♪ announcer: from our studios in new york, this is "charlie rose." charlie: president trump continues to weather the fallout from charlottesville, virginia. his comments put him at odds with top military business leaders and members of the republican party.

he dismantled two business advisory councils after a series of resignations. he insisted on twitter that it was "sad" to see united states history ripped apart. joining me now is robert costa. he is the moderator of "washington week" on pbs. where do you think this presidency is in the context of the week we have seen? robert: it is another week of upheaval in washington. the president's embrace of these confederate symbols, the statues of the past is his return to his base that he remains an outsider. it comes with moral outrage from democrats and even some republicans. he sees it as part of a broader strategy encouraged by stephen bannon to turn away from political norms that have guided this country for so long and embrace racially-charged politics. charlie: this is from bannon? robert: he has been portrayed as this puppetmaster behind the scenes, but my sources inside the white house tell me this

decision to embrace confederate statues is a decision driven by the president himself, a president who sees his approval ratings shrinking. he sees the legislative agenda stalled. at these crucial moments in the summer of his presidency, he is turning to his base, turning to racial tensions in racial politics that are inflaming our national conversation. charlie: does he have some sense of what he is engendering when he does this? robert: it comes just days after the tragedy in charlottesville. these words from president trump, the barrage of tweets we saw, it shows a recognition by the president -- or lack of recognition about the consequences of handling the presidency in this way in such a fraught time for the country when race is at the floor. many republicans and democrats said on thursday that the president has abandoned the moral authority of the

presidency to take command of the country at times like these. charlie: where are the people around him? let us talk about john kelly. robert: we have a story in thursday's washington post about general kelly.

we spoke to about a dozen people. they say he is trying to bring order to the white house, to have a new process of how information gets to this president, making sure calls are routed through him before they get to president trump. he is struggling to manage the chief. he is reshaping the staff but not the chief. he stood there earlier in the week is the president had this pinball game of the press conference from topic to topic. charlie: what about gary cohn, his economic advisor in the white house? robert: every person close to cohen says he was disgusted by the president's remarks on tuesday. this embrace of both sides when it comes to white nationalists, or neo-nazis. he is a national economic director. he is leading the policy shaping tax reform and infrastructure. a former president of goldman sachs. he has personally been affronted by some of the president's comments. yet, he has not yet resigned. he sees himself as possibly someone who is a new chairman of the federal reserve that slot should open. he is staying there in part because of that and because he sees a chance to change policies. he has not yet met the threshold for stepping down. but he could be close to it.

charlie: and then there was the family. robert: ivanka trump and jared kushner, senior advisors to the president, have been on vacation until thursday. they have returned now to be with president trump. they, too, are alarmed. they were part of the aids which -- theyy suggested the aides who onhe monday urged the president to issue a new statement. jared kushner, ivanka trump, gary cohn so often called moderate influences. no one except president trump dictates what he does. charlie: back to steve bannon. there have been people

projecting he might be -- not only because of whatever advice was giving the president, issues that the president's rhetoric went way too far, but engaging in a fight with national security advisor h.r. mcmaster. some are suggesting his time at the white house is in trouble. robert: he is on thin ice, to say the least. bannon joined the campaign in august 2016. you see him ever since day one in january navigating a white house that never really saw him as a natural fit. he has always clashed with jared kushner. kushner sees the world as an internationalist, someone who is ok with international institutions and alliances. he wants to see the president move in a more moderate direction. and it has been against that. he has been one of the lone voices in the wake of charlottesville saying, let the president go out there and fight the media. let him go and say there are all sides of the argument. charlie: where is the republican party?

you see bob corker, and the speaker saying how intense he was about what happens in charlottesville and the idea of white supremacist and neo-nazis and others being given a voice and some say emboldened. does the party have any influence? robert: the party is facing its own crossroads. do they desert trump or not? they have a september that will be an immense challenge. they face a debt ceiling, a budget. they have to find a way to get a border wall funded. that is one of the president's main priorities. tax reform, infrastructure, they have to find out how they tackle all these issues. do they abandon the president and hope for the best in 2020 or no? they have to think that despite the fact of how the president handled charlottesville, he has

grip over their own voters. they break from him and could face a cost in their own states. charlie: steve bannon said in his interview that the idea of a war against north korea was insane. it would never happen. that is not an option, he says. here's the president talking about fury and fire. and here is bannon saying war is not an option. robert: bannon is part of the more noninterventionist group in the white house. unlike mcmaster, with whom he clashed when it comes to afghanistan, send more troops in the region. bannon is against that kind of hawkish intervention.

