this is "gps" the mobile public square. welcome to all of you around the united states and the world. i'm fareed zakaria. >> today on the show, trump gets tough on china. >> we won't back down until china stops cheating workers and stealing jobs. >> and iran. >> will it benefit america in the end? i have a policy panel to discuss. then to save facebook and

the world we have to strip the social media giant apart. that is the surprising opinion of one of facebook's co-founders, chris hughes. i'll ask him all about it. and the race to dominate the arctic. who is winning and who is lagging far behind? find out later. but first, here is my take. it's graduation season in america and a good time to be leaving college and looking for a job. despite this week's stock market tremors, the american economy is on solid footing in the 120th month of expansion, there are few signs of bubbles about to burst. unemployment is way down, inflation is contained, wages are finally moving up. perhaps the most significantly productivity is up. some of the trend might prove

ephemeral, but no denying economics are firmly positive. these good numbers are unlikely to change another set of numbers regarding the geography of growth. i was honored to be the commencement speaker at ohio state university last weekend and i predicted graduates looking for a job would get one in a city. i cited research by brookings who calculated that over the last decade, the 53 largest american metro areas accounted for 71% of all population growth, two-thirds of all employment growth and a staggering three-quarters of all economic growth. half of all job growth in the united states took place in just 20 cities. meanwhile, small towns in rural america have lost residents and contributed barrel anything to economic growth. this two-track economy has of course produced a two-track culture with rural americans increasingly living in their own distinct worlds of news,

entertainment and consumer goods. they live different lives and disagree deeply about politics, a trend reflective in washington. as measured by voting records, congress is now more polarized than previous historical highs in the aftermath of reconstruction. so why is this happening? well, the economic trends are easier to explain having to do with the digital revolution and globalization, brain work is more valuable, brawn work less so. the cultural forces have to do with the rise of identities, politics and a backlash against multi cultural society and immigration. so we see the forces that are pulling america apart. the question we should be focused on is what can we do to bring the country together? surely, this has become the question of our times. one answer that i've been increasingly drawn to is national service. i was heartened to see two democratic presidential candidates who endorsed it. there are many ways to design a national service program, a

voluntary system will probably work better with strong incentives like loan forgiveness and tuition support at the core. a study argued current programs could be skilled up to 1 million volunteers without taking jobs from existing workers, yielding societal benefits worth more than four times the cost of the program and the programs that operate in the space amricore, 94% say they gained a better understanding of different communities. 80% say the program helped their careers. as it was noted in 1992 book, john f. kennedy, the rich graduate of harvard famously served in world war ii on a boat alongside men who held jobs like mechanic, factory worker, truck driver and fisherman. imagine if in today's america, the sons and daughters of hedge fund managers and bankers spent

a year with the children of coal miners and farmers working in public schools, on national parks or the armed forces. national service will not solve all of america's problems, but it might just help bring us together as a nation, and that is the crucial first step forward for more go to cnn.com/fareed and read my and let's get started. ♪ there's lots of foreign policy news this week and i have the perfect panel to talk about it, former top officials at the state department. william burns had a 33-year diplomatic career that cull culminated as the secretary of state under president obama. during his time in that post, he led the then secret negotiations with iran. his book is "the back channel" a memoir of american dip low si

and the case for its renewal. richard was the state department's director of policy planning under george w. bush. also worked under bush 43, she under secretary of state for global affairs and senior fellow at future of diplomacy at harvard's kennedy school. welcome all. bill, let me ask you how should we view the trump administration's new sanctions on iran, all of which seems really designed to squeeze the country to what end? >> i mean, i think the trump administration seems to me is making a very risky bet and that is that you can employ diplomacy all about coercion and not about diplomacy. the president himself says what he's interested in is a better deal but the facts suggest

something else, his administration is aiming at the implosion or the capitulation of this regime. neither of which are realistic aims. that carries with it, i think, real dangers of escalation where the trump administration and hard liners in the iranian regime, of which there's no shortage, become mutual enablers, climbing up a ladder. >> paula, it's fair to say that the sanctions have bitten. i mean, the iranian economy is reeling. >> absolutely. in fact, i think that's what is the underlining success here, they are showing results. not only the primary sanctions and the secondary but the new sanctions focused on the metal industry, which is also an important source of revenue for iran. but you take a look at it, what are the results you have foreign companies that have left iran, a

