this is gps, the global public square. welcome to all of you in the united states and around the world. i'm fareed zakaria. today on the show, confidence. britain's conservative party this week said it had confidence in prime minister theresa may. >> whilst i'm grateful for that support a significant number of colleagues did cast a vote against me. >> but does anybody have confidence that her brexit deal will pass? we'll ask two of the smartest brits i know.

and anger in america. >> now, how dare you try to make that argument. >> donald trump has got to go. >> it's reached new heights. what is behind it and what will end it? joining me to talk about his atlantic cover story. also the massive marriott hotel hack. if you're worried about lone hackers using your credit cards, it's worse than you think. "the new york times" says the american government believes that china was behind it and it is all about intelligence. a fascinating spy story from david sanger. but first here's my take, for steve bannon the way to create an enduring populist majority is to combine forces on the left and right. that's why he was in italy earlier this year where parts

representing those two sides joined together in a governing alliance. that's why bannon hopes to reel in some of bernie sander's supporters away from the democratic party. but the next place we might be watching the rise of populism is france. it's lacked a party, structure and leadership. but demands have been circulating. what is striking is they combine traditional wish lists from the left and right. no wonder nearly 90% of the people who back the maker far left and far right parties support the movement compared to nearly 23% of people in macron's central coalition. the rising has also spread to belgium where it's collapsed largely over the issue of immigration. protesters have a feel of general discontent coming from left and right. just as in france, america and

britain, it appears also to be a rural backlash against urban elites. the fissure between relatively better educated urbanites appears to have become the new dividing line in western politics. everywhere the outsiders feel ignored and looked down on, and feel deep resentment towards metropolitan elites. there is a large culture of economics to it as well. the brookings institution has shown since the financial crisis of 2008 72% of the dpgains in employment have been accounted for the top 53 of the population. this urban rural chasm is

through across western countries and it is likely to get worse. research suggests that the use of robots does in fact reduce employment by about six workers for one machine. further, that in the u.s. robots have been largely deployed in the midwest and south. once met roareas, rural area is less likely to be home to centers of technology, entertainment, low end finance. in america they vote for a party that promises tax cuts for the rich and benefit cuts for the working class. that is then. "the new york times" points utthat the 2017 tax law essentially forces companies to automate.

all this might simply reflect a more generalized anxiety, a blind search for someone somewhere who promises these people a better future. in his new book neval hurari makes the point that fascism,dommic capital put the ordinary person at the center, promising him or her a glorious future. but today we seem to need just a handful of brainiacs who will with computers and robots chart the course for the future. in france, in britain, in the united states the ordinary person who doesn't have a fancy degree, attend ted toxes have the capital connections, will reasonably wonder where does that leave me? and to that question, no one has a good answer. for more go to cnn.com/fareed and read my "the washington post" column this week.

and let's get started. let's get right into a discussion about the brexit, and the mess europe currently finds itself in. joining me here in new york is david, the former foreign secretary of the united kingdom. now the ceo and president of the international rescue committee. and joining us from london is the editor-in-chief of the economist. let me start with you. what is happening? what is going to happen? theresa may is going to survive this vote and i assume that means for a while, but the brexit deal doesn't seem likely to survive, and then what happens? >> it's chaos. but i think probably the most likely is that she soldiers on, she brings this to the house of commons, it doesn't get through

and the clock keeps ticking. and i'd imagine that the most likely scenario is that in the end i think, and i'm sticking my neck out a bit here, but i think in the end we'll end up with a second referendum in this country because parliament will be unable to make up its mind so eventually the question of whether to stay in the european union or go out on the deal she's negotiated will be put back to the people. but that's vbobviously extremel divisive in a country that's completely divided. whether you are a brexiteer or remainor it's the defining issue in britain today. >> and of course david your mentor politically, tony blare, has been long calling for a second referendum. what does this do to british politics? does it upend completely in a way it's a way of this open,

close divide than the traditional left, right divide? >> this is an generational decision. i think there's a fundamental question of analysis before we get to what's going to happen. are the problems simply the result of a negotiation? theresa may has clearly made some shocking negotiations but the truth is in at least in my mind the problems you're see are at least integral to the whole brexit promise. the brexiteers said you could have frictionless trading in the european union while not being in the market. >> in other words you could have the benefits of european membership without the cost. >> exactly. and what we're seeing on this issue more widely is that the sums don't adup for brexit itself. the sums that were promised is not available. and that's why parliament is in

