charges of racism and much angst that the democratic party was being split apart, but that was so four years ago. thank you so much for watching "state of the union." a special thank you to all the folks here at university of south carolina's cooper library for hosting us this morning. you can find today's interviews as well as naltsz, web exclusives, and much more at our website, cnn.com/sotu. up next for our viewers here in the united states, fareed zakaria "gps." this is "gps" the global public square. welcome to all of you in the united states and around the world. i'm fareed zakaria. we've got a great show for you today. first up, private equity. the words are on everyone's lips thanks so mitt romney. we'll sit down with one of the inventors of private equity, the co-found other of the legendary

carlyle group, david rubenstein. then i have a lot to talk about with an all-star panel. arianna huffington, mort zuckerman on the gop race, the economy, the euro, iran, all kinds of things. next up, what do the shipyard in tahrir square have in common? a lot. i'll explain. first, here's my take. i spent the last few weeks working on an essay for "time magazine" on barack obama's foreign policy, and in association with that piece, i interviewed the president last wednesday in the oval office. let me give you a few of my thoughts and impressions. obama seemed relaxed, calm, confident. i asked him about mitt romney's attacks on him as indecisive, timid, and nuanced. i don't quite know why being nuanced is a bad thing, but that is what romney said. obama responded that romney and the rest of the republican field are going to be playing to their base until the primary season is over. after that, he said, he looked forward to having a foreign policy debate. overall, i think it's going to

be pretty hard to argue that we have not executed a strategy over the last three years that has put america in a stronger position than it was when i came into office, he said. i think obama has good reasons to be confident on this front. he ended the oval office with the united states deeply unpopular around the world with vast commitments in iraq and afghanistan, difficult relations with many countries, and a large part of the world feeling it had been ignored by an america obsesseded by the war on terror. obama was determined to pair down america's commitments, its military footprint, and regain trust and goodwill abroad. for the most part he succeeded. there were 140,000 troops in iraq when he came into office. there are zero now. he added troops in afghanistan, but there, too, a draw down has begun. he scaled back the nation building aspect of american interventions, but ferociously embraced and expanded the counterterrorism angle, fighting al qaeda, and other terrorist

groups. obama ordered more drone attacks in the first two years of his presidency than george w. bush did in his entire two terms, eight years. and the results have been note worth where i. most of al qaeda's senior leadership has been killed. the strategy's crowning success was, of course, the killing of obama. if the war against al qaeda is the most visible and dramatic success story, the most significant long-term success might be where obama has pivoted. it's the new arena of global wealth, power, and politics, and obama decided to expand american presence in the region with a flurry of diplomatic, political, and military moves over the last six months. he did so carefully and skillfully so that he was seen by asian countries as a response to their request rather than a unilateral assertion of american power. when historians write about an obama doctrine, they might point to his new asia strategy, his declaration that america is a

pacific power and we're here to stay. all in all, it's a pretty strong record, which is why you actually don't hear republicans talking much about foreign policy on the campaign trail these days. for more on all this, you can read my cover essay in this week's "time magazine" and the interview or go to time.com for the complete interview. let's get started. lootsing, that is what newt gingrich says private equity is all about, but raerch take his word for it, i wanted to go to the top. my next guest is a pioneer of private equity, the term didn't exist before david ruben stein and his partners founded the carlyle group. by some estimates it's the largest private equity firm in the world. the companies in their portfolio have revenues of approximately $100 billion. if ruben stein's name sounds

familiar, he was in the news this week for donating $7.5 million to fix the washington monument. welcome, david. >> my pleasure. >> do you understand the attacks that people are making about private equity, about mitt romney? the basic argument, as i understand it, goes private equity companies buy these companies, load them up with debt, fire lots of workers, pined some low cost place to do the same thing, and that's how they make money, and it's terrible for american workers. >> well, i think that's unfortunate buzz that's not the reality. the reality is this. private equity firms are very good at buying companies, improving them, strengthening them, and increasing employment and doing a fwood job for the investors, most of whom are public pension funds, fireworkers, place am, teachers. they're the beneficiaries. >> do you think that the basic model that people look at is wrong then that they say these private equity companies come and when you buy a company, how