foreign revenue dropped, oil exports have dropped from 2.5 million barrels a day to under 1 million. in terms of also just iran's own ability to exercise and engage in its terrorist network and support the terrorist network is severely constrained. i think these sanctions combined with diplomacy, which is what the administration is seeking to do i think is what is going to push it in the right direction and achieve that maximum pressure in order to get results. >> what are the results they are looking for, though? >> the only results they are looking for if you listen to the secretary of state are such fundamental policy changes it's tantamount to regime change. bill is closer to the truth here than paula. ist more coercion than diplomacy. it would be one thing if the

administration said we'd be prepared to relieve you on sanctions or enter a modified nuclear deal or expanded to include missiles and if for example, if we we extended some of the so-called sunset provisions, these limits on iran that are scheduled to expire and if you put together that diplomatic package, my sense is the europeans would sign on to it and you could have something that looks like diplomacy but at the moment what you have is the administration trying to grind iran down. they are achieving economic results but this regime isn't going anywhere and this regime we shouldn't forget has any number of ways to push back. they are talking about getting out of the nuclear deal. they could get out of the nuclear non-proliferation treaty and go after american troops in iraq. they could escalate. iran has a lot of tools, cyber, terrorism, military, diplomatic. we should not underestimate them. >> bill, the thing i worry about is the it's the use of the american unilateral part and use of the dollar and no other

country has joined in this set of sanctions. they are abiding by the iran nuclear deal but turns out it doesn't matter because the dollar is so powerful, if all international transactions have to go through the new york fed because the americans have sanctions but that the leading people in europe and china and russia to say should we have an alternative to the dollar? >> no, i think there is a lot of collateral damage in this part. part is a retreat from agreements. not just the iran nuclear agreement, a series, part of it is deepening the fissure between us and our closest european allies to include putin's work for him. a third factor is what you said, fareed, over time, this won't happen overnight, eroding the utility of sanctions as an instrument of american diplomacy. we vbt always used it wisely. it sometimes a very effective tool. we'll wake up a few years from now and find russians and

chinese and european allies have taken steps to reduce their vulnerability of the american financial system. >> paula, last word on this? >> well, as we know, the deal before had it significant flaws. ballistic missile deployment, that area was not addressed and then no less, the kind of aggressive behavior that the iranians have pursued through proxies. these kinds of things have to be accounted for but seems to me the recent steps taken by secretary pompeo in particular, he was in europe meeting with the brits, he's going to moscow. i think there is active diplomacy taking place here and no less with the countries of the middle east who are gravely concerned about iran's actions. i think the bottom line here is let's try to go forward with an agreement that really is going to correct some of the egregious actions under taken by the iranians.

if they are not corrected, they will persist. >> don't go away. when we come back, china, is there any other option between a conflict between these two super powers? we'll discuss it when we come back. forget about vacuuming for weeks. the (new) roomba i7+ with clean base automatic dirt disposal empties the roomba bin for you. so dirt is off your hands. if it's not from irobot, it's not a roomba. it's how we care for our patients-

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a safelite chip repair is no cost to you. >> mom: really? drive safely. all right. ♪ acoustic music >> singers: ♪ safelite repair, ♪ safelite replace. we are back with our panel, richard, china, a lot of people that don't support donald trump on many things think he's right to get tough with china, that the chinese have been cheating on trade. is this the right approach? >> i think it fair to say he's right to call china out on trade. china was gaming essentially participation in the world trade

organization over the last nearly two decades. what i think is questionable are some of our specific goals, some of them are overly ambitious. little chance we'll get them to stop state subsidies, large state enterprises. we can get them to do more purchases of american exports and drop tariff and non-tariff barriers on technology, the biggest problem is implementation. they will agree not to steal american technology but the fact is at times they will. by what they learn through students and investment in this country or the fact certain things will be carried over the internet and the chinese will figure ways of getting it out. the choice for us, i think, is whether we're willing to take half a loaf here and there is a pattern here, fareed. we're talking about iran and north korea and this administration has to decide whether it is going to demand that other countries capitulate and give us 100% of what we want or whether we're prepared to

