thanks for watching. if you miss any part of today's show, you can buy it on itunes. ""fareed zakaria gps"" is next for our viewers near united for our viewers near united states. -- captions by vitac -- www.vitac.com this is gps, the global public square. welcome to all of you around the united states and the world. we have a terrific show for you starting with new york city mayor michael bloomberg, on romney verses obama, on the controversial slashing of soda sizes and on his future plans. "new york times" columnist nicholas kristoff just took a rare journey from one side of iran to the other without government minders to take the pulse of the people. he's here to tell us what he learned. next up, austerity doesn't seem to be working or maybe it

does work. meet the president of a country where austety led to growth. finally, fidel castro on yoga. really. first here is my take. it's hard to find any good economic news these days. europe is teetering on the brink, emerging markets like china, brazil and india are slowing down and the united states is in a slump. let me try to cheer you up. the cost of sequencing a human genome is down to $1,000 and it takes two hours. that is an acceleration of capacity that is faster, much faster than moore's law which says that computing part doubles while costs go down by 50% every 18 months. this is likely to be the beginning of a new technology revolution, one that is already transforming american industry. it's a reminder that as we confront difficulties across the xhik landscape, the one area where america can still move

from strength to strength is science and technology, if make the right decisions. take, for instance, the decision to fund the mapping of the human genome. the federal government funded that project at the cost of a whopping $3.8 billion over a 15-year period. but consider the payback. one study funded by the industry calculates that the human genome project has helped drive $796 billion in economic activity, raised $244 billion in personal income and supported 310,000 jobs in 2010 alone. these numbers might be exaggerated, but the scale of the impact is clear across vast industries like agriculture and medicine and entirely new fields like gene therapy. federal funding on research and development which is a drop in the budget bucket has been in long-term decline, dropping as a percentage of gdp by 54% in physical sciences and 51% in engineering over the period 1970

to 1995. in recent years funding increased sl, but it is now set to continue the long-term decline. this at a moment when countries like china and south korea are increasing their funding by 10% year on year. there is more to encouraging scnce and technology than simply funding. government rules and regulations play a large role. here the dynamic founder of bio come argues the entire american set of regulations,clinical trials and waiting periods are a serious deterrence to drugs and pharmaceuticals more generally. it takes 12 years to get a drug from conception to market while it took six years to get the airbus a-380 from the drawing board to flying in the skies. the science is clear, the economics is clear. as usual the politics is the problem. let's get started.

blooerg was in rio conferenceon sustainable development. he attended adds mayor of new york but chair of a novel organizati called c40, comprised of the mayors of 58 of the world's laernlgest cies who are committed to combating climate change. why this agenda? why mayors leading the charge? the answers are interesting. take a look. >> mayor bloomberg, pleasure to have you on. >> thank you for having me. >> you have set out in your agenda for rio a very ambitious target. you want to get greenhouse gas emissions down maybe one billion tons by 2030. can a network of mayors do this without the cooperation of your national governments? >> well, it would be easier if the national governments did

something, but i think it's fair to say 20 years ago there was this meeting in rio. here it is rio plus 20 and they have done very little. federal governments and even state governments within countries basically have been immobilized by conflicting interest, conflicting views of what science is and the ability to -- the inability to lead. they are immobilized because they don't want to take tough votes and alienate half of the constituency. mayors don't have that luxury. mayors are responsible to the people every single day. the press is there. people can see the results. they hold the mayors accountable. so if you look, all the improvements in education or fighting crime or the environment, the pressure for

change in immigration laws, the pressure to get rid of guns in america or on the streets, these all come from may yors. >> take the issue of greenhouse gas emissions. you've taken a very strong position. you're really trying to move it down. you want new york to have lower and lower greenhouse gas emissions. >> yes. >> you know this is a subject of great controversy in the united states. what do you as a businessman, someone very conscious of not imposing costs on business, why have you decided to go down this road? >> the costs of not doing these things dwarf the cost of doing it. the problem is that people don't think about, oh, you saved my life, and they don't say thank you for that and they don't want to spend any money for the possibility of saving their life unless they're actually facing something. what government should be about is leading from the front and explaining exactly what you pointed out, that some people don't want to spend any money but the truth of the matter is it costs you an awful lot more to not spend the money.