do you stren strengthen it? what is the magic that makes you able to grow the company other than firing workers and, therefore, reducing costs? >> firing workers is rarely something that's actually done. the private equity statistic shows when you hire more workers, you actually make more money, so in the end private equity firms are trying to hire more workers and make the companies bigger than they were when they made the original investment. that's what the statistics show. when you hire more people and you make more products or more services than you sell, you actually make more money, and that's good for the investors. actually, what private equity does is this. somebody like my firm will buy a company. we are insented to do well. we are perfectly in line with our investors who put up the bulk of the money, though we inve as well. the people, the ceos running the company, they get a large peterson of the profits as well. typically we do this in a private sect where. we don't have to worry about public reporting for a long time. the company's ceo can worry about making the company more efficient over a four to six-year period of time. what statistics show over a

ten-year, 20 year, and 30-year period of time if you invest with a good private equity firm, you are much likely to get a higher rate of return than anything else can you invest with. we're not doing anything that's unmanageable. we're insenting the ceos and workers to be aligned with the investors to make the companies grow. >> what do you think of bain capital and the stories you hear about it in the context of this campaign? >> well, it's disappointing if you are in an industry that is actually adding value, creating jobs, making america more efficient in many ways and more effective in many ways. private equity is dominated by the united states companies. the largest private equity firms are here. many people around the world are looking to us to how we do private -- how they should do private equity there. in fact, the chinese, for example, they very much want to importure private equity statistics and because the statistics show we are good at what we do, and they want these skills and these know-how that we have here. why is it that the chinese are so interested in learning what

we do in private equity? because they want to make their companies more effective, efficient, and strengthen employment as well. i don't think what happened to bain in terms of criticism is really that fair. they may have done some things i don't know about years ago that aren't the practice of today. remember, much of what mitt romney did happened 20 years ago or more, and the practice of the industry has evolved. >> the other part about private equity that people worry about or are kind of stunned by is the kind of money you guys make. because there may be an ipo for carlyle, you had to report this, and the three founders of carlyle made $450 million, plus there was returns from your own investments. you made several hundred million dollars last year. do you understand how a lot of americans look at that and say this just isn't fair? >> well, first, i do come from very modest circumstances. my father worked in a post office and never made probably more than $8,000 a year as an employee of the post office, so when people can rise up from very modest circumstances and do

well economically, i think that's a good thing about america, and we should encourage that kind of activity. secondly, i give away about 50% of my income, so my, you know, desire to give back to the country is pretty strong. i plan to give more. i signed a giving pledge with warren buffett and bill gates. i'm giving it away and doing the kinds of things thaw mentioned the other day, the washington monument. third, i don't really set the rules about what income will be and taxes and so forth. if taxes are something people are concerned about, congress should change the taxes in the way of comprehensive tack reform. the money that i make, or my partners make, is perfectly aligned with our investors. if our investors make a lot of money, then we will make money. we typically get 20% of the profits brsh the pension funds that invest with us, do well, yes, we will do well. because we're doing well, i'm fortunate enough to be able to give away the bulk of my money. >> do you know -- you know that there is a proposal that the

bulk of the money you make, which is currently taxed at capital gains rates, which is much lower than income tax rates, that should be changed, that a lot of people who feel that isn't fair, that this is really income, and it should be charged at a higher rate. do you support changing the rate of interest from capital gains to ordinary income? >> there are very few people who actually go to congress and say please tax me higher. maybe there are some. there aren't many. in my case what i would like to do is have congress tackle a tax reform in a comprehensive way. trying to do it peacefully i don't think usually works well. when i work in the white house for president carter, we tried to do comprehensive tax reform and other president advisory done so as well. if up to change that provision, do it in the context of everything else. the tax system we have today is not fair in many ways. i wish it could be improved. when you have 10,000 pages of regulations and nobody can fill out their own tax return, that's not a good thing. i wish we would change it, but

don't blame me for complying with the law. all i'm doing is felling filling out my tax returns -- or my accountants are, and i'm paying what i'm supposed to pay, and i'm giving iing away a significant amount of money, and that probe lowers my tax rate. change the law. don't blame me. i didn't write the law. >> in the context of tax reform, would be comfortable for a danger blsh. >> i can't just pick one change out and say it should be this way or that way. i want to make sure that we have good incentives, though, for doing what we do well in our business. the united states does very well in private equity, and we have a very good economy. the most innovative economy in the world, and i want to make sure we don't do anything in tax reform that will change that. we are the envy of the world still in the way our economy is so innovative and the way we do investments very well. i want to make sure that whatever congress does, it encourages people to do the kind of investing that we do. >> let me ask you about the economy because you're looking at it with all these companies that you own and hundred billion dollars in revenue, and this is one of the largest kompgss in the world really if you were to