uncharted waters and britain accused of sailing into uncharted water. >> but i have to get to politics because of course again if you have the labor party divided and the tory party divided there is an argument that what we need is a new party that will gather together the pro-european, pronarlgss, probrexit -- and let me finish because you know where i'm going. and lots of people say you should lead it. >> the interesting thing is the tory's party strategy has been to be obsessed about europe. the labor strategy is be complacent about europe. labor is a remaining party it's actually not very divided, but it's got a leader in jeremy

corbin. i think it's not simply a matter both parties are divided and that's why we're stuck, but we've got an absence of strategy on the part of both of the leaders. the problem is a more fundamental one. and the divisions that she's referred to are part of the open closed question. since the financial crisis the industrialized economies have struggled to give a real offer to their middle classes and that's at the heart of the issue. i'm afraid europe is the handle on it. >> put this in broader perspective for us in the subyournen context. you look at europe now. britain is this chaos you so well described. macron is crippled in france. italy remains on the verge of a

bank failure which could then trigger a euro zone exit. germany has a lame duck leader. it does feel as though your base sort of falling apart. >> yes. and i think there are actually big things which are fueling frustration and anger actually on both sides of the atlantic. and we've discussed them on your program before. large numbers of people feel left behind, feel that -- are worried about their future, are not happy about the status quo. and i think there are elements of that in the brexit debate. certainly the protest in france which driven by the fury of largely less well-off people who feel that they are being hammered by the system in france. as you say italy is having some of the same so that's going on.

it's going on across the west i would say. in the european context i think there's a sort of added wrinkle in the traditional big tent political parties of the center left and center right of many european countries are now no longer -- people are so frustrated with them and the stasis they have. the rise of the afd in germany is a rise of the far left party borne of the frustration who feels the center right party no longer stands for what they do. you have something similar going on in italy. in the u.k. the creation of new political parties is extremely difficult because we have this system which really makes it hard to start a new political force. david's absolutely right. nonetheless we have a different manifestation of the same broad

themes. and arguably you have actually some of that in the united states where you have a completely different republican side today than you did a few years ago. next on gps, china's spy games. was beijing behind the hack of some 500 million married guests all in an effort to get a heads up on intelligence? i will talk to the time's david sanger about why china wanted to know who was checking in and checking out of hotels. only half the story? at t. rowe price our experts go beyond the numbers to examine investment opportunities firsthand. like e-commerce spurring cardboard demand. the pursuit of allergy-free peanuts.

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two weeks ago the massive marriott hotel conglomerate announced that one of its reservation systems had been hacked. the information of some 5$500 million guests was at risk, the company said. names, passport numbers, arrival and departure information and credit card numbers. but according to a fascinating story in "the new york times," these hackers likely weren't interested in going down to wal-mart and buying a tv with your credit card. their plot was much more sinister. my next guest has the lead byline on that story and also the author of "the perfect weapon." marriott sort of made this out in many ways to be a routine criminal operation. >> that's right, fareed. because we're all now so used to

hacks. we're also used to getting that letter saying we're terribly sorry we've lost your credit card information. that's actually not what state on state espionage is all about. what the going on here is the hack occurred in 2014. we believe from all the forensic evidence we've seen it was done by chinese intelligence and done at some point they were getting into the database of the office of personnel management, the most boring office in washington, but the one that held the security information of everyone in the united states, 22 million who have applied for insurance. what do you do with this? you put together a giant database of the most important government executives, industrial, scientists, and

you've got your security clearance and you have where they're traveling, with homoawh when. it's really interesting, all that information stolen and we've never once seen it being old sold on the dark web. what's that tell you? they want to keep it for themselves. >> marriott's response is also -- explain what's going on here because there's potentially a big bill. they said we'll pay for the processing of a passport. >> the caveat has been if it's compromisesed and we've seen it it used in a fraud, we'll buy your new pszpert. so y so you multiply that out and you