make compromises. essentially, whether they are willing to embrace diplomacy. >> paula, let me ask you as a conservative republican, i thought that the republican party was in favor of free trade that it believed tariffs are another form of taxes, that consumers have to pay mightily for these and if you look at the numbers, it's absolutely clear there are huge prices to pay for this. is it worth it? >> you were quite right in saying that in terms of tariffs, i think that traditionally republicans have favored, of course, you know, not imposing a tariff. so here i think the issue is this was used and i think administration was right to use this as a tool to get the negotiators back to the table to have a corrected course and i also think what's being used here is to try to get chinese compliance as we know from administration to

administration, it's been very frustrating and there is strong bipartisan support as you suggested to correct this course once and for all. so actually, by having tariffs in place, you can make the case that it can provide some strong compliance by the chinese side and an incentive for them to comply. finally, for the longer term, no, tariffs i would think that one would not -- would want to not have tariffs in place, that's -- they should be reduced if not eliminated but they are a tool being used for negotiation at this time. >> let me ask you because i want to make sure we get to this, the north korea. they're casting missiles again. have the neglect shanss with north korea failed? were they doomed to fail? >> i think kim jong-un has made clear he has no intention of

fully denuke larizing. the practical question is what can we do to do to reduce the dangers to preserve the aspirational goal and worth taking a look at the experience nuclear negotiations. after the secret talks through 2013 with our international partners, we reached an interim agreement that froze the iranian nuclear program and rolled it back in significant respects imposed quite tight verification and monitoring procedures, in return for very limited sanctions relief. preserving the bulk of that leverage for the later comprehensive talks. the two situations are obviously not perfectly analogous. iran then doesn't today with nuclear weapons and north koreans have dozens and expanding capacity to make more but i think that logic of trying to make a tangible achievement through diplomacy backed up by real economic leverage is a practical goal. that would mean setting aside first, you know, love letters

and exclusive focus of -- on narcissism. >> richard, it is fair, isn't it, this wasn't an exercise in narcissim. trump decided this was his path, the noble peace prize. -- nobel peace prize. this is why he first hyped up the threat. we were on the verge of war and hope to say and i alone was able to bring us back from the brink. none of that has panned out. >> there is a pattern here and every one of these cases we're talking about as well as several others, the president articulates incredibly expansive goals to get rid of this government, to get rid of nuclear weapons altogether, to change an economic model. the means are almost always the same. rhetoric and sanctions. some version of tariffs, we put economic pressure, interestingly enough what is missing from some situations is any real desire to use military force.

i'm not at advocating it. we're asking way too much of economic instruments and aiming for things that are simply too ambitious. what is missing a is serious use of diplomacy. we'll give something to get something. you don't solve problems that way but you put a cap on them and manage them and in many cases that's preferable to drift. >> fascinating conversation. we could go on but we have to leave. thank you, next on "gps" my next guest says mark zuckerberg's influence is beyond anything else in the private sector and government and this guest should know, chris hughes co-founded facebook. hughes says facebook must be split up. ♪ applebee's bigger, bolder grill combos. now that's eatin good in the neighborhood. onmillionth order.r. ♪

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my next guest says facebook is too big. mark zuckerberg is too powerful and the company needs to be split up. you might expect that from elizabeth warren that would probably not expect such ideas from the co-founder of facebook, chris hughes but he put that forth in an opinion piece entitled, it time to break up faish facebook. and chris hughes who was zuckerberg's roommate at harvard joins me now. >> let get right to the chase. the biggest argument against your position is that facebook provides services for free to people. and when people choose to use facebook, whatsapp, instagram, they are voluntarily ceding that

privacy. they know facebook is using it and they are accepting the idea they get an incredible free service they like, facebook, instra -- instagram, for allowing facebook to use their data. that the the free market. >> it's not right for two reasons. first off, users do pay quite a bit to use facebook. they don't pay with dollars but they pay with data and with their attention. the average users on the site on facebook for an hour a day, an instagram for 53 minutes and providing immense amounts of data not just on the apps but as we move around the web that gets consolidated into our facebook profile. there is a lot of data and attention going into it and it also not true because the space is so locked down. facebook is such a strong monopoly, there is no alternative. it's not like there is a choice people could go elsewhere and pay to use another social network that doesn't collect as