count it that way. do you get the feeling that the american economy is bouncing back? >> the american economy is in better shape than people thought it was just six months ago. i expect that this year we'll grow at 3%, maybe 3.5%. europe will probably be flat to negative, so the united states economy, while we have too much debt, and i'm very concerned about that. we have $15 trillion of debt, and we're running a $1.3 trillion annual deficit. that has to be addressed, and i hope congress and the president will address that relatively soon and not wait until after the next presidential election to address it. given those debt figures, we are doing reasonably well. i think we would do better if we tackled our debt problem, though. >> let's talk for a second about the stuff that you buy and give away. >> sure. >> you are giving $7.5 million to clean the washington monument. you bought -- >> more than clean it. it's to repair it. it's sustained earthquake damage. yes. >> you bought a copy of the emancipation probleming clamation, and what did you do with it? >> i have bought a number of

historic documents, and i put them on display at places where i think people can see them because i think it's important for people to know about american history. i bought a copy of the magnacarta. i put that on display at the national archives so americans can see the document that inspired the declaration of independence and the constitutional bill of rights. i bought a copy of the emancipation probleming claimation, and i put that on display at the ovl office, and the president is very pleased have it there. i bought a couple copies of the declaration of independence. one is on display at the state department. recently i bought a copy of the 13th amendment that freed slaves, and that will be displayed somewhere else in washington soon. i'm very proud of owning these documents, and making sure that people can see them and learn american history. i'm very concerned that people don't know enough about our history and the rights that we have and the freedom that is we have, and i think americans would learn more about american history, i think, we would be a better country. >> and you buy all these documents. you don't keep any of them at home? >> no. >> if we were -- if one were to go to your house, would there be any document?

>> i don't want to have things in my house because how many people are going to see them? i want the american people to see them. millions of people go to the archives. millions of people going to the smithsonian, and millions of people go to the state department. they're going to see these documents, and that's more important than having them in my house. >> pleasure to have you on wrushs. >> my pleasure. >> a gps roundtable and the stories that caught my eye. the economy, the gop race, iran, and more. stay with us. when you have diabetes...

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there's lots to talk about today. the economy and politics and much more. joining me now arianna huffington is the editor in chief and president of "the huffington post" media group. david frum is a contributing editor for "the daily beast" and "news week." steve rapner left a long career on wall street to be the obama strais's car tsar. he is back in business now, and mort zuckerman never left the business. he is the chairman of boston properties and the editor in chief of u.s. news and world report. welcome to you all.

david, let me start with you. one of the things i have been puzzling over is what happened to the tea party? this was the party -- this was meant to be the thing that was going to totally transform the republican party. it doesn't quite seem to have had that affect. >> well, it's failed to generate an alternative to mitt romney, and it's taking a bad humiliation because of it. i think a lot of the energy has gone out of it, and especially in south carolina. here's something that i think is maybe relevant. senator jim demint, a senator from south carolina, has been a vocal advocate of the tea party. he has been the leading opponent of dredging the harper of charleston. charleston needs a deeper harbor if it's to compete with savannah, where dredging is beginning right now. people of south carolina are saying, wait a minute, this is beginning to interfere are somebody's livelihood. it's one thing to say we refuse all federal dollars for everybody else, but when you are refusing federal dollars here in south carolina, that's a very different story. >> but it's interesting that you have within the republican party

it's almost as though each of these candidates represents one element of the republican party. santorum, the more religious. you know, socially conservative. romney, the traditional businessman. is there a sense that even in the republican party capitalism is on trial, that people are not convinced that being in private equity is such a great thing after all. >> i don't know about that. i think that there is a sense that somewhere in the economy is went south about n a big way, and the business group and particularly the financial world had a larger role in that than in previous times. certainly since the end of world war ii, and there's real validity to that. i don't think that it's -- that -- to my mind what's going to happen, no matter where these people go, ultimately they're going to choose between the republican and a democratic. the democrat happens to be obama, and one thing that will unite the republican party is their hostility to obama. however the primaries play out,