get to billions and billions of dollars. that's real money. but they haven't said they would pay for a new paspert simply because it was stolen. so what's that tell you? there's a mind frame on this issue with marriott that says this is about fraud, and we'll protect you against fraud the way your credit card protects you if your number is stolen. but suppose what this is really oppose is tracking you as you move around doing the show, yowl may say i don't want the chineeds trook tracking me. you might say i need a new passpert. and so far marriott isn't interested in paying for your passport and that of other people. the u.s. response is dent worry with a passport alone, somebody

can't ingame in the fraud. when the chinese went into the office of personnel management you may remember that president obama did not call out the chinese on this. they also didn't call out the russians, the state department, the white house and the joint chiefs of staff. now, that is now changing. we're now seeing more countries deciding to call out the offenders here. but, you know, of all the different complaints that you've heard the president make about china, tariff, the you have not heard the president stand up and say we're not going to tolerate it, why not? because we go into the foreign airlines, into all kinds of databases, foreign cell foenls

to go track terrorists and other suspects. >> it does seem from the chinese point of view this is a smart symmetrical low cost way to engage in a certain kind of siebler warfare. if you compare it to building another aircraft quarrier? america had 11, chinigh has one and the belgts keep saying what they're doing is this, which is smatter. >> they're building their big military systems, too. it's not as if they've been scrimping on that. but this is far more useful if you're trying to go whittle out those people you're most interested in. you start with the $500 million. you compare it with the 22 million you've got and then you're down to maybe 200,000 people of u.s. government and

financial industry who you're fascinated by. and what helps you do this? the big data computer systems they're invescing in a lot. now you can correlate it and sift it, figure out who's a spy, who's an executive who's traveling with whom, whom do i have blackmail material on. >> this is the new cold war. we'll be coming back to you to get the next episode and chapter in this story. next on gps, you might remember earlier this year i talked to the u.n. special repertoire on poverty. he's done it again for another western country. the results are equally grim. find out what country when we come back.

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♪ there's no place likargh!e ♪ i'm trying... ♪ yippiekiyay. ♪ mom. ♪ now for our what in the world segment. >> does this house want to deliver brexit? >> all eyes have been on brexit these days, but there is another

crisis brewing in britain. one that might prove to be even more damaging. eight years ago the united kingdom instituted an austerity policy, deep cuts to spending. the results were the subject of a report released recently by the u.n. special on extreme poverty. he exhaustively catalogs the toll these policies took. homelessness shot up 60% between 2011 and 2017. the number of rough sleepers, literally people who are compelled to sleep-out doors has increased between 2010 and 2016 by 134%. and the majority of those in poverty in britain, nearly 60% of them belong in-house holds in which at least one person works. so we're not just talking about the unemployed. not surprisingly these policies

were likely riddled in inequality. that's a far larger proportion than higher income earners, some of whom will actually benefit from changes in tax policy. facing their own budget cuts local councils have slashed spending on services by 19% since 2010. in a press conference austin excoriated the government for these developments. >> it's a totally mechanical and economic analysis that ignores the damage that i think is being done to the fabric of british society. >> then there is the related phenomenon, the massive sell-off of public land. it's notoriously difficult to calculate how much land, but brett christophers takes a stab at it in the new book. he estimates as much as half the

government's 1979 land holdings have now been sold. there is always a price. in this case the loss of parks, school yards, and public housing. the future looks grim. theresa may has suggested austerity will end once brexit is enacted but the truth is brexit will likely cost britain economically. 900,000 people could fall into poverty if welfare benefits don't adjust to post-brexit inflation. and there's the blow to economic growth that brexit will almost undoubtedly entail since britain will lose referential access to its biggest market. acrass the western world many are feeling left out. people without education are finding it hard to get good jobs. spending less on those very people is not likely to make britain great again. next on gps, trump is angry,

schumer is angry, america is angry. and what is behind all this anger? charles joins me about his atlantic cover story. don't forget if you miss a show go to cnn.com/fareed for a link to my itunes podcast. in baltimore, a community sees new life rise from ruin. in southern california, a small family business becomes a beacon of hope. in seattle, people with disabilities create success

and shatter barriers. day in, day out, people prove that when we work as one, we have the power to create better futures for us all.