what bannon said to the american prospect is the truth that he finds threat private conversations that no one wants to have the blood of one million people on their administration. as much as there is tough talk, no one is moving in a military way toward confrontation with north korea. look at the pentagon. they have not begun to do the things you would expect to see if war was on the horizon imminently. charlie: people were asked this question. is donald trump fit to be president? "fit" means. word behavior, psychological. worries about him in terms of what he might do if he felt like

he was losing support. do you hear the voice among the kinds of people you talk to about where we are at this moment in our history? robert: you hear that even in the white house and the administration. there was a real heartening when they saw general kelly become chief of staff. they hoped he and rex tillerson and jim mattis could be forces that kept to the president in line from having directions on the world stage. when it comes to whether he is fit to be in office, there are certainly many questions being raised by democrats and republicans. what we are watching is the unraveling of the norms that ways to find the american presidency instead of being this moral authority in times of crisis. instead of abiding by the norms, he is turning to his base.

this is so alarming for people who follow history, who follow the presidency, to see the presidency being redefined. charlie: and he takes pleasure in the notion he is doing that because he campaigned to be a different kind of president? robert: he does. i have seen this on the campaign trail when i have interviewed then-candidate trump, many times. he is an instinctive populist who loves to fight, loves controversy. this is the way the presidency in this country is now being governed, by an instinctive, 70-plus-year-old populist. charlie: will he get more intense as the way the president retorts? fromay he has charlottesville. is not becoming more in the mode that general kelly and others had hoped he would be. where disciplines, more on message, more easily not distracted. robert: the question, when does it end.

when i am in the briefing room, this question always comes up. when does he decide to calm down and move in a more moderate or normal direction? be the answer is there will no end as long as trum is president of the united states. i covered him for too long. he relishes the chaos. he sees destruction as power. he talked about american carnage. you see him now embracing the carnage on the american stage. people keep having this wish in the press and on both parties that it will somehow turn away but the fire will be put out. it will not. charlie: they do so much for joining us. we will be right back with dr. henry kissinger. some ideas he think the united states might consider. back in a moment. ♪

♪ charlie: dr. henry kissinger is here. he served under president nixon and ford. he is a recipient of the nobel peace prize. his latest article in the wall is "how tonal

resolve the north korean crisis ." government i remember has been trying to resolve that. how do you do that? dr. kissinger: it is a way to approach it. the point of the article is the major steps of a report -- our foreign policy has been to bring -- threaten north korea with consequences. the other, to ask china to help us. the threat is not fully effective because for the north koreans, they have spent decades of oppressing their people and depriving them to build these weapons. so, they are not going to yield to threats very easily.

charlie: threats of sanctions and the like? dr. kissinger: it is going to take tremendous physical threats even to imagine them yielding to it. on the other hand, china helping us, they are not there to help us. they are there to help themselves. but the point of the article is that we are at a moment when the interests of america and china coincide. we don't want the nuclear weapons in north korea because of many reasons. the threat it might represent to us and others.

the chinese do not want nuclear weapons in korea because if those weapons remain, other countries in asia are sure to build nuclear weapons of their own. like japan, south korea, vietnam, and other entities might be tempted. so then the whole area will be nuclearized and these countries will be in tensions with each other. china will be a great target, even in the united states. if we continue our pressures and if china uses its influence and pressures, they might think it will help north korea. but the nuclearization need to

the end goal. charlie: they came down to mar-a-lago and talked about going light on trade. if they would use their approach with china. was he wrong? dr. kissinger: with the implication that we would help with trade as they helped with china. this looks like a commercial proposition, as if they are in business to extort economic problems. the problem for china would be if north korea gives up nuclear weapons, a gives of the only significant achievement. it might lead to the collapse of the regime or great unrest. it will lead to a period of major judgment.

the chinese need from us how we help north korea after the denuclearization has been achieved. we have not had an adequate discussion of our consequences of our objectives. i believe that with that discussion, a joint policy with china could make much greater progress. charlie: general mathis and secretary of states have set we do not want to change the regime.