so, for example, in new york city, we've worked very hard to clean up the air in your workplace, in your restaurant. it's called getting rid of smoking. that's the biggest contaminant in those environments. in fact, we've reduced the smoking to virtually zero in confined spaces. because of that, bringing down crime and fewer accidents -- traffic accidents and fewer deaths by fire, new york city's life expectancy is now three years greater than the average in america. just think about that. you've got 8.4 million people living in new york city who on average are going to live three years longer than if they lived on average anyplace else. >> then i have to ask you about the issue most recently that you have taken up with regard to helping people's health and well-being. the super-sized soda drinks. you're a free market businessman. you still think that this is an

area where it is appropriate for the government to place restrictions on private business, to stop people -- >> no, i don't think we should restrict you from drinking full sugared drinks. i do think we have an obligation tonou tt i notod go for yh. an o the ys to explain is we're going to require that restaurants and movie theaters, if you want drink morethan 16 ounces, they sell it to you, but they sell it to you in multiple containers, that no container should be bigger than 16 ounces. >> but you're regulating business. a lot of republicans say this is the nanny state. >> they just say that. you're not cowed by that, not buffaloed by that. let's assume there's a building with asbestos in it. do you really think what they mean is we should let you go into that building and send your kids into that school with asbestos in the air? i don't think so.

we regulate and protect the health of lots of people in lots of different ways. we have 10,000 fewer deaths from smoking, about 7,000 deaths a year from smoking. obesity or the results of obesity are already at 6,000, and in a year or two will be much greater and smoking will continue to come down. obesity is the single biggest public health issue that is growing, not declining, in this country. in fact, the average famy is approaching 1,000 pounds and we'll be there soon. if you think about what that means. the average people is four people. it's going to be a ways before you get there. it's not going to be a thousand for a long time, maybe i 800. it is enormous. the number of people -- we find in hospitals 6-year-old kids that when you look at their blood they have type two diabetes that you never saw in anybody younger than 19. we look at 19-year-olds and

their blood looks like 60-year-olds. as a matter of fact, fareed, it's the first public health issue that has gone from a rich man's disease to a poor man's disease. things used to go in the other direction. today, if you -- remember back in the days of -- before the great depression when there was all of this excess. you'd sooi see guys with their big bellie it was a sn of success. today those guys are at health clubs. unfortunately, people who don't have the knowledge which typically is poor people who we'r taking advantage of, they are putting on weight at an enormous speed. >> so liberal or conservative, how do you think of yourself? >> i never really thought of it in those terms. i've always found myself much

more liberal than conservatives and much more conservative than a liberal. somewhere down the middle is probably right. i think myself as a pragmatist. i don't have any agenda. i don't have any belief -- you say government should or should not be iolved. tell me the issue. if government could save a million lives tomorrow, yes, government should be involved. if government would hurt the economy and there's no benefit, then, of course not. the real world is somebody is going to win. somebody is going to lose. there's cost to everything. but if you make the long-term investments which is an investment in education, investment in public health, investment in infrastructure, those kinds of things, we will have a better world. "new york magazine" article says that you have privately expressed a lot of criticism about president obama.

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mayor bloomberg, what does the campaign look to you so far like? you've watched it from the sidelines. do you think we're having the right debate? >> well, there hasn't been a debate yet. unfortunately when we get to the debates, as we all know, these are never debates, they are questions where there's never a followupere you ask a question and i can candidate give an answer that has nothing to do with your question, and then we go on and somebody else does to the other person and back and forth. i think unfortunately -- it's not just the fault of the candidates. we tend to have to have a simple short answer to complex problems

for the sound bite requirements of modern day journalism. and perhaps the education level of the modern citizen. complex problems can't be reduced to that. >> when you look at the debate taking place at the presidential level, it's happening with the backdrop of what's happening in pe. do you believe what this country needs is to cut government spending in order to balance the budget, perhaps raise some taxes? oroes tis ecomy need a stimulus? >> well, i think number one you can't let the deficit keep growing and growing, and neither candidate has given any credible plan that would balance the budget. and also neither has congress, republicans or democrats. when you look at what they propose, they are stopgap things which basically they know they're never going to get

