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this is "gps", the global public square. welcome to all of you around the world. i'm fareed zakaria coming to you from new york. today on the program, we'll bring you the latest on the suspected chinese spy balloon. then, we'll move to the economy. but for a change, it might not be bad news. >> we have some very good news about the american economy. >> the imf global outlook is less gloomy than it was a few months ago. and then the fed said it wasn't ready to declare victory on inflation, but it is cooling. i will ask larry summers if he

agrees. also, crimea, many powerful people have suggested ukraine should be prepared to officially cede the peninsula to russia as part of peace negotiations. but i'll talk to general ben hodges who said no, he can and should take crimea back. but, here is my take. this week marked the third anniversary of brexit and it coincided with a grim verdict from the imf. this year the british economy will do worse than all of the world's major economies including russia. the 2016 vote to leave the european union marked the start of the wave of populism that has been coursing through much of the western world ever since. it was a decision by a major country to consciously choose to have poorer economic relations

with its largest market. the european union takes in about 42% of british exports. british voters put nationalism and politics above economics. on virtually every measure, from business investment to exports, to employment, britain is falling behind its peers. the think tank scholar john frankfort said if you imposed barriers to trade, with your biggest trading partner, then you're going to have quite a bill hit to trade volumes and to investment and gdp. everywhere you look, britain is feeling the pinch. from a shortage of workers and small companies struggling and to reduce traffic on the train between britain and europe. bloomberg economic estimates that british gdp would be 4%

higher had it stayed in the european union. britains know they were conned. according to one survey, a clear majority now believe that leaving the european union was a bad idea and almost two-thirds want a future referendum on rejoining. the current prime minister was a brexiter himself and continues to mouth about its virtues while he faces a series of crises that have been generated by brexit. even now britain has not resolved how it will handle the border in northern island which could further derail economic growth. ever since the global financial crisis of 2008, british productivity has never recovered. austerity made things worse as tori government widened equality and heightening general anxiety. as always, when times get tough, it is easy to blame foreigners

and politicians like boris johnson did just that. promising that brexit would cure all of the evils that would face the country and even lying about the cost and benefits. johnson fantasy of a global britain that once unshackled by brexit would be a singapore on tems have gone nowhere. they spend more on the welfare state and faces strikes across many crucial sectors and experiencing deepening wage stagnation. according to the financial times reporter john murdoch, if things finish this way, the average british family will be poorer than the average slovenia family by the end of the next year. i've heard from margaret thatcher through david cameron. they varied in political philosophy but all had a conception of britain's role in the world.

they though acknowledged it would never be the superpower of the united states or china, they viewed it as an engaged global player that cared deeply about the world. with the biggest economies, it enjoyed special status thanks to the u.n. veto and close relations with washington and impressive armed forces and a long tradition of generating ideas on global issues rooted in the legacy as a liberal country with deep historical ties around the world. it was a voice that was heard everywhere and listened to seriously. but over the last decade, defense spending has stagnated while funds for the bbc have been cut in real terms. with brexit, even the rhetoric about a larger role collapsed as politicians ran away from anything that seems too global. now british prime ministers rarely speak to the

international press and when they do, they have nothing to say. britain has become a middling island nation, isolated off the coast of europe without the heft to matter on its own or to set the agenda in its partnerships. washington has little time for a country that is not even part of the european union. as journalist neil asherson once fears, great britain has become little england. there is a remedy that would restore british growth and shape a new world of great power competition. it would have required that britain return to the european union. rishi sunak is looking for a way to turn britain's fortunes around. he has the solution staring him in the face, he just needs the courage to grab it. go to cnn.com/fareed to a link to my washington post column this week. and let's get started. ♪

the big white balloon that captured the american public's attention was first noticed by the u.s. military last saturday as it was filing over alaska. on thursday when the overflight of the suspected chinese spy apparatus was made public by the pentagon, the balloon became a political hot potato. the burning question to shoot it down or not. the answer came saturday afternoon when some of america's most powerful stealth fighters, f-22s met the balloon off the coast of the carolinas and took it down with a single side winder missile. china's foreign ministry responded with strong dissatisfaction and protest. a day earlier secretary of state tony blinken had postponed a planned trip to china. joining me to talk about all this is phil mudd, who had top roles in both the cia and the fbi. phil, welcome.

what do you make of this incident? >> boy, on a scale of one two ten on national security issues, i'll politely give it about a two. this says a lot more about the inability of washington and congress and the white house to talk about relatively insignificant national security issues than it does about intelligence. look, if the chinese want to collect photos of america, you could get to google earth, you could get a chinese secret satellite. and i would agree there are certain advantages a balloon would have. but, fareed, we twisted ourselves around a balloon and the secretary of state canceled a trip for a balloon. give me a break. this is a two on a scale of one to ten. >> and it does strike me like the line in casa blanca, we're shocked to discover the chinese spy on us. we spy on them all of the time. we have the largest spy apparatus in the world.

