go to itunes and search "state of the union." "fareed zakaria gps" is next. >> this is "gps." welcome to all of you in the united states and around the world. i'm fareed zakaria. we have great show for you today. we'll start with nsa spying and uproar it caused in europe especially. germany's former defense minister will explain what is going on there. and then the former nsa director will help us understand what america's spies are really doing around the world. also, michael bloomberg called the mayor of the world. with the election of his successor on hand, what lessons does bloomberg have to share with us? one of them, cities need rich people. he'll explain. and the latest weapon against bad guys.

it's not a newfangled drone or bunker buster bomb. it's simply brett me to. i'll explain. first, revelations about the national security agency and spying on foreign allied leaders has been embarrassing for the obama administration at a time when it hardly needs more bad news. is it more than an embarrassment? should it raise alarms abroad and at home? at first glance this is a story that is less about ethics and more about power. the great power gap between the united states and other countries, even rich european ones. the most illuminating response came from the former foreign minister of france. he said in a radio interview, let's be honest. we eavesdrop, too. everyone is listening to everyone else. he went on to add, "we don't have the same means as the united states which makes us jealous." america spends tens of billions of dollars on intelligence collection.

it's hard to get data to make good comparisons but it is safe to assume that washington's intelligence budget dwarfs that of other countries just as it does with defense spending. it is particularly strange that this rift should develop between the united states and its closest allies in europe. it was predictable and in fact in a sense predicted. in 2002, the british diplomat robert cooper wrote an essay in which he argued that europe was a post-modern international system in which force was no longer a serious option. instead, economic interdependence and cooperation were the governing ideas of state craft. and certainly when one looks at the european union, it does describe its reality. the prospect of war between france and germany which had gone to war three times between 1870 and 1950 seems utterly impossible. but outside of europe, the world is not post-modern. the solution is double standards. within europe one set of rules. outside it, he recommends,

rougher methods of an earlier era, force preemptive attack, deception, whatever is necessary. among ourselves we keep the law but when operating in the jungle, we must use the laws of the jungle, he wrote. this is what was violated by nsa activities. washington was playing by the laws of the jungle but inside europe's post-modern system. partly this is because the distinction is not easy to maintain. what if you look for terrorists within europe. that is people who still play by the laws of the jungle or even worse. america as a global power is operating all over the world trying to tackle some of the nastiest threats out there. perhaps it doesn't have the luxury to retreat to a garden and renounce nasty tactics. if it did, it's not likely that china, russia, al qaeda would follow suit. precisely because washington has to get its hands dirty, it should be smart about this.

you don't stop terrorists in europe by listening in on angela merkel's cell phone. the rewards of spying on friendly heads of government are probably outweighed by the risks. and most troubling, it's not clear that many of these specific activities were clearly thought through and directed by the white house. nor do they appear to have been vetted by congress. in the wake of 9/11, america got scared and dropped any sense of constraints on its intelligence activities. it is not an accident that the eavesdropping on chancellor merkel began in 2002. the fact that technology now allows the nsa to do anything doesn't mean it should do everything. we need a better and clearer set of rules for intelligence activity and we need confidence that these rules are being followed and observed. let's get started.

given the realities i just talked about, what is really going on in the heads of european officials? is all of this anger and outrage genuine? who better to ask than a former top official who can speak freely. that's why i invited germany's defense minister from 2009 to 2011 before that the nation's minister of economics and technology. he's now a distinguished statesman at the center for economic recovery here in the united states. welcome. >> pleasure to be here, fareed. >> so when you were in the defense ministry, you must have seen all of this stuff and seen the espionage and counterespionage. did you assume the united states was spying in germany? >> well, everyone spies on each other. that's a fact. and at the moment we hear interesting voices that try to

den it. that we don't do it and they do it. everybody does it. what i didn't know and didn't have an idea of the level of spying. we wouldn't have made the decision to spy on the top level of alliance partners. of allies. that's definitely a new dimension and one of the main reasons for the alteration in germany at the moment. >> does the german government not try to get information on what the president of france is thinking? >> we have close relationships and the first thing to do is usually to pick up the phone and talk to your partners and not tap the phone. there's steps you should go and we were not interested in spying on the top level of other partners. >> so what do you think that this means for european/american relations? how serious has the breach of trust been? >> it's serious. it's something new.