implemented. it just let's them go to the public and say we did something. so i've not seen a real plan with the exception perhaps of some symbols and getting rid of bush era tax cuts on the revenue side that would balance the budget over the next ten years. the monies that are sequestered would be a disaster. if we cut that warks it was deliberately designed so everybody knows you can't use it, it will never go into action. and it doesn't save much money anyway. i don't think either candidate has come up with a comprehensive plan that leaves you to close an $8 trillion deficit in ten years. now, we have spent a lot of money on stimulus, an enormous amount of money on stimulus. i don't think there's very much evidence that that has helped. i think the problem we have is we don't have private sector job creation and that needs to -- that will only be done, not by subsidies but by incas

confidence in future. banks won't ma loans and business people won't borrow to build plants and hire employees unless they have some confidence in what the tax code is going to be, what regulation is going to be, what the courts are doing to do, whether or notwe'reoing to addre some of these social issues like guns and education and immigration and that sort of thing. and just spending money isn't going to do that. i know why elected officials want to spend money. it's great. i can get a vote from you if i give you some money. okay. but that doesn't help your children, it just helps you. >> do you think the bush tax cuts should be allowed to expire because that would raise a huge amount of revenue across the board? >> i have said i don't think populism of justq: tking some and not others is the right thing. we're all in this together. if you just would let expire the bush era tax cuts on the very

wealthy, it does almost nothing to balance the budget, a punitive thing to whip up a populist sentiment and get a few votes and say that's good. what we should be doing, and i've said this to the president, i think he should stand up and say i'm going to let the bush era tax cuts end for everybody. incidentally it's politically doable because congress is not going to vote anything this president wants until after the election, and then only if he is re-elected. but if the president were to stand up and say i've got enough votes to sustain a veto and i'm just going to let them all expire, he would then be able to turn to the republicans and say, you want more revenue? i got us $4 trillio more revenue between now and ten years from. you want to work with me on an equivalent $4 trillion of cuts done intelligently, and how do you do that? i would just pick simpson-bowles because it wasn done in one for you and one for me and one

for the otherguy if he supports you and i. this is an intelligent way and it's politically possible. >> what did the president say? >> he appreciated the input. >> the "new york magazine" article says that you have privately expressed a lot of criticism about president obama. >> no, i don't think that's fair. i don't agree with him on everything. i happen to think that obama has been a much better president than people give him credit for. he's in a very difficult situation. you've got a congress that is very polarized and partisan. there are problems all over the world. our two big markets, china and europe are in big trouble. actually we've done pretty well in this country. i would always like to -- i agree with the president on a lot of the social issues. i'd like to see him do more. but you'd always like to see him do more. the way i phrase it. i can tell you how to raise your children. raising mine is a little more

difficult. it's easy to say the president should be doing more. he's got a lot of things to balance. and on balance i think he's done a good job. i also know governor romney. i've known him for a long time. he did a good job as governor of massachusetts. i liked a lot of things he did up there. he actually put in a health care plan that worked. i don't know what's going to happen with the health care plan that is called the obama health care plan but, in fact was passed and written by congress. but we have to solve the problem of health care costs that we cannot continue to afford, and the president has tried to address that. every time he turns around everybody says, yes, we've got to solve the problem, but don't cut mine. that's the real world. he's got a very difficult job. if i've ever criticized, it's only i like some of the stuff he's done. i wish he would have done more. i don't think with that, i wish he would have done less of that. i think he's h working and

cares very much and h a big fan base. you c saany the same things about mitt romney. >> so any cnce of an endorsement? >> you never know what's going to happen. >> mayor bloomberg, thank you very much. >> thank you for having me. up next, what in the world. at the g-20 summitiet suesf of america's ne talking about canada. we'll be back. we even reward you for the time you spent there. genius. yeah, genius. you guys must have your own loyalty program, right? well, we have something. show her, tom. huh? you should see november! oh, yeah? giving you more. now that's progressive. call or click today.