that will be the major residue for the general election. >> what about the economy? i mean, one theory is that the tea party is beginning to wane in influence because it was part of what was fueling it was just this despair and the economic numbers are getting better. >> well, there's no question, and although i think mort might disagree with me a little bit, the economic numbers are getting better. we just had late last week new claims for unemployment insurance down to 352,000, which is the lowest number, i think, since 2008, and every indicator is pointing to a continuation of this modest economic recovery. remember, people's incomes haven't really gone up during this, so there's still a lot of unhappiness. the unemployment rate is still 8.5%, plus or minus at the moment. there's plenty to worry about in the economy. i think that the tea party just simply lost its mojo so to speak. i think it lost its sense of purpose and real direction. >> do you know that people on

the ground do not feel that the economy is getting better. i was speaking at the mayors conference in d.c. on thursday, and you have mayors who are republicans and democrats, and they all feel that they're struggling, that their constituents are struggling, that southwests red cross cut. all this 600,000 public sector jobs that have been cut during obama has been cut in a disproportionate way. when we talk about things improving and the fact that the unemployment gains are down, one of the reasons unemployment claims are down is because about 200,000 people are too discouraged now, most recently, to look for work. >> that's not quite right. the new claims for unemployment work are for people who are laid off and try to get unemployment. it's not discouraged. >> i don't disagree with any of you guys in the sense that these cutbacks have been painful. people generally don't feel great about the economy. they shouldn't. i think if you do look at the

polls, what's also -- what struck me the other day in a poll is that democrats actually by a wide margin think the economy is getting better. republicans by an equal wide margin think it's not getting better, and i think this that will play into the politics. >> mort, just on the economy, housing is at the heart of it. do you think residential house issing bottoming out and beginning to rise? >> i don't think so. prices are still going down. if you measure it by the kay shiler index, or any of the other serious indexes, what what's more, gwen the unemployment numbers, and i'm going to disagree with the unemployment numbers here, because what happens is the 8.5% really measures people who have actively saute job in the last four weeks. since the average period of unemployment is about six and a half months, that just doesn't apply when the average period -- that's a record, by the way. if you measure it by people who have applied in the last six months for a job and people working part-time involuntary, that is a couple days a week when they were working full-time, that number -- this is a government number -- is

15.1%. then if you add to that the people who have left the labor force, you have to add another 2.9% to that. you're talking 18%. we've never seen anything like that. certainly not in my lifetime. >> hold that thought. we will be back to discuss much more with our panel. we'll talk about lots of interesting things -- europe, iran. up next, what in the world? how arab spring nations are looking to a rather surprising source for inspiration. a former communist country. i'll explain. this is an rc robotic claw.

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as egypt, tunisia go from dictatorship to democracy, you would think they would like to america as a model for their new governments, but they don't. america is still too controversial in the arab world. instead, many of the countries transformed by the arab spring are looking in a surprising place for inspiration. where is this new city on a hill? recognize this man landing at the airport in tunis, tunisia? he is the man whose actions 30 years ago in the shipyard in poland helped cause communism to crumble across eastern europe. he was in tunisia to pass on the lessons he had learned.

in fact, poland is a good model for these countries. it's a country that started out with many problems, political and economic, but gradually overcame them. today's arab revolutionaries do want to see house they did it. they're studying the eastern european experience and particularly the polish path, and poland is cooperating in various ways. it has started hosting conferences to share its knowledge. in fact, it uses a u.s.-made computer game to train arab and east european civil servants. it's called sense, or the strategic economic needs and security exercise. sense simulates a virtual country emerging from authority tarn rule. it trains participants to make democratic decision and allocate resources. years after training on it, warsaw is now passing on its own experience to the arab world. poland's political and economic success have given it a sense of confidence and a new profile on

the international stage. it's a member of nato. in fact, it now holds the rotating presidency of the european union. beyond europe, poland has also been one of washington's most loyal allies. poland was among the largest contributors of troops to the war in iraq. perhaps the biggest reason for poverty-stricken region like egypt to pay attention to poland is it's a rare breed in today's world, especially in europe. poland has a strong economy. the sixth biggest in the european union now and the only e.u. country to have avoided a recession altogether. none of the banks needed to be rescued. its economy grew 4% last year and on track to grow 3% in 2012. why, you ask, how did it survive the turm oel in the euro zone? one answer is that it has strong domestic demand and has been pouring money into infrastructure products, but the real reason is that poland has yet to be allowed into the euro