much data on them or provide targeted advertising. facebook is all of social networking because it owns facebook.com, instagram, and whatsapp. without any kind of competition, there is no accountability. >> but again, what the defenders will say is yeah, but you wouldn't have had whatsapp, which is free messaging for large parts of the world without, you know, facebook can afford to take, extend the reach of these programs because it has this dominant position. again, this is the market at work, people are choosing it. >> there are other things to choose from, that would be true. i don't think there are in the social networking space. i think whatsapp is a good example of a company that serves, i think billions of people now and still has somewhat small staff and, you know, the founder of whatsapp, too, left the company and brian called to delete facebook as well. the founders of instagram

have left the company and have not spoken out yet. there is a sense facebook acquired these companies is pulling them into the mother ship and stifling competition. everywhere it can. >> in a way, your approach to anti-trust, the government theory of government that breaks up monopolies is a little different than the way we've been operating for 30 or 40 years. ever since robert bourque wrote a book in the 1970s, people said as long as the consumer benefits from a lower priced product, any degree of consolidated power is okay and you're saying no. >> the long history of anti trust is it's a way of holding businesses that have gotten too big and too powerful accountable. it built on the same principle of checks and balances our founders outlined in the constitution for the different branch chs of iowe branchs of government but for

the private sector, as well. from the 1890s until the 1970s, anti trust practice was a check on the large powerful companies that had effectively frozen markets, that were preventing competition from doing its thing. that took a different direction in the 1980s because of the bourque revolution to a more narrow standard where we focus often really intensely on price gouging. i think that clouds judgment. if we take a step back, we want capitalism for work. we want things to be competitive and fair. sometimes government has to step in when a single company gets too big and too powerful. this is not just a facebook problem. three-quarters of american industries have become more concentrated over the past 20 years. it rental cars, beer, pharmaceuticals, airlines. we can go through the list. facebook is one that just about everybody is familiar with because they use it but not only facebook.

>> your biggest concern you say in the piece is the degree to which mark zuckerberg has almost total control over what information we all read about access. >> yeah, he, you know, the way that facebook is structured as a company, mark, the ceo there is a board but because he owns 60% of the voting shares, he's not accountable. it works like a board of advisors than anything else. he's not really accountable to users and thus far not been accountable to government. so one thing i don't spend time on in the piece but is important is that we can approach corporate government governance differently. there is a lot of folks who call for thinking about making sure that boards have a responsibility not just to the bottom line but customers, to suppliers, to the environment, kind of global responsibility, which again, was what it was like in the '50s and '60s before

the revolution over the past few years. so i think that kind of thinking when applied to facebook would immediately bring accountability to the company, or if the ftc broke up the company or if there were meaningful privacy regulation, that, too, would bring accountability. the world we're in right now is one where i do think mark zuckerberg has too much power. near unilateral power. >> now this is not just a professional argument for you, this is personal, in fact, you begin the piece by pointing out you last saw zuckerberg, your college roommate in 2017 and you describe as a meeting among old friends, kind of a reunion. has he contacted you since the piece is out? >> no, i haven't spoken to him. >> do you think this is the end of the friendship? >> when i wrote the piece i had to come to terms that it likelihood is. i hold no ill will towards him personally as i say in the

piece. he's trying his hardest. he's human. we're all human. we all make mistakes but i think that in his case, it is different because there is no accountability for those mistakes. so in writing the piece, i came to a place where i said, you know, i will probably lose a friend or maybe more over it, but in this case, it's worth it. i think this argument is important. facebook is too big and it something 2.4 billion people use. that said, there are some friendships where you can disagree about things, important things and maybe we have one of those. i don't know. only time will tell. >> chris hughes, pleasure to have you on. >> thanks for having me. >> next on gps, the arctic gold rush. there is a race for the spoils. i will tell you who the winners and losers are when we come back. etsy is the place to find new favorites.