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now for our "what in the world" segment. this past week las gav voes, mexico was literally turned into a global public square. leaders from 19 top economies plus the european union gathered to discuss the major crisis, the euro, global growth, syria. the g-20 summit shed light on a few crucial relationships. take the u.s. and russia. much was made of how presidents obama and putin leaned away from each other during talks. commentators said it felt as chilly as a moscow winter. contrast that with obama and the chinese president, hugh engine toe, a warm handshake and big

smiles. the one that got me thinking was the ones between mexico's philippe gald roane and brazil's delmar rouseff. how and why? right now brazil has the world's attention, a much vaunted brick economy in the economy of china, india and russia. on the other hand, the perception of mexico is that of a poor country with regular drug-related kilths. that may be true. but very quietly mexico is stepping out of brazil's shadow. to understand why, let me first explain brazil's recent rise. ten years ago mexico's economy was bigger than brazil's. as you can see from this chart, brazil suddenly began to grow much faster, so much so that its gdp overtook mexico's and became twice as large. if i had to cite one main reason for this, it would be china. brazil's biggest trading partner. china's growing appetite for commodities led to a boom in resource-rich brazil. but just as china buys from

brazil, it competes with mexico. after joining the world trade organization, chinese manufacturers have undercut mexican ones selling at lower prices and in bigger quantities. not only that, mexico's biggest trade partner has had its own troubles. and i'm talking about the united states of america. but it seems we're now at another twist in this tale. brazil can no longer count on a sustained boom in global commodity prices. growth has slowed from nearly 8% in 2010 to 2.7% last year. brazil has become uncompetitive. its minimum wage is three times that of indonesia and vietnam. the world bank ranks brazil 126th in the world for ease of doing business. mexico, on the other hand, ranks 53rd. its economy is set to grow 4% this year. take its auto industry, for example. it generated $23 billion last year, more than oil or tourism.

mexican factories are slowly replacing chinese products in america thanks in part to regional trade agreements, but also because china itself is facing rising labor costs. mexico's growth is crucial for america. the more mexico rises, the less america will need to worry about illegal immigration. in fact, studies show migration patterns have already been reversed. while brazil tries to play a role as the alternative power to america in the western hemisphere harkening back to the days of nonalignment, mexico is more in tune with the ideas, a solid foreign policy partner. as mexico gears up for elections next month, its new president will have a long checklist of problems to fix. state monopolies need to be broken down, corruption must be confronted. creaking infrastructure needs to be repaired. top of the list is drug related

violence. brazil remains a bigger economy and will likely stay that way for a swhil. don't let perceptions of mexico fool you. despite all the violence, despite being overshadowed by its flashier neighbor, it is quietly on the rise. we'll be right back. up next, a rare look inside iran. journalist nick kristoff had unprecedented access to the country and he's going to share what he learned. ♪

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we're driving safely. and sue saved money on brakes. now that's personal pricing. the government claims it has broad support outside of the capital and to see if that rhetoric holds true, i spent a week talking to various people, from uneducated farmers to struggling factory owners. from self confident women to a grand ayatollah. iran is a country of contradictions, but there was a common thread. >> thank you so much. >> that clip was from "the new york times" columnist nick kristoff's recent journey to iran. iran is a tough place for a journalist, almost impossible to get a visa in the first place. if you're able to get in, you're under tight restrictions. that's why kristoff's access was

extraordinary. not only was he granted a visa, but the iranian authorities allowed him to travel from the east to the west unescorted. i invited him to come in and talk with him about what he saw and what he heard. welcome back, nick. >> thank you. >> what was your dominant impression given this access? you have been to tehran. what felt different? >> as you know, one of the extraordinary things about iran is how pro american everybody seems at the grassroots. you go to pakistan and egypt and we pour billions in and everybody hates us. you go to iran and everybody wants to buy you tea or invite you into their homes. it's stunning the pro american quality of the country. i think more broadly politically, i was reminded absolutely there is still support for the regime, for the government in rural areas, among less educated people, people who

don't have access to satellite television, but all of the larger social forces seem to me to be working against the government. more educated people, more urbanized people, people who do have international connections just are more and more fed up with the system. they're upset by the economic downturn and they don't really blame the west for sanctions. they blame their own government. >> did you get a feel for whether or not the religious nature of the regime is being questioned. in other words, they don't like the government, but that doesn't necessarily mean they want a whole scale regime change and a revolution. >> i was struck by how often i heard religious people say that their system is not really islamic and were questioning it on religious grounds. many people seem to yearn for something a little more like turkey where there's a strong islamic component to the

society, yet greater democracy, warmer ties with the west, and none of this isolation that i think really leaves people embarrassed. here you have a country with a great civilization, extraordinary history, and whenever you travel outside the country, you're regarded as a terrorist. think people are frankly kind of fed up with the regime. >> it feels like it's a great trading culture that has been closed in and hemmed in. i was struck by in tehran, how the businessman in particular really hated the fact that they were so isolated from the world. >> yeah, absolutely. as you know, because iran is now outside of the banking system, so just the simplest transactions, simplest international transactions can't be done through banks anybody. they have these howala system, traditional islamic system of money transfer, that seems to be the only sector of the economy that is prospering. you can still walk in with a suitcase full of cash and pick it up two days later in beijing.