zone. it continues to use lotis instead of the euro. unlike greece or italy, it was able to devalue its currency to stay competitive. the irony is warsaw continues to see its destiny as being tied to the common currency. more than half its exports go to the e.u. a majority of it to germany. its main trading partner. being part of the same currency would encourage foreign direct investment in poland. it's not just about economics. after yearning for decades to be part of europe, its leaders feel a resurgerient poland could be a full-fledged member of the european community. but perhaps poland should look at england, sweden, and switzerland. all european countries, all with strong economies, but with their own currencies. that might be the model to emulate. in any event, no arab country is likely to give up its currency

any time soon no matter what poland will do. we'll be right back. next, back to our panel, arianna huffington, mortimer zucker man, david frum. steve. and your mood is on its way down. you might not just be getting older. you might have a treatable condition called low testosterone or low t. millions of men, forty-five or older, may have low t. so talk to your doctor about low t. hey, michael! [ male announcer ] and step out of the shadows. hi! how are you? [ male announcer ] learn more at isitlowt.com. [ laughs ] hey!

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breaking news at this hour. joe paterno, the long-time and legendary former coach of the penn state football team has died. he was 85 years old. we learned this in a statement from the family which said, in part, he, meaning joe paterno, has been many things in his life. a soldier, scholar, mentor, coach, friend and father. to my mother he was and is her soul mate, and the last several weeks have shown the strength of their love. to his children and grandchildren, he is a shining example of how to live a good, decent, and honest life, a standard to which we aspire." joe paterno was the father of five. the grandfather of 17. i want to bring in our susan candiotti. she's on the phone. as i understand are are it, you are right in front of the joe paterno statue on the penn state campus because while he was a father and a grandfather, he was so much more than that. indeed, in that place and to the state. >> that hes what we've been hearing from people who are here at the statue now paying their respects to joe paterno. this iconic statue of him, his

arm sticking up in the air with the number one sign. this is a man who is a legacy on this campus. certainly in the world of college football. people here are right. people are here with tears in their eyes, and the candlelight vigil once they got word that jo pa has been fighting for his life. they said he died as he lived. he fought hashed until the end. >> our susan candiotti. of course, that record of joe paterno's tarnished somewhat by a sex scandal brought on by one of his assistant coach wrfsh we'll see more of this storm on ""reliable sources" "at the top of the hour, but right now back to fareed zakaria "gps." we are back with arianna huffington, david frum, steve ratnor and mort zucker man to talk about everything in the

world. >> simply to present civil unrest and to be able to start growing the economy again. just cutting and trying to sort of get out of the crisis simply through austerity measures isn't going to work for greece, isn't going to work for everyone, and the civil unrest in greece is a major factor that more and more pole tigs, economists are really taking into account in making decisions. >> steve, if greece were to leave the euro, i agree that's a real possibility. they would have a completely nonfunctioning economy. their banking system would disappear. they wouldn't be able to -- they would be forced to make ann arbor more major cuts in the deposit workers and government

programs because they couldn't borrow any money, obviously, and they don't have the tax revenues to cover it. >> they will agree to an austerity program, and i agree with you totally and the limits of that, and then get the debt holders to agree to take this haircut down, and some level that at least in theory they can do it. fund mrejtsly, the greeks have to decide whether to pull themselves together and get to work because -- >> the problem is -- but there is no work. >> they often don't pay taxes.