we've had misunderstandings on one or the other side. different perceptions on certain issues, namely iraq, guantanamo or even climate change and other things. we always had a pragmatic way to find a solution. now we are at the level that european leaders don't only lose faith in a partner but also their face. so the face losing aspect of it is actually to take the example of angela merkel. she was defending the nsa program this summer. this summer. she was publicly defending it despite being in an election and it was not very popular. she defended the nsa program. ads a committed trans transatlantacist, she defended it. and then to learn two or three months later that she personally was tapped and then to learn that actually the american president knew about it already in summer, that's one of the moments which i would consider being face losing relevance.

>> you know angela merkel well. you served as her defense minister. how angry do you think she is? >> she is, i think, really disappointed. and she is very analytical person but she shows lots of emotions when it comes to transatlantic friendship and partnership. and to have someone on the other side of the atlantic who is not willing to communicate at the moment when you need to talk to each other. such things can be resolved. someone who is not willing to send someone over to germany to explain what is happening or to paris or to other places but to wait up until the moment german delegation comes to washington are tiny diplomatic steps that would be helpful installed at the right place. >> pleasure to have you on. thank you so much. >> great to be here. thank you. up next, the other side of the story. i'm going to speak with a man who both ran the national security agency as well as the central intelligence agency. michael hayden when we come back. my customers can shop around--

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now for the american side of the story. i welcome general michael hayden

who ran the national security agen agency. he is now principal with the chertoff group. welcome back to the show, michael. >> thank you, fareed. >> let's focus on this issue of eavesdropping of senior officials of allied governments. there's a distinction about collecting metadata, traffic and phone calls and emails from across europe. tell me how would it work if the national security agency would tap the cell phone of senior leader of an allied government, who would have made that decision and what would the process have been? >> it depends on the senior leader. depends on the intelligence requirements. very often, fareed, what you get are very specific intelligence requirements from our national command authority and they are laid out to the intelligence community and then the intelligence community goes

forward and lays out a collection plan the best way to get that very needed information. occasionally, fareed, occasionally, what you have is political guidance kind of being placed on top of your operational planning. i had political guidance while i was director of nsa. i had targets. i had legitimate needs. but i was told, frankly, back off. that target is too sensitive. i don't want you doing that at this time for this purpose. >> does that mean that somebody in the white house very high up would have had to say in 2002 -- this is the george w. bush white house -- somebody would have had to say it is okay to spy on the chancellor of germany, the nsa would not have done that without such authorization? >> no. i don't want to talk about anything specifically, fareed. i'm just not able to do that. i would say political guidance was very often by exception. there was a broad understanding that of the things you were being tasked to do, you would be

led to certain kinds of activities. i listened to the minister and he gave a very powerful argument as to why activities like this could lead to damaged relationships. let me give you a sense of my world. what we really have here is worlds colliding. when president obama won the election, i mean, he was addicted to his blackberry. he wanted to keep his blackberry. boy, we were really nervous about that and suggested he not do that and he frankly told us we're going to have to pry it out of his hands. he voluntarily limited his use and nsa put a few more security enhancements in it. fareed, let me give you the backdrop to that little vignette. we were telling the most powerful man on earth that his own communications inside the capital would be attacked by a variety of foreign intelligence

services. that's my world compared to the world you just heard from the minister. >> the point he was making was that you wouldn't do this to head of an allied government that is treaty allied of the united states of six decades with whom you have a deep understanding. why wouldn't you just call merkel? >> i mean, look. there are a variety of questions. i've not been in the room. when we decided to intervene against libya, the germans were opposed. they didn't participate. i'm sure a very legitimate intelligence question would have been do germans oppose us so strongly that they are willing to break consensus in brussels and therefore deny you a nato validation for this and finally i'm creative enough to think of tim geithner turning to his intelligence guy saying i really need to know in their heart of