that's a very expensive way to do business. anybody in business is really suffering, and for the most part blaming their own government. >> you were with your kids. how did that change -- two of your kids. >> with two of my kids. it was fascinating. i had my 14-year-old daughter and my 18-year-old son, and my daughter in particular -- i've been a little nervous because she would have to wear the hijab and a monto, kind of a cloak. she, i must say, was a wonderful ice breaker. it was fascinating to see iranian women interact with her. iran is not monolithic. there were more traditional conservative, traditional women who were trying to lower her head scarf and cover her up a little more. meanwhile young women all over iran were saying, you're young, you need to live a little bit. they'd pull back her head scarf so it was barely covering

anything. it was interesting to see the degree to which hijab can both mean truly covering things up and alternatively be just a come hither approach to traveling around. >> did you find that when you were in the rural areas there was any kind of suspicion or greater suspicion because you were a foreigner or an american? >> people were so welcoming just everywhere we went, including regime supporters and even in rural areas i would stop and talk to farmers. i remember one woman who shouted out be careful what you say, they're foreigners. people were much more cautious in speaking out than on my visit in 2004. i think my sense is that iranians can still feel comfortable criticizing the regime amongst each other casually. they don't mind if they're overheard on a bus criticizing the government. but doing anything public or formal that smacks of activism,

including speaking formally to a foreign journalist, that crosses a red line. people were much more cautious about speaking on camera, but they were friendly everywhere we went. >> what conclusions do you draw? what conclusions do you draw about the sanctions and then about what we should do with their nuclear program? >> my sense is that sanctions are working about as well as one could expect. i think sometimes we miss leaf ourselves in thinking they're hurting top officials, and they are. but mostly they're hurting ordinary people. i think we need to acknowledge that. but they are working in a sense that they're imposing tremendous economic pain around the country and that people are, for the most part, blaming their own system for it. i think they're creating pressure for change. but the one thing that i think could really rescue the regime and would bring about much more -- and keep it in existence for longer would be a new war between iran and the west,

possibly started by israeli strikes on iranian nuclear strikes. and to me, at a time when sanctions are to some degree working, when the regime's removal or transition seems to be a matter of time, i think it would be a tragic mistake to engage in a military option that i'm afraid would freeze that regime in place. >> nick kristoff, pleasure to have you on. >> good to be back. we will be back. up next, a rare eurozone economic success story. a country that's growing faster than india, has almost no debt, and it does this all by practicing austerity. i'll explain. recharge sleep system combines the comfort of aircool memory foam layered on top of beautyrest pocketed coils to promote proper sleeping posture all night long. the revolutionary recharge sleep system from beautyrest...

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there is only one country in the entire european union that has a budget surplus. its national debt is just 6% of gdp, less than a tenth of germany's. its economy grew nearly 8% last year. the country is es tone yeah and does it while employing a very unfashionable practice, austerity. my next guest got into a twitter argument with paul krugman when he questioned es tone yeahista tus. he called krugman smug, over wearing and patronizing. the author of that tweet is the president of aus tone yeah who joins me now from the capital, tall lean. mr. president, thank you for joining us. >> thank you for inviting me.