>> and with all the cuts that it was asked by the -- >> no, it has not. it has not, arianna. it has done almost nothing. >> it has not led to the revenue prospects that were expected. to change the subject entirely, iran. one of the things the president has done over the last few weeks has been to rachet up the pressure on iran. for the first time that i have ever heard benjamin netanyahu says the sakes are work, the iranians are wobbly. do you think that, a, this is likely to solve the problem or at least keep the pressure on iran in account of the effective way, and, b, will it change the dynamic where people in this country, particularly many jewish thought that obama was not doing enough to look after israel's security. >> a, i don't know. it's hard to assess what the

impact is on iran. it's a very, very radical government. they are very idealogically driven. nobody can predict what will influence the iranians, because they do have one thing that works for them. it's called oil. that keeps them solvent and keeps them reasonably effective, but the political system is a mystery to a lot of people. >> they're having real trouble on oil. >> the reason the united states has been acting so forcefully against iran and so many other people have been joining us is not because of israel's security. it's because of the security of the gulf. this is a de facto american, israeli, saudi, german alliance in which the stake is not just israel's security. that is why, you know, i think if president obama tries to make this an ethnic point, it will justly backfire on him brsh. >> the price of oil is now $110 a barrel with lower demand in the united states, with demand weakening in china, presumably it's that high because everyone's word.

>> the numbers are pretty simple. iran produces, i'm, about 2.8 million barrel az day. there's about 4 million barrels a day of spare capacity of the whole world, so if you take iran out of the picture, you're operating on a raiser thin margin, and this is our vulnerability as a world to the oil situation. it shows how scared people are, but we have to threat the needle. we have to make this work. we get what we need on the nuclear side, and keep shipping -- and are able to resume shipping the world because the world cannot -- oil prices will go a lot higher if iranian oil is out of the picture. that's the problem. >> i think it's important for us to look at how iran got so powerful, and if we go back to the invasion of iraq, which we consider one of the most disastrous foreign policy

decisions that america has ever made, but we must because i think we're going to make worse decisions if we don't understand the unintended consequences of that one, and any time we discuss iran and the growing power of iran and the growing possibility of dangers from iran and remember that we are partly responsible for that, and we see how iraq -- the iraqi government is getting closer and closer to iran and the dangers of that. >> or the shia government which is no longer a sunni government, which it was before. >> iraq produced for the first time more oil than it did before the first gulf war. iraq is now back as a producer. >> you can wear the costs and benefits, but you can't ignore that there is a benefit. >> we have to close on that. arianna huffington, mort zuckerman, david frum, steve ratner. we have to leaf it there. the most popular politician in the world's most dangerous country. one-on-one with pakistan's imrahm khan. stay with us.

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pakistan is in crisis. perhaps an even deeper crisis than usual. there are rumors of military coos, relationships between slumma bad and washington are at

an all-time low. my next guest is now perhaps the most popular politician in pakistan. imran khan is the legendary former cricket player whose rallies now command crowds in the hundreds of thousands. welcome, imran. >> thank you, fareed. >> tell me, first, what you make of these rumors of coos. there are lots of people in pakistan, as you know, who are talking about how the military is trying to prepare the ground for either a soft coo or outright coo. do you think there is any validity to this. >> >> see, fareed, pakistan has moved on. the media, the independent television channels have changed pack stab. this is no longer the old days where the military could walk in. the level of political awareness in pakistan is such across the board there's consensus that military dictatorship or

military governments are not beyond because now we have a history of military dictatorships, and it's like curing cancer. you have the problem for a while, and then the cancer spreads much more. i don't think there is any chance of a military coo. >> what about the way in which the military is taking on the civilian government where people say that the courts are acting in support of the military? they've -- they're attacking the prime minister there seems to be a kind of concerted effort to weaken the civilian government. >> you know, fareed, the biggest enemy of the government is the government itself. it is the worst government in the history of pakistan. it is the most corrupt, the most incompetent government ever. according to the government survey, the economic survey of

pakistan, which is a government report which is published, never has the situation of pakistanis been as bad as it is today. there's an unprecedented inflation. there is unemployment. there's no gas. there's no electricity. factories are closing down. there's lawlessness. corruption has broken all records. so if the people are turning against the government or if the government feels beleaguered, it's not because of either the army or the supreme court. in fact, people like us think that the supreme court is too soft on the government. remember, this is the only independent supreme court ever in our history, and the way we have an independent chief justice is because people came out in the streets. it was our equivalent to the arab spring where masses came out in support of the chief justice. he was reinstated and then again

kicked out. people rallied behind the chief justice again. what we expected from the chief justice is to check the corruption in high places. in fact, in other words, if people come into government, they start looting the country, you want an independent judiciary to check the corruption. so far the government has stone walled the supreme court. >> tell me about the atmosphere in general in pakistan. it seems as though the problem of a kind of jihady group and terrorist group remains unchenning every checked. the problem of out of control elements within the military remains unchecked. is that picture, you think, accurate? >> when you talk about the jihady groups or extremists, this war on terror is the biggest producer of jihadists and extremists. the longer this war goes, the more polarize the the society is getting. the more he extremism and radicalization that's rising in pakistan. and the way to deal with it is