hearts how far the germans will go with greeks and preserving the eurozone. those are all legitimate questions. we could get an answer by direct dialogue. i'm sure we did. you know? sometimes there would have been more to the story and i can imagine circumstances where what i just described are legitimate intelligence issues. >> do you think that the germans don't spy on the french? at this senior level, the level of president of france? >> i don't know what another service would do against another friend. it's not something we look into. i would suspect that germany and france and other countries would do what they consider to be in their national interest. to be very fair, in your national interest is not alienating a friend on whose cooperation you rely. you do have a very serious

tradeoff. i think the minister hit a very, very good point here. this wasn't just a matter of preserving faith, it was a matter of protecting face. i mean, whether or not we did this, whether or not the chancellor already believed we did this, frankly whether or not the germans even knew about this, that's not the issue. the issue is that it's very public and is embarrassing the chancellor. >> what about the issue whether or not the white house knew, whether or not the president knew, dianne feinstein claims she didn't know, what troubles many of us, mike, is not the actual activities here but the idea that they are happening in some kind of strange gray zone where it's not entirely clear who is authorizing the stuff and whether it is being overseen in an appropriate manner for a constitutional democracy. >> yeah. here's how i would look at it. if the president said he didn't

know, he didn't know. i just take that at face value. if, however, fareed, we get sentences like the white house didn't know or the administration didn't know or the national security council didn't know, boy, i really have problems accepting that. what is it they thought we were going to do with those intelligence requirements and where did they think this stuff was coming from when we answered those requirements? >> in other words, they would have given general directives and been smart enough of how that stuff was being collected. >> at a minimum, fareed. at a minimum. >> is that a little bit like the famous case in british history of the king of england saying when he wanted the archbishop assassinated will someone rid me of this meddling priest? >> it's funny you brought that up. the thought occurred to me

within the last 48 hours while watching the press coverage. no, it's not that. general clapper and general alexander commented in their appearance before the house intelligence committee about the national intelligence priorities framework. you huddle in the west wing in the sit room at the cabinet level every six months hammering out intelligence priorities. countries down the side, topics across the top. where those two vectors meet, you put a number. if the number is one or two, that's a really high priority. so everyone knows what's going on. if you give a requirement like that a high priority, you're telling the intelligence community to embrace some measure of risk in order to get that intelligence for you.

>> all right. final thought, michael hayden, what would you do now? >> right now i think we have a necessary -- i don't mean to demean this. we have a fair amount of political theater. our good friend, the chancellor, is and has to act enraged and our president really and for the benefit of the public has to go and in essence step back. fareed, we have to be careful here not to overachieve. we had a crisis of conscious in the '90s and we told our human intelligence collectors to stand down and don't talk to bad people. we suffered for that. we could also suffer if we overachieve now and tell our electronic intelligence folks to stand down and never listen to good people. so we've got choices to make too. >> mike hayden, always a pleasure. >> thank you, fareed. up next, what in the world? it's not just france and germany. for a very different reason saudi arabia is upset with the united states. but this time washington may actually be doing something right. i'll explain when we come back. peace of mind is important when you're running a successful business.

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world headquarters in atlanta. new details about the deadly shooting at l.a.x. prosecutors say the suspected gunman fired at the tsa officer at pointblank range friday, walked away, and then came back to shoot him again. tsa officer gerardo hernandez later died. the suspected shooter, paul ciancia, was shot several times by police. he is described as unresponsive in the hospital. john kerry is in cairo today asking egyptians to work toward democrat tracey. the secretary of state is the highest level u.s. official to visit egypt since former president morsi was ousted in july. kerry said the u.s. did not suspend military aid to egypt as punishment and promises humanitarian aid will continue. back in the u.s., a tropical storm has stormed off the southern tip of baja california. the national hurricane center says tropical storm sonia has maximum sustained winds of 45

miles per hour, and picking up speed, moving about thea 13 miles per hour. coming up at 2:00 eastern time, the mayor of toronto has apologized for "mistakes," but says he isn't going anywhere. he made the statement on his weekly radio show just moments ago. toronto police reportedly had video of him smoking a crack pipe. we'll have more details on the statement and what's next. i'm frederiqricka whitfield. more gaps ga-- more "fareed zak gps" right now. for you for what in the world segment. america's middle east policies are failing we're told and best evidence is that saudi arabia is furious. dick cheney, john mccain and lindsey graham have all sounded the alarm about the recent rejection of a seat on the u.n. security council. but what everyone thinks of the