why are we so angry? that is what the cover of the latest issue of the atlantic asks provocatively.

and it is an important question, one that people across america have been asking themselves. the intrepid reporter who dove into the question was charles dougan. it's the election of trump that clearly kind of seemed angry and fed up and enraged in his rallies. but in a sense the big question is why does the work? why is it that it taps into something? is it your sense that we are in fact more angry as a country than we have been? >> absolutely. over the last decade in particular. and the important thing to realize is this is something trump took advantage of, but he's the symptom, not the cause of what's going on. it's interesting because in many ways we think of anger as a negative emotion. but many years ago in the 1970s a researcher of massachusetts

sent out a survey to an entire town asking them to talk about the last time they had been angry. one of my favorite respondents was a woman who said her husband had recently purchased a new car and had shown it to his mistress before bringing it home and showing to her, and she was livid. but what she found when she expressed her anger to her husband they had a productive conversation. he could keep the mistress but he had to put his wife as first priority. anger is actually a very positive emotion. it tends to help resolve rather than exacerbate tensions. when we shout something in anger it's the densest form of communication to us and it tends to make the other person listen and come up with a solution. >> you talk about a case where debt collection, again it turns out to be a good idea if you had

debts, not to get angry. >> that's exactly right. although it can be used against you. the good anger, the anger that helps us communicate with each other can be easily manipulated. you mentioned there's a researcher at stanford who's a wonderful researcher and at one point he asked the debt collection agency to let him help take part in their training. and what he found was when they would train debt collectors when someone gets on the phone and they tell you owe them money, get them angry and get them in a fit, and then calmly say let's find a resolution. you want a resolution, that good anger to lead to a catharsis, and i think take advantage of that. and that's exactly what's

happening right now with president trump or political cob su su consultitants on both sides of the aisle. they know this perpetual rage will propel us into the voting booth, propel us to donate money, but it won't necessarily make us happier. >> so what does research tell us about how you can end the cycle of uncontrolled anger? >> there's studies that come out of israel, and israel is an interesting place because they have been living with anger for many years. and the conventional wisdom how you resolve this is something called the contact hypothesis, which basically said if you take people who are angry at each other and put them in a room together and allow them to speak civilly, they'll eventually get along. and researchers said anyone who's been to jerusalem, that

theory doesn't work. they started putting up these ads, and these ads instead said you should be more angry. they would say things like without war we cannot have heroes, so we need more wars to create heroes. without battles we can't prove that we're moral, so it's good to have battles to prove we're moral. things that were outrageous and extreme but the citizens of that suburb didn't see them as extreme. what they saw them as were these extremist distasteful ads. what they found was after putting up those ads for about six weeks, six months later the most right wing members of that community were actually much more tolerant. it takes a recognition that this anger has become a burden, it's leading us to a bad place. there's been a celebration of anger. but what we need to recognize is

there is that light in the sand. there's that moral outrage that leads the process and there's desire for retribution and vengeance, and that hurts people. if you point that out and say, look, you know that it feels bad to cheer for someone else's moisture mismmi misfortune, listen to that extinct. embrace the good anger but turn your back on the rage and destructive. >> it's a fascinating set of research you point to. >> thank you so much. next on gps, are we on the verge of recession? and if so, how will the united states fare? it is something my next guest is very worried about. he is someone you'll want to listen to. the founder of the world's largest hedge fund in a moment.

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the volatility in stock markets has caused many people to wonder are we on the brink of another recession? many economists believe we are due for one. the u.s. economy has been growing for 114 months making this nearly the longest expansion in history. many are already in place. my next guest sees that as a big problem, especially when you throw into the mix the current political climate in the world. ray dahlia is founder of the world's largest hedge fund and also the author of "the principles for navigating the big debt crises." your concern is we already have a lot of debt and we are in

economic good times. when the times get tougher usually what happens is you take on more debt and the central bank lowers interest rates. but we don't have that much room to maneuver, is that what you're saying? >> that's correct. at the same time as we have populism, we have more conflict internally, and we're having more conflict externally than we used to. the idea of populism is there's a disenfranchised population. basically for a large percentage of the population that wealth gap, which is very similar to the '30s, the top 0.10 is equal to the bottom 30% combined. that causes populism. populism, which we're seeing pervasive around the world means a strong individual can get control of that and then you have more nationalism, you have