to somehow get out of this war. the only way out is a political settlement, which, of course, i have been advocate for for a long time and now, of course, the u.s. is trying to have some sort of a political settlement in afghanistan. it's the only way out. you must understand the problem. i mean, the people in the u.s. must understand what's happening here. in the tribal areas there are million armed men. every man is -- knows how to wield a weapon. carries a weapon. there are million armed men there. now, when you do an operation or when the army does an operation and there's collateral damage, what happens? anyone who loses a dear one and they do lose them because there are villages that are being bombed through airplanes, through helicopter gun ships, through artillery. remember then it's not an army they're fighting. these are fighters in villages. when there's collateral damage, the local people then become militants. every military operation has produced more militants.

>> what should the united states do because, as you say, the obama administration has been trying to negotiate with the taliban, but one of the big problems they have had in afghanistan is that the taliban and elements other groups have had these safe havens in north waziristan and so they can always retreat to that sanctuary and, therefore, feel themselves to be invaluable and don't want to compromise and don't want to negotiate and don't want to make any concessions. >> the problem with obama administration is that they are stuck -- they are dealing with the pakistani government which, unfortunately sshgs a discredited government. if they had a partner in pakistan, a political government which was credible, only a credible government not only would be able to pull our army out of the tribal areas where we are stuck, we would be able to help the americans and getting some sort of a peace process going. at the moment there is no help from pakistan. all we are doing is military

operations and we are going nowhere. >> if you were prime minister of pakistan, what's the first thing you would do? >> the first thing i would do is have a cease-fire. you cannot talk and fight at the same time. either you talk or you fight. fighting has failed, so i would go for a political settlement. i would have a cease-fire. i would -- when the people of the tribal areas one million fighters, which i'm talking about, i win them over to my side by saying it's the end of jihad. cease-fire. fighting is over. these tribal area people will not take on the militants as long as they think fear fighting for jihad. if means a foreign occupation. one, it's no longer jihad. they will deliver peace in that area. it's in their interest to have peace. this insanity of pushing this million strong men by bombing collateral damage and pushing them over to the other side,

it's so insane, i don't know who is leading this senseless policy. all 50 parties of pakistan said give peace a chance. it's time for a political dialogue. end of military actions. >> imran khan, always a pleasure to have you on. >> thank you. >> and we will be back. [ monica ] i'm away on a movie shoot and it hasn't been going exactly as planned. cut. cut! [ monica ] i thought we'd be on location for 3 days -- it's been 3 weeks. so i had to pick up some more things. good thing i've got the citi simplicity card. i don't get hit with a fee if i'm late with a payment... which is good because on this job, no! bigger! [ monica ] i may not be home for a while. [ male announcer ] the new citi simplicity card. no late fees. no penalty rate.

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monday is the chinese new year, and we are about to enter the year of the dragon in the chinese zodiac calendar. that brings me to my gps challenge question of the week. which of the following is not one of the animals on the chinese zodiac? is it a, rooster, b, rabbit, c, pig, or d, panda? stay tuned. we'll tell you the correct answer. go to cnn.com/fareed for ten more questions. while you're there, check out the rest of our offerings on global public square. our website. there's always fresh content, insight, and analysis on what's going on around the world. make sure you also follow us on twitter and facebook. please remember, if you miss a show, you can now find full video episodes of "gps" for sale on the itunes tv store. want to make sure you never miss

one again? subscribe and get ten episodes for less than $10. go directly there by typing itunes.com/fareed. this week's book of the week is strategic vision. america and the crisis of global power by zbigniew. the former national security advisor is always insightful with broad and deep observations about history, politics, and culture. this book is no exception. it will make you think and think hard. now for the last look. we all know there are no free lunches, but what about free rides? well, in indonesia thrill seekers and free loaders alike travel on top of transtrains. the authorities have been trying to curb the train surfing scourge for decades. now they seem to have come up with a concrete solution. i mean that literally. they have installed concrete balls about the size of grape struts above the rail tracks. they call them g