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new opportunities for trade. >> that was mike pompeo at a meeting this week in finland of the arctic council, a body of eight arctic nations. pompeo is right, he just refused to mention the culprit, climate change. several outlets reported the trump administration blocked the group from mentioning climate change in the joint declaration. a charge the state department denied. nevertheless, global warming is raising temperatures around the polar north twice as fast as the rest of the earth and it's decimating the icecap. arctic ice is melting by 13% a decade since 1979. from 1980 to 2018, the size of the icecap shrank by 42%. the head of the wilson center polar institute puts it this way, climate change is literally opening up a new ocean. let me be clear here unlike secretary pompeo, global warming

is disastrous but since the ice is melting, it produces opportunities. the great thaw is creating maritime highways including the northern sea route extending from north of russia to asia. that route would be 40% faster than going through the suez canal. as the story notes, this has spurred a new competition as the world's powers race for domination. the danish shipping company had a trial voyage and chinese ships supplied the route. china published a paper it stressed the importance of polar silk road. we're still a long way from the northern sea route replacing the suez canal, but if the sea route did become economically viable, the biggest beneficiary could be the country that controls its waters, and that is russia. of all the arctic countries, russia has the most at stake in

the region. one-fifth of the land mass is inside the arctic circle. 30% of the gdp comes from the arctic and natural gas there and for years, russia is pouring money into the northern waters. russia has the largest fleet of arctic ice breakers in the world, more than 40 including the world's only fleet of nuclear ice breakers, these vessels are essential to navigating the ocean there and president putin vowed to build even more in the coming years. russia has built or upgraded seven army bases in the arctic since 2013. and how is the united states faring in this race? sadly, it has long failed to act on this trend. it has just two ageing ice breakers, though in february they funded to build one after years of delay. it will be ready in 2024 and represent as fraction of what the u.s. actually needs. maybe pompeo's comments signal

that the government is finally looking seriously at the arctic. one does wonder whether the refusal to acknowledge global warming has led to a delay in reacting to opportunities presented by that reality. next on gps. the man that predicted the 2008 financial crisis and predicted what would cause it. when will the next crisis hit? next on the agenda. priceline will partner with even more vegas hotels to turn their available rooms into amazing deals. ladies' weekend delegates, how do you vote? (wild cheering) just going to count that as a yes. the nightclub djs? (music plays) sample: yes... y-y-y-yes... can you just... turn that down? and magician delegates, how do you vote? ( ♪ ) that is freaky. the motion passes! more great deals from priceline. that is freaky. the motion passes! (michelle) i know what it's like to be in a financially struggling family. we had a lot of leftovers...[chuckles]

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he has held a series of top jobs in the field of economics. he's been the governor of the bank of indiana, chief economist of the international monetary fund but best known around the world for a prediction he made. in 2005 he presented a paper that foretold the coming financial crisis and the reasons for it. and the complexities created the risk of a catastrophic meltdown. few on wall street or washington chose to believe it. we should listen to him now and read the latest book, how markets and the state leave the community behind. pleasure to have you on. >> thanks for having me. >> first, you have to tell us as the man who very famously predicted the crisis of '07 and '08, the global financial crisis when everyone else was

celebrating the stability of the system, do you worry now it been a long time, interest rates have been very low, people say, as a result, things like stocks have gone up, perhaps too much. do you worry that there is another crisis coming? >> there will be a crisis coming. the question is approximate when of the clearly, what's happened after the financial global crisis, we've built up an enormous amount of debt. not in the same places as earlier. in different places. >> government, used to be corporations, now it's government. >> actually, move from households in the u.s. to corporations. some other countries for example, china is corporations and government entities but across the world, we build it up. now, when growth slows, there will be a price to pay. is that price going to be as much as we paid the last time? probably not. but, you know, the jury is out. it not in the same place so we

won't have a banking crisis, banks are much better today than before but could be elsewhere. >> your book, which i find fascinating, you talk about a hidden dimension, forgotten dimension. you talk about the market and the state. and you say the market has been allowed to do a lot of work. the state has been allowed to do a lot of work in society but one thing got left behind, what is it? >> it is the community. that's what i talk about in my book. what you see over 30 years, we had a tremendous technology revolution. markets have grown across the world. interestingly, the state has gone along with it. most think that governments and markets are opposed, no, they feed on each other. we have bigger and bigger government to govern the bigger and bigger market and increasingly more and more powers have moved out of the community into the national level and from the national level to the international level. now what tech does is

disempowers the community. that is also problematic because the forces of trade, of technological change are hitting different areas very differently. new york, doing fantastically. san francisco, doing very well. they're servicing a global market. steel city, illinois, not doing so well. because the main manufacturing firms have gone out of business. there's very little employment. we have to figure out how to get employment there. that's a community issue. >> so what i love about what you're describing is it really captures that reality that you look at a town in ohio or illinois and the jobs that steel mills went away because of the market. it was more efficient to make it in south korea or china or because of technology. government came in and there is because of unemployment ensure -- insurance or because of government workers. the only employment tends to be

