know much better than i do how they've turned the economy around. rather than let's not export stuff, let's sell stuff to our own people who can now afford it.

jake: unfortunately and the chinese may be able to navigate this turn effectively, it is very difficult to go from a state-owned enterprise, corrupt system to one that is sort of a genuinely free market model without going through some massive economic turmoil. charlie: do they still demand that our tech companies that come in give up some trade research, trade secrets? jake: 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 is not the case that every american firm going over there has to hand over the keys at the beginning, but the chinese have become very sophisticated at being able to extract the learning and knowledge from american companies not just tech firms but across sectors. that has given them really profound advantages both in the commercial space and in the military space. ♪ ♪

track your pack. set a curfew, or two. make dinner-time device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. introducing xfinity xfi. amazing speed, coverage and control. change the way you wifi. xfinity. the future of awesome.

♪ charlie: how and where will history judge the obama administration severely? jake: i think the area where we were least able to have an impact where we probably could have was in syria. charlie: doing more earlier? jake: doing more earlier. now, i would actually argue we'd had to do it at both ends. there was a huge gap between our means and our objectives. we said assad must go and then we really weren't prepared to do much to make that happen. there was this yawning gap. charlie: then there was isis. jake: to close the gap from my perspective, we had to both increase the means, the degree to which we were engaged to try and shape circumstances there 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. charlie: and coming in earlier would have meant what? jake: for one thing, early on in

the conflict the opposition had much more battlefield momentum. they controlled larger portions of country. the russians were not yet fully engaged. the iranians and all their proxies were not fully engaged. the choices facing both assad and his backers were sharper in those early days. totteringell, he was for a time. jake: right. so it would have meant at that point trying to get a diplomatic process going. the end result of which would have been a transition from power but would not have made -- charlie: talking about terrorism, even after we overrun and retake mosul, there will be ii or an isis squared or something.

what do you think the future of terrorism is? because there has to be a concern, people thinking about the future. jake: it starts with understanding exactly what the problem is. as you were just saying. there are 25 million sunnies who live between baghdad and damascus. two iranian dominated capitals. they feel disconnected from their countries, disempowered economically, and have been subject to this relentless vitriolic jihadist ideology for the last 15 years. we knock them out of mosul, out of raqqa, and they scatter to the winds, but they are going to reconstitute because of those factors unless we figure out a way to get the iraqi government and a syrian political solution to give them some hope for the future. i believe that is more possible on the iraq side right now. that if prime minister abadi wins the next election, he has shown his willingness to reach out and deal with the sunni population in iraq. i am much more concerned about the future of syria. i think what we are doing right now is only focusing on raqqa and sort of leaving the russians and assad to do what they want to do and the net result of that -- charlie: in terms of the civil war.

jake: the civil war, safe zones, etcetera. i think the net result is going to be the re-emergence of a jihadist force inside syria. that is why we cannot simplify the isis in raqqa. we have to think about syria diplomacy as a part of our counterterrorism strategy. charlie: you said two things that interest me in terms of what you have said. you say a lot of things that are interesting to me and i quote you. "my core principle is the fundamental project of american foreign policy over the next two decades is to secure and sustain american global leadership, because i deeply believe a world america leads is a world where everybody ends up better off. certainly where u.s. interests and values are protected, but where the interests and values of our friends across the world are also protected. for me, that's the cornerstone." my question is, are we losing that leadership and that respect around the world? jake: it's hard to answer that question other than to say, yes we are. charlie: and you measure that by the reaction of g20 when we got out of the paris accord.

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

north korea to the exclusion of the rest of the world. charlie: the nature of being president. jake: or the rest of the region particularly as consequential as the asia pacific. right now, chinese and indian forces are a hundred yards away from each other pointing guns at each other. the possibility of these two major economies going to war would have dramatic impact on us. we are not paying attention to that. the chinese are continuing to expand their influence in the south china sea which is a strategic waterway for the united states. we are not paying attention to that. i think you can see in a lot of different places where we aren't leading. i will say this about american leadership, because i think this is very important. while i believe the united states must continue to lead a rules based global order, i also believe that we have to think about that leadership in a different way. it doesn't mean we call all of the shots. it doesn't mean we absorb all of the costs. what it means is that we build coalitions to solve the big problems that we face, that no country can solve on their own, 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 parts of the conversation together, at solving the core problem that america faces, which is how are we going to have an economy that works for everyone? if we can solve that problem through more principled, effective global leadership then we will have really delivered not just for our people. delivered ahave model for everyone. charlie: we do live in an interdependent world. the fundamental question, the touchstone of everything is whether a policy is going to contribute to strengthen the middle class or to hollowing out the middle class. that is the question that i ask more than any other domestic policy. thank you for coming. a pleasure to have you. jake: thank you for having me. charlie: jake sullivan for the hour. thank you for joining us. see you next time. ♪

♪ oliver: welcome to bloomberg businessweek, i'm oliver renick in new york. some of the most dynamic cities across the globe and how they are addressing unique challenges. we will also look at moscow's massive renewal program and how refugees are flowing into the amazon. all that ahead on bloomberg businessweek. ♪