obama administration's handling of the region, the last measure of american foreign policy should be how it is received by the house. if there were a price for most irresponsible foreign policy, it would be surely be awarded to saudi arabia. it is the nation most responsible for the rise of islamic radicalism and militancy across the world. over the past four decades, the kingdoms immense oil wealth has been used to underwrite the export of an extreme intolerant and violent version of islam. go anywhere in the world from germany to indonesia and you will find islamic centers flush with saudi money spouting intolerance and hate. a top treasury official said -- >> if i could snap my fingers and cut off funding from one country, it would be saudi arabia. >> hillary clinton confirmed that saudi arabia remained a

critical financial base for terrorism. she also said that there was only limited action to stop flow of funds from taliban and other such terrorists groups. saudi arabia was one of three countries in the world to recognize and support the taliban-led government in afghanistan until the 9/11 attacks. it is also a major player in pakistan, now home to most of the world's deadliest terrorists. the country's former law minister told a german news agency that there was no doubt that saudi arabia was supporting groups throughout the country. ever since al qaeda attacked in 2003, the saudis have stamped down on islamic terrorism at home but not ended support for clerics or militants abroad. during the iraq war, much of the support for sunni jihadies came

from saudi sources. a pattern that continues in syria today. saudi officials have expressed dismay at president obama's policies in syria and iran, but its objections are not framed by humanitarian concerns for people of those countries. instead they are rooted in a shia ideology. remember the house is sunni. all other versions of islam has been treated as heresy. you see the regime fears that any kind of empowerment of the shia anywhere could emboldened 15% of saudi population that is shia and lives in the part of the country where most of the oil reserves can be found. that's why the saudis sent troops into neighboring bahrain in the arab spring of 2011 to crush the shia majority uprising. saudi royals have been rattled

by the events in their region and beyond. the sense of discontent that launched arab spring is not absent in their own population. they fear rehabilitation of iran, they also know the united states might soon find itself independent of middle eastern oil. given these strains, it is possible that saudi arabia worries that a seat on the u.n. security council might constrain it from having maximum freedom of action or the position could shine a light on some of its more unorthodox activities or that it could force riyadh to vote on issues it would rather punt on or more or that they spent years lobbying for the seat. whatever the reason, let's concede that saudi arabia is angry with the united states. but are we sure that that is a sign that washington is doing something wrong?

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it obviously isn't a presidential election year, but there ae mayors and governors and other officials who need to be voted into office. one of these elections takes place in new york to replace michael bloomberg. he is famously served three terms as mayor in a city where two used to be the limit. his time has now run out. i sat down with the mayor at the recent clinton global initiative conference and i asked him to reflect on the past and the future. what do you think coming out of the business world, what is the main thing you learned about being mayor? what's different? >> basically there's a lot more similarities than differences. the objective is to get the great people and give them authority to go along with responsibility and have their

backs and get them resources and make them work together. and that's true whether you're running a business or a city or a state or a country. and if you can attract the best and brightest from around the world, they'll come up with ideas. the executive's job is not to do that. the executive's job is to find the people. >> do you think the american system is resilient enough to withstand what is happening in washington these days? >> yeah, sure. good old days we've had partisanship and parties go out of business and we've gone through crises and as winston churchill said, you can always depend on americans to do the right thing after trying everything else. >> we're currently in that phase. how do you make a city thrive and survive in today's economy with all of the challenges that the economy has today? what do you think the key to success of a city is? >> has to be open to everybody. diverse population makes a big difference. the city has to have a spirit and reason people want to go there and live there.