we just want them not to use nuclear weapons. there is no threats from the united states. dr. kissinger: we don't want to change the regime. but if the regime collapses or disintegrates, we will not mourn it. will be consequences of a disintegrating north korea right at the border of china with the possibility of many refugees. charlie: you are also preoccupied with the idea of a reunification of the koreas, north and south, which would somehow evolved into one more nation in the area who may be opposed to them if the south koreans dominate a unified south korea. dr. kissinger: i think a unified korea is something that may be less dangerous than a divided korea, one of which has nuclear weapons pressing for its objectives. the possible unification of korea should be one of the subjects that will be discussed not only with china but also with south korea and japan. charlie: can you sit down with the chinese as a diplomat and ask them, tell me what your fears are and i will tell you what my fears are?

dr. kissinger: i think the better way would be to send some private emissaries to the chinese and say, here is our notion of the evolution of the region things continue as they are. some military clash by somebody is inevitable on the present course sooner or later. way we can remove the danger is to come to an understanding.

the kind of pressure that will be applied and the political structure that we will recommend to the world to support after it. then to put that forward in some manner. charlie: what do you think the chinese would accept? what kind of proposal? dr. kissinger: this is speculation on my part. i think the chinese would live with the united korea, that it remains part of the american alliance but with limitations in north korea of high-performance weapons and appointment close to the chinese border, put a korea that is otherwise unified.

charlie: and you think it is best to do this behind the scenes with an emissary in private to create conversation? dr. kissinger: there has to be a formal negotiation, but it is helpful if there is enough of a philosophical kind of dialogue so that people understand how the other views the problem and what it is likely to do. charlie: they have had lots of conversations from one administration to the other. george w. bush, barack obama, bill clinton. dr. kissinger: there have been lots of conversations, and i am familiar with many of them.

those conversations are usually why you should help north korea. there has rarely been a formal conversation of the future of northeast asia, probably because for a long time, north korea was considered an integral part of the chinese and the communist world until about one of the most significant events that happened that we couldn't notice. until about three or four years ago, north korea was inside china out of the communist party, not out of the foreign ministry. it was considered an adjunct to chinese policy. i think it is only in the last few years that the chinese leadership has begun to understand that the north korea nuclear program is not something that is likely to fail. it is growing strong enough to

affect the balance in asia. charlie: it can be effective within a year, the recent estimates suggest. dr. kissinger: i think speed has surprised everybody. the conduct of the north korean government, assassinating the half-brother of the leader at a malaysian airport. spreading poison. many similar things -- charlie: in fact, killing some of his father's advisors. dr. kissinger: yes. five of the six pallbearers at his father's funeral have disappeared.

charlie: five of the six pallbearers? doster kissinger: -- dr. kissinger: five of them. and one of them, the uncle that helped put them in office, was publicly disgraced and was executed. so it is another regime where you don't want to have nuclear weapons. the key point is many people would say, what we just accept it. because we have lived through the chinese. charlie: yes, they do. and the pakistanis and others. dr. kissinger: yes. but here is a country that has proliferated its nuclear weapons already. they have made some of the nuclear materials available to syria several years ago, and they gave some of their engines to iran. this is a proliferating regime.

charlie: as i understand, did south korea, japan, china -- should they be brought together in this? should this become proficient that takes place with anyone who has an interest in the region? dr. kissinger: yes. i believe an initial conversation with china is probably the best way to proceed informal or conceptual. we can tell each other as honestly as we dare. and why this is important for the peace and security of mankind. it is the question of bringing down a regime.

it is a question of producing a world in which the use of nuclear weapons will become conventional -- or could become conventional in the catastrophic impact of so many nations. therefore, the ideal would be if

north korea could be induced with significant pressures to give up its program. if not, maybe a sharp reduction capacities. i am not happy with the breeze idea because the freeze really maintains the present situation. the north koreans are looking with brutal insistence in the face of the condemnation of the security council and of the opposition of china and the united states. we will be shaken badly. charlie: does a preemptive attack to prevent them from having a nuclear weapon capable of delivering to the united states have so much cost that it is unacceptable as an alternative? that is exactly what we said to the iranians. it is unacceptable for them to

have nuclear weapons. that is what we are saying to the north koreans. dr. kissinger: yes. that have been of the view we did not hear from the iranians or get from the iranians enough from the agreement that we did. that agreement at least delayed the event of their nuclear capacity and it was positive from that point of view. rightle freeze agreement after they have launched an intercontinental test would legitimize all of their efforts. it would keep them in the same capacity, and not make any wegress towards what really know needs to be done. because if this nuclear threat continues, the nuclear

proliferation continues in the nation, and if we cannot control iseven in a country that really condemned by most of and by most of the established countries, then we have lost any control of other programs that exist or may spring up. charlie: do you consider kim jong-un a rational leader? dr. kissinger: he was at a prep school in switzerland. there were all kinds of reports of how normally he behaved. the korean regime has maintained itself by practicing a degree of terror that is unprecedented even among many of the dictatorships.