more militarism, you have those types of things. and then you have conflict externally. we have in the form of china, a competitor, a rising competitor. and that creates also external tensions on the game of who's going to be the world power. >> let's talk about that because i know you focus a lot of your thinking about this. what kind of competitor is china for the united states? how should we think about it? >> i think that china economically is about the same size as the united states right now. it's a larger percentage of world trade. it is a rival, a competitor certainly in technology. and because their growth rate is faster than u.s. growth rate, it'll be bigger than the united states. and then there are -- so there's competition. competition means conflict. we use the term war.

my concern is that the war, whether we're talking or we're d war or a hot war is an exchange of harms. one to another. in other words, it's a process in which -- >> we promised them and they promised us. >> that back and forth of i will harm you until you give in and you go back and forth is to me a dangerous path. >> it seems to me what you are describing is you are concerned we are at a fundamental inflection point. you have a circumstance where we have a lot of debt and may go into a recession and you might have to take on more debt. the world might be deglobalizing and supply chains might be delinking and there might be trait conflict and we are not in an atmosphere of corporation domestically or internationally. >> we created a conflict and

various ways of measuring conflicts and the conflict gauge now is the highest since the war years. the internal company. >> since world war ii. >> yeah. there is more polarity, more conflict internally of a sort. it's not strikes. it's not em stations. it has to do with decision making and the nature of that decision making and the differences in values. that kind of conflict. >> the polarization. >> the polarization and the nature of things like crossing the party lines and bipartisan. that's not just for the united states. if you look at brazil and mexico and if you look at many countries right now and worldwide, you see that there is more political extremism and less compromise.

that type of conflict. >> all of that translates negatively for the economy. >> it's a negative for the economy and i would rather the word negotiation be used than the word war be used. >> pleasure to have you on. >> thank you for having me. >> we will be back. ♪ bring all the gifts for under the tree and while you're at it... bring the tree. ford f-150 best-in-class payload. best-in-class towing. built for the holidays. bring home the f-150 with zero percent financing for 72 months. only at your ford dealer.

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>> the french philosopher said there is more power in rock music, videos, and blue jeans than in the entire red army. he was not the only 1 to see the strength of symbols. that brings me to my question. what item of clothing have egyptian authorities restricted sales of this week? skinny jeans, scarves, yellow safety vests or leather jackets. we will tell you the correct answer. my book of the week is cultural evolution. if you notice people seem to be voting more on cultural identity than economic ones, this book explains that powerful trent better than any other i have read. now for the last look. as we near the end of 2018, it's easy to reflect on events of the year and worry about the state

of constant chaos. >> gridlock, chaos. >> total disaster. everything is going wrong. >> area where everything is not going wrong. the global fight against terror. for the third year in a row, deaths have terrorism have fallen. the new report for economics and peace. the number of deaths from terrorism around the world in 2017 dropped 27% from the prior year to 18,814. to put this in perspective, that number was less than half the number of firearm deaths including suicides in just the united states that same year according to the cdc. they reached the lowest attack in four years. terror from extreme far right groups.

deaths related to far right terrorists increased in north america and western europe. most were carried out by far right nationalist or anti-muslim beliefs. this is a reminder to celebrate the global improvements and continuing to e main vigilant. 169 terrorist groups responsible for deaths in 2017. 42 were new groups that have not caused deaths in prior years. the answer to my challenge is c, yellow safety vests. they have been subject to sales restrictions as the government frets over copycat protests leading up to the eighth anniversary of the overthrow during the arab spring. the bbc reports they have quietly instructed safety

equipment dealers to report customers who try to buy the garment and the dealers may only sell to verified companies with police approval. thanks to all of you for being part of my program this week. see you next week. >> good afternoon. thanks for joining me. i'm here for freddic with whitfield. president trump angry and on the attack as legal threats swirl around him. nearly every aspect of his life under investigation. take a look at this. family members, inner circle, his campaign and administration and the list goes on and on. now we are bracing for the next russia probe revelation that has to do with adviser michael flynn who will learn his fate. his early cooperation helped give prosecutors a road map for the investigation. as the president continues to