hospitals or government employment. what went away were the little shops, the mom and pops that maybe amazon got rid of and the steel factories. and so the community has withered. it has withered. the change, the change is always taking place. big difference now is that people feared not only that they don't have opportunity in this new world but their children don't have opportunity. because what technological change demands is higher and higher skills from people, which means you need a really good school. who provides the school the community provides a strong school. you need that school to get to the university otherwise you spend many years building up end up not actually going to the university and graduating because you're simply not prepared for it. how to start at the beginning. >> how did you strengthen community? it sounds so intuitive, but it must be hard.

there's a reason the communities have collapsed. >> i talk about a community in chicago, pilsen, the big problem was crime. the murder rate was higher than the death rate of soldiers. in world war ii in the 1980s, they decide we need to fix crime first before we get economic activity. whenever crime happened, the residents flood out on the streets to crowd out the crime. so, you know, the visibility, the transparency of having people around stopped the criminals and over time, they started building up more economic activity. now it a place people maybe want to move into because it's so flourishing. their problem now is the rents are going up because new people are flooding in but it's been a -- better problem to have. i don't want to venture out in the streets because i might get shot. >> terrific book. pleasure to have you on. >> thank you very much. >> we'll be back. our experts go beyond the numbers to examine investment opportunities firsthand.

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which sitting dynasty has reigned the longest? britain's house of windsor, the imperial house of japan, thailand's chakri dynasty or britain's house of wangchuk. my book of the week is "world without mind." sharply written and sharply argued this, book will make you think even when you disagree with it. now for the last look. i began the show today with advice for students about to graduate. let me close by remembering the students who never will, like kendrick castillo, a senior just three days from graduation who was killed this week when he confronted a shooter at a s.t.e.m. school in colorado. the school is seven miles from columbine high school where 20 years ago two teen gunmen massacred 13 people. that shooting shook america to

its core, but to this day little has been done about this uniquely american problem. a cnn study published last year found that since 2009 the u.s. has experienced 57 times as many school shootings as six other major industrial nations combined. this academic year alone there have been 23 shootings at least. of course, it's not just schools, from churches to night clubs, america has a mass shooting problem, and sadly those incidents are just a tiny fraction of u.s. gun deaths. every day on average more than 100 people in america are killed or take their own lives with a gun. what makes america different? other countries have mental health approximate, they have violent entertainment, but only we have absurdly lax gun laws. i've said before it is a government's first duty to keep its citizens, especially its

children safe. we know how to fulfill this basic mandate, and it is well past the time to do just that. the answer to my gps challenge this week is b, the imperial house of japan has reigned over the archipelago uninterrupted for over 1,400 years. the longest reigning individual monarch alive is queen elizabeth who ascended to the throne 67 years ago. she took the record from rama after reigning in thailand for seven decade, his was the longest ever recorded and all of this makes fdr's 12 years in power look like the blink of an eye. thanks for being part of my program this week. i will see you next week. and hit the town with these girls. in a clinical study, 4 out of 5 users felt better joint comfort. move free ultra. movement keeps us connected. this year, ancestry isn't celebrating mother's day.

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morning. what are you doing? isn't it obvious? nah. we're delivering live market coverage and offering expert analysis completely free. we're helping you make sense of the markets without cable or a subscription from anywhere you are. i get that. but what are you doing here? nice pajamas. really? i say pajamas. pajamas, pajamas, whichever. good. yahoo finance live. stream free anywhere. welcome to the show. let's make finance make sense. who's already won three cars,

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only roomba uses 2 multi-surface rubber brushes to grab and remove pet hair. and the roomba filter captures 99% of dog and cat allergens. if it's not from irobot, it's not a roomba. hello, everyone. thanks so much for joining me this sunday. i'm fredericka whitfield. happy mother's day. we begin this hour with the mounting showdown between democrats in congress and the trump administration as the white house faces another critical week of subpoenas and document deadlines. the president and his allies are facing off with house democrats over dozens of investigations into the actions of the president, and as "the washington post" is reporting today, trump and hits allies are blocking more than 20 separate democratic probes in an all-out war with congress in what many experts are calling the most expansive white hou