every house has a radio, which they cannot shut off so the regime talks permanently to the subjects. they have a system of concentration camps and of human abuse that is extraordinary. they have kidnapped at least 100 japanese because they needed teachers of the japanese language and they have achieved a degree of brainwashing their population so that some of the refugees from there find it hard to adjust to the free countries. charlie: that the escape to. charlie: is that of equal mine, a rational mind, or both? dr. kissinger: it is of necessity. it is all beyond human experience that one would say it

is substantially irrational. charlie: does a president who talks about fire and fury continue to reflect that? dr. kissinger: all of us who practice diplomacy would have chosen different language. on the other hand, we would have said to give a very sharp warning to north korea that they are playing with fire when they threaten the united states. and when they say the only use of the icbm that they contemplate is against the united states and when they talk of dropping missiles around guam, i understand that a president wants to issue a very sharp warning that things could get out of control.

the dilemma of nuclear weapons is to make such a threat credible you have to show you are going to the edge of what a rational calculation would be. i would not have recommended that language, but i would have recommended an effort like this. ♪

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♪ charlie: what is your assessment of china today in terms of xi jinping on the eve of another chinese party congress coming up in october and november in terms of his leadership and his global vision?

dr. kissinger: china has two huge challenges. they are a country with thousands of years of history and, therefore, there is a sense of continuity unique among the countries of the world. they now have to undergo a significant reform program for their own economic necessities. the reform program, to some extent, should order some of the major reforms that we have made in the last generation. it should attack them of the institutions, especially in the economic field and in the economic practices. that is a huge challenge.

to this, they would prefer not to have to have an international crisis. they know a confrontation with the united states would zap so many resources, that their economic dreams could not be realized. on the other hand, in this thousands of years of history, they have thought of themselves as a country whose majestic concept and skill of activities was symbolic for major parts of the world and they consider themselves as a kind of center kingdom. they have to find their international place in the world in which for the first time in their history is equaled by at least the united states. there are no longer alone, no matter how great their effort.

how you create an international system, the concept of international system in a society that historically has thought itself unique. the chinese did not have a foreign ministry until the end of the 19th century. the foreign policy as we know it was conducted by something called the ministry of rituals that classified each country by the decree of its dependency on china. so china has reformed its economic system and deal with the concept of international order in which they can play some of the historic role.

but not a central role exclusively that they had before. they are face to face with another country, namely us, which also thinks of itself as exceptional. what we do it more on a missionary basis and they do it more on a performance basis. to have a dialogue over the years with the american president and the chinese president has a certain frustration. the american president thinks the normal position of the world is the stability and if it is a problem. you fix that problem and the solution returns. the chinese president thinks the solution of any problem is an admissions ticket for another problem.

therefore, the chinese president is thinking of a process. and the american president is thinking of a deal. the american president negotiates for what brought him into the conference room. good intentions. even with good intentions, it is hard. charlie: having known all of them from xi and mao, how does he compare to previous leaders of china? in vision and reform and

capacity to have his way? dr. kissinger: first of all, he was in a different period. each leader you mentioned represented one face of mao-unified china. overcoming the effects of tiananmen and making it part of the international system to try to bring some quiet to a period of turmoil. this is a man who is moving toward a position to see if he

succeeds will be comparable to mao. charlie: if you moved to where he wants to go, he will be compared to mao in terms of his influence on society? dr. kissinger: yes, because he is trying to make the society that he inherited after decades of turmoil and put it on a basis of what he calls the two dreams. the first stream goes into effect through soon in 2021 when china reaches a level of the poorer european countries. the second one is at the hundredth anniversary of the founding of the people's republic in 2049, china by his vision will be at least as strong as the strongest other nation in the world. charlie: therefore, why doesn't he want to do all he can to make sure north korea is not a disruptive factor in the region?