>> the basic point paul krugman makes is your numbers look very good, but after ap depression-level slump, you have still not even returned to your 2007 levels of gdp, whereas the united states and germany have well surpassed those. so that, in fact, your recovery is not that dramatic after all. what would you say to that? >> my first objection was simply the cherry picking of data. anyone who has studied statistical methodology knows that where you put your graph and your axes can make anything look big or small. secondly, i think there's a fundamental mistake here made with cause and effect. we had a slump as a result of the september 15th, 2008 collapse of lehman in which, being outside of the eurozone and having no european central

bank funds to access, we just had a -- lost our liquidity, so the government lost all its revenue or a large part of its revenue. so there was not much else to do but cut costs. >> would you argue, though, that you represent a kind of viable strategy? >> well, we're one example. but again, i would argue, also, we didn't have much choice. but it is true that on the one hand cutting dramatically our expenses, we cut the budget ultimately by 9% of gdp which affected everyone. we all took 10% to 20% cuts in salary. that was the only way to go. so i mean you could argue in another country's case that they ought to borrow.

but we did not have access to those funds at the time. but the point is that you can get growth through different policies. growth is a result. it is not a policy in and of itself. so this kind of category mistake that politicians make is not proper. >> the central argument against austerity as you know is that at a time of weak economic demand, if you cut spending, if you fire police officers, other government workers, you are going to slow the economy further. those people who have just lost their jobs won't be able to buy things that you you -- you send the economy into a kind of downward spiral which certainly seems to have happened in a place like greece. >> well, we suffered an 18% decrease in gdp from 2008 and 2009. that was pretty much of a downhill spiral. yes, that's true. but i think that if you take --

for example, if you liberalize the labor market, clearly you get rid of closed shops, closed occupations, which is a big problem in europe. not so in the united states. that in fact you stimulate economic activity and i would argue that one of the things we need to do in europe is in fact decrease the barriers that exist in the single market. the opposition to free movement of services which again sounds pretty bizarre and in the united states but nonetheless is a fact of life in europe. so i think we can in fact stimulate economic activity by removing barriers rather than simply trying to get -- getting additional money from others. ultimately the problem is where does the money come from. who has it and when one says, well, the germans should be paying, well, germany does have

a democratically elected government and if the people don't want to pay more, then how are you going to change that? >> mr. president, thank you for joining us. up next, how a world leader who loved to make long speeches learned the art of brevity. it isn't just your annual exam. it's your daughter's wedding. did you know with your health insurance you may now have some preventive benefits with no co-pays or out-of-pocket costs? it isn't just your cholesterol screening. it's all the tomorrows you're looking forward to. learn more at healthcare.gov.

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many world leaders and their entourages converged on rio de janeiro this week for the unisustainable development conference. but my question of the week portends to the people who were already there, the ones who live in that beautiful city. what are the residents of rio de janeiro known as -- a, b, c, or d?

stay tuned and we'll tell you the correct answer. remember, if you miss a show, go to itunes, you can buy the show but you can also now buy our gps specials there. go to itunes.com/fareed. this week's "book of the week" is fate of the species. it is an elegant compelling. it lays out mega challenges we confront -- super viruses, climate change, disappearing species -- it is enough to make even an optimist like me very worried. now for the last look. fidel castro is not a man known for his brevity. he once delivered a speech that clocked in at seven hours and ten minutes. he has a guinness record for the longest speech at the u.n., four hours, 29 minutes. his opinion pieces have often filled whole pages of the state-run newspaper but this week he offered just 35 words. not exulting communism or

denouncing capitalism, but raising the power of yoga. he said, "yoga does things with the human body that defy our imagination. there before our eyes is imagery that arrives instantly from enormous distances through the passage to the unknown." deep. the correct answer to our gps challenge question was, d, residents of rio de janeiro are known as cariocas. it seems it's what the native people call the houses built by the portuguese and it stuck. don't forget, rio doesn't just host u.n. conferences. will host the 2014 soccer world cup, and also the 2016 summer olympics. so that bit of trivia might come in handy. thanks to all of you for being part of my program this week. i will see you next week. hello, everyone.

i'm fredricka whitfield with a check of our top stories right now. celebrations are still going strong in egypt's tahrir square hours after the country announced the winner of its presidential election. it's muslim brotherhood leader beat a former prime minister in hosni mubarak's regime. 52%-48%. this was the first democratic election in egypt's history. back here in the u.s., tropical storm debby is strengthening off the gulf of mexico. the storm's path is uncertain but people living along the texas coast to the florida panhandle are getting ready. louisiana governor bobby jindal isn't taking any chances. he has already declared a state of emergency due to the threat of possible flooding. in colorado, firefighters are battling a wildfire near colorado springs. the walldon