one of the problems with washington, d.c. is everybody lives there but they look out. they never think they're going to stay there for the rest of their lives. always waiting to go home. new york city or other great cities people want to come there. and today there are more people that are moving to new york city than leaving for the first time in decades. we have more tourists than ever before. more people have jobs than ever before. and that creates a dynamic place where the best and brightest want to be. and if the best and brightest want to be there, they'll create and generate a tax base so that you can take care of the less fortunate but the real key and it's not popular thing to say but you have to have the wherewithal. these people who are willing to think outside of the box and try new things and start new businesses and take risks if you're going to have a future otherwise you do the same thing. if you do the same thing, we know where that ends. not prettily. >> you also have talked about how it's very important for a city like new york to have a

bunch of very rich people so you can tax them. >> sure. >> you're unapologetic about that. >> the fact of the matter is a small percentage of the people pay the taxes. if you don't want tax revenue, you can lose those people but if you want to have ability to go and invest in infrastructure and invest in cultural institutions and have social programs that can really help people who are less fortunate, you have to have the dynamic drive, the people that are creative and the revenue. that comes from people who do well and in our city the poor actually are a little bit better than the poor in other big cities but the real reason for this great inequality as people describe it or gap in income is we have been very successful in attracting the very, very wealthy. they come here and spend money and create businesses and they can go elsewhere. they are mobile.

they have resources to go. if you were to take the top 20% out and look at just the 80% that's left, the income or net worth is 100% correlated to academic achievement. and more and more we are going to be facing the fact that the demands for society are greater and perhaps greater than we can teach or the average person can learn and how that works out i don't know. it is clear that if you have a better education and if you can be more creative, you'll do better and if you don't, then unfortunately you're going to be struggling. >> what are you worried about when you look at new york after bloomberg? what are you worried about being undone or a legacy of government that will be perhaps eroded? >> i think most of the things we've done hopefully if we've done a good job will stay in place. yesterday i was in london.

the weather was nice. you think better of any city when the sun is shining. but london is a real competitor to new york. and we've got to understand if we were to stop improving, stop diversifying, stop investing, we will get pushed back and other places will take over. i was in paris the day before. i had dinner with some people all of whom talked about their friends moving out of paris and out of france because tax rates are so high. those are people that will create jobs and pay taxes down the road. you can't hold the waves from coming in. you have to keep making society open and you have to keep providing opportunities. if you start to focus on equal results rather than equal opportunity, unfortunately you start to dumb everything down and if you do that, you're going to get hopelessly left behind. up next, one near after hurricane sandy. more from mayor bloomberg and others on what cities can do to deal with the effects of climate

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one of the big trends of the last few decades has been the growth of cities. more and more people around the world are moving to urban centers. and with that, cities have grown in power and importance. but what can a city do to combat something even bigger? climate change. i had a great set of panelists recently at the clinton global initiative. michael bloomberg, the mayor of new york city, judith rodin and jim kim, president of the world bank. listen in. jim kim, sketch for us the broader issue of resilience. you are doing work at the world bank trying to help these cities. what do you think is the challenge they face? >> cities are responsible for 70% of the carbon that goes up in the air. we have to think about how cities are structured and how they're built. the future of the planet depends on how we build the cities.

at the same time, we see that disasters have been increasing. cities have to build in a kind of resilience to be able to respond. mayor bloomberg did this after sandy. the numbers are staggering. 70% of all of the carbon emissions, china itself by in the next 20 years will have a billion people living in cities. one country will have a billion city dwellers. if you look at how they're doing the planning, in some cases, cities are well planned and cities go forward. in vast majority of places, cities don't have capacity to begin planning for resilience and think about their carbon emissions. only about 20% of all of the major cities including in developed countries can measure their own greenhouse gases. in the developing world what's really difficult is that cities are not credit worthy. of the 500 largest of cities in the developing world, only 4% are internationally credit worthy.