dr. kissinger: i believe this is his intention. this is his goal. i believe he would reason that way, that they could be a leader in the region. they cannot do everything and particularly at the same moment, he is now facing the 19th party conference, which is an event that occurs every five years. it represents some degree of legitimization and leadership changes. there will be almost certainly significant leadership changes that will occur in the next two to three months. charlie: they will select a new premier? and who is on the standing committee? dr. kissinger: the standing committee is so organized that five of the seven members have to retire because of age limitations. charlie: there is talk -- dr. kissinger: some of them

might be able to stay, but that would be such an unusual event that it would signify a rising influence for that exception. but anyway, that is what he seems to have to deal with. in my experience, he is extremely thoughtful but also extremely strong. he was one of the victims, he and his father, of the cultural revolution. they had to live in a cave for many years. the cultural revolution victims came through it hardened. he is formidable. but i believe that he is trying to find a notion of a peaceful world that is compatible with chinese values and compatible with coexistence with the united states. it will be a tough road.

charlie: at the same time, assuming leadership as a global role and in terms of other places. dr. kissinger: he made a speech last year, which was a sketch of world order that on the economic

side was quite compatible with a route-based system. charlie: that was a time in which populism was red hot in the notion was who would step forward to defend globalization and globalism? dr. kissinger: ironically, it was china that started the communist state. charlie: one thing that ever changed is the believe in the supremacy of the communist party. dr. kissinger: absolutely. charlie: you have been part of the conversation in america for a long time. are you more worried about the country today than you have ever been? not only because of domestic issues and our president, but the world he lives in.

dr. kissinger: no, i am worried because in over half a century now that i have been some way participating in, i have never seen a situation in which the united states had an opportunity for world order, but i have also not participated in a situation in which a country seemed so divided and so unable to find a common thread. charlie: on one hand, there is enormous opportunity for the u.s. to use it superior economy, technology, universities, range of issues --

dr. kissinger: and to contribute. what we really need in the world today is the idea of peace and world order, which dominated the previous centuries. it is being undermined by a succession of a people. a leadership in the direction of such a goal would give the united states extraordinary opportunities and is quite compatible and expressive of our history and of our values. charlie: based on what you know of this president, is he capable of that leadership? dr. kissinger: i used to say i am hoping for an augustinian moment. saint augustine, in his early life, followed a pattern that was quite incompatible with later on, when he had a vision and rose to sainthood. don't expect the president to become that, that is an conceivable. when you realize the peace of

the world and the future of the world depends on you now so that much of what is here today falls away, i think that is a unique aspect of the american presidency. charlie: is this president losing the opportunity as a cause of his behavior? dr. kissinger: there are things that happens that i didn't like, but i have not ever joined this because i have seen what happens when a president collapses. i still hope we will do the things that need to be done and i think can be done, some of which nothing that has been done in korea precludes an anyway what i have indicated as a desirable -- no, i think it is possible that what i have described can be done with an existing framework of policy. charlie: are we at a moment in

which a new world order will be built? is this because of changes that have happened in the past five years? are we looking at a moment we we

demand for the creation of a new world order because of changes in the geopolitics of the world? dr. kissinger: people may not even know yet what they want in a clear enough way. the leader of this country can bring it to other countries. my thought process, they can produce it. many centuries ago, in the 17th century, europe armed 70% of its population with conventional weapons. and after 30 years with establishing the principles of sovereignty and self-determination and so forth. now imagine when it started -- at the end of the 30-year period. so our art will be to try to create or participate in a new

world order. and that is not just america alone that can do it, but we can play a defensive role. charlie: and we have enough respect and power to do it because of our history and what we did after world war ii, because of the role we have played since world war ii. there is still that opportunity

for america. by being the one country that that's out of the paris accord, fighting the country that goes to the g20 and is hesitant to endorse article five, all of those things. dr. kissinger: yes, an attempt to move in the direction i described. charlie: are you optimistic? dr. kissinger: i'm hopeful. i think we have a grave problem but i think we can overcome it. charlie: thank you for coming. a pleasure to have you. see you next time. ♪

♪ oliver: welcome to "bloomberg businessweek" i'm oliver renick. in this week's special double-issue on cities, why there is an overflow of bicycles in beijing, a parking lot experiment in san francisco, and mapping the underground of new york city. all of that ahead on "bloomberg businessweek" ♪ oliver: we are here with "bloomberg businessweek" editor-in-chief megan murphy. megan, let's talk about the story in japan. the