higher percentage are nationally credit worthy. they need technology and know how to plan and build cities that will be cleaner and greener and more livable and at the same time make the contribution they need to make to reducing our greenhouse gas emissions. >> when you look at this at the rockefeller foundation, what do you think is the key to building this kind of resilience? >> resilience is about the ability to rebound more quickly and more effectively after these shocks and stresses. we need much more robust systems. we need better land use planning. obviously technology because we have to get realtime information and realtime decisionmaking, but we also need to build community capacity and social resilience. the mayor talked about education and education gaps. it's interesting if you think about medellin, for example, that they decided the way to combat drug cartels and violence they had was to build social

resilience and a better education system and build a community fabric. the response in various neighborhoods in chicago to the 1995 heat wave, which was totally unpredicted had to do community by community equally hard hit by the kind of social and community fabric so resilience is really about all of those elements and more than climate change. the next shock could be terror, an economic crisis. >> you have tried both before but even after particularly after sandy to lay out a plan for new york in terms of investments that with a make it more resilient. it strikes me that you run up against two big political problems. first there is still a big debate certainly in washington as to whether climate change is real and man-made and secondly there's not an appetite for big public investment. how do you get around those two

issues? >> the problems with big public investment is payoff is down the road. we live more and more every day in a me, now, i want it kind of world. and we're unwilling to make investments for our grandchildren and getting to the point we're unwilling to make investments for children. >> what about climate change? you have gotten into trouble with views on climate change. i would argue. don't make the argument that the world is going to be different 50 years from now. nobody cares. it is like congress saying we are going to have standards which are going to have to be met by the year 2050. not one person is going to be in congress then. you have to make it for me my kid now. do you look at a place like singapore and say these guys are planning for the future? >> there is no question like that. we had 20 odd mayors from chinese cities in the other day in city hall. all of them were talking about

plans they had and they were going ahead. it is not to say that i would like to live in china and have their form of government. china is going to be the next big country that has a big agenda. they are building a carbon fueled power plant every week. they bought 150 million people into middle class. those people don't want to breathe the air they can see. they don't want to drink colored water. they want to be able to be healthy and live longer lives and the chinese government is a responsive government. they have big ethnic problems in the west. this is a problem they don't need and i think you will see them change the economic government to all of a sudden vimt environmental things and i see that at c-40 they are starting to send mayors and they come and

they don't do that without permission from the ken central government. we should like in a mirror. it is america where people don't believe in climate change or some. it is america where they don't want for political reasons don't want to make long-term investments when they do, they make a handful of companies. they don't do what is right. >> that was michael bloomberg jim kim and judith roden. up next to the bad guys it is like kryptonite.

most of north america fell back an hour marking the end of day light saving time. the extra hour of sleep has me thinking of our question of the we week. what is the largest country in the world by air xwra to operate within a single time zone?

stay tuned and we'll tell you the correct answer. this week's book of the week is, "if kennedy lived" by jeff greenfield. this is the book to read. an intelligent often haunting book about what the world would have looked like if john kennedy had lived. no vietnam but no civil rights act either. ke clever moving book. and now for the last look. last week u.s. report suggests that piracy off the coast had lowered. one scottish merchant navy officer reported this week that there might be additional reasons for the drop.

♪ oh baby baby >> britney spears. blasting songs like "hit me baby one more time" is effective in deterring pirates. loud noises have successfully fended off pirates in the past and repetitive music has been used as an ininterrogation pack ticket for years. among others, ♪ i love you, you love me >> i love you by that cuddly purple die dinosaur barnie was useful. "slim shady" played for days. >> the u.s. army played music. to smoke out man well noriega in

panama city while in the 1990s. the fbi used nancy sinatra "these boots are made for walking" to try and force leader david kuresh out of the waco compound. just last week the white house said it was concerned about a disturbing increase on the other side of africa after two u.s. sailors were taken hostage in the gulf of ginea. go ahead and as she says, hit them baby one more time. the correct answer is a, all the clocks in china are supposed to be set to china standard time. until the 1940s. the country had five time zones but that was changed to one when the communist pow er took over.

that makes for the biggest time jump between adjacent countries in the world. 3.5 hours. so perhaps you can have dinner in china and step across the border into afghanistan and it is still time for a late lunch. does anyone know a good lunch spot? thank you for taking time for my report. i'll see you next week. >> hello these stories are topping the news this hour. toronto's mayor apologying but refusing to resign despite photos of him reportedly smoking crack cocaine. we will rephrase the suspected shooter's violent path. we are waiting for the president to speak he is the