should we be -- i -- it makes me think there is a broader issue. we need to recognize that china is the second largest economy in the world. it is going to spy on it the way lots of other countries do. >> well i think what we need to recognize is that typically in the past, you go back 20, 30, 40, 50 years when the conversations in the white house, the politics stops at the shores. the conversation should not be about a potential threat to china. the fbi should be able to evaluate with that balloon collected. the conversation should be why can't the white house sit down with congress and say look what are we going to do about this and can't the white house just say we will shoot it down. which they might have done. and one more thing, there is an interesting that the chinese didn't anticipate and how could they think in the future about doing things like balloons that

distract america and in terms of national security issues. i think it is a really interesting opportunity for the chinese to evaluate the american political response, fareed. >> what you seem to be implying is that you think that the administration acted as it did because they felt pressure not from the chinese but really from kevin mccarthy and ted cruz and marco rubio. >> i think, in the end, they would have shot it down any way. along the way, instead of all of the front page news about republicans suggesting that the white house was weak on this, that the two sides should have just spoken. i think there is an opportunity in letting the balloon go. for example, i'm sure the intel guys were trying to collect on how that balloon was collecting on. but when you shoot it down, you should be able to look at things at the optics in the equipment to figure out what the chinese

were up to. just don't think it is a big deal. i think the political issue is more interesting. >> this reminds me of the dubai ports controversy which you will remember. in 2006, dubai company was taking over the leasing of l.a. port and we had massive collective freakout. didn't allow it to happen. and of course meanwhile, people probably don't know, but the port of delaware is currently run by another dubai company. it feels like a spasm that goes through the system. >> it does. i think as a bit of an aside, one of the reasons that you're getting that in this case is because in terms of u.s. media, you have a visual. americans could look up and see a balloon. media across the country including cnn gets to show you a balloon. it is not like a satellite that you can't see or somebody at an embassy collecting for the chinese, it is a captivating story because it looks like a spy movie. >> the administration put out the fact that three such balloons crossed the united states during trump's presidency.

as a way of humiliating trump because he said we should shoot it down. urging people in montana to take their own muskets and shoot it down. but of course, it also points out that the administration, by that very fact, suggests the administration overreacted because if this has been happening in the past, why was this the one time had to be done. this seems the ultimate cnn effect, where it is the visual identification that was the controversy or the scandal, not the fact of the balloon. >> i agree. and i suspect one of the reasons that you saw those previous flights go by is that, a, the intel was telling the president, if they have a conversation, that this was not a huge deal. but as i said earlier, i would see this as an opportunity for the americans which most people aren't talking about. when this balloon is up, it is communicating back to china and data and a sense of what the chinese are collecting on and

what they're interested in. as an intel guy, that is something i want to know. so it is a collection opportunity for the americans. not only for the chinese. >> always so interesting to talk to you, phil. thank you so much. >> thank you. see you. next on "gps", america's unemployment rate has not been this low since 1969, the year of woodstock and the moon landing. what do we make of that? former treasury secretary larry summers will help us understand the big picture of the u.s. economy in a moment. i'm off to america's best i heard what you said about not overpaying for glasses. two pairs and a free, quality eye exam starting at just $79.95? the exam alone is worth... 59 bucks. i mean, people deserve breaks, right? yeah, brakes...! [out of control] book an exam today at americasbest.com. there's nothing like hitting the waves. there's nothing like volunteering. but my moderate-to-severe eczema can make it hard.

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that came after the federal reserve once again hiked interest rates this week. but less aggressively than it has been doing in the past, reflecting a sense that inflation is cooling. can the united states pull off a soft landing? bringing down inflation without triggering a recession? i'm joined by larry summers, treasury secretary under bill clinton, director of international council under barack obama and former president of howard university. welcome, larry. so it seemed to me over the last few months that the people who felt a soft landing had gotten very optimistic. someone like paul kruger was saying all of the evidence is pointing in the direction that inflation has cooled. but in any advanced industrial economy, wage inflation is the most important thing.

and does this tight of job market, two vacancies for every person looking, does this show that you still have a real inflation problem? >> fareed, you're asking the right question and nobody could know the answer for sure. i've said often that soft landings are as samuel johnson said of second marriage, the triumph of hope over experience. but from time to time, hope does triumph over experience. so it looks more possible that we'll have a soft landing than it did a few months ago. my continued fear, though, is exactly the one that you describe. that we have a set of inflation indicators during 2022 that were very strong that have now come back to earth. but they are still too high. they're still unimaginably high from the perspective of two or three years ago and that getting

rest of the way back to target inflation may still prove to be quite difficult. so i'd say i'm encouraged but it will be a big mistake to think that we were out of the woods. >> so one of the things that people wonder, i suppose we end up in this situation with 3, 3 1/2% inflation rather than 2% which is what most central banks target. is it worth triggering a recession to get inflation down? how should we think about that tradeoff between unemployment and inflation? >> so i think the most important thing to recognize about that tradeoff is that it is a tradeoff between short run reductions in unemployment, and permanent changes in inflation. and, so, the benefit that we could get from pushing unemployment low is on almost all economic theories likely not to be a permanent one.

but if we push inflation up and those expectations become entrenched, we're going to live with that inflation for a long time. >> one of the reasons that the labor market is so tight, it is difficult to find workers in america, about 3 million people have stopped looking for work. and we're not quite sure why. and i wondered if you had any theories? i heard -- i think it was a time spot where they interviewed a lot of the people and it sounds like they were americans were moving toward a somewhat european attitude towards jobs, saying, these jobs were not very good. we worked very hard. and we've moved back to our home with lower costs and got a couple of gig jobs in the gig economy and making 60% or 70% of what we were making but that is fine. is it your sense that there is

some change in the way that americans are approaching work? >> so, i think, fareed, if you look at that 3 million people, a lot it is older people who stopped working during covid and decided to retire earlier than normal patterns would suggest. so i think that is the largest part of it. beyond that, i think there is definitely a kind of grand reassessment going on after covid about how hard people want to work and how much they want to be part of hierarchies. you don't get to be a ceo if you don't love being in the office. and so ceo's want all of their people to come back and be working. but lots of people like their dens better than they like their cubicles, and for those people they're going to decide to work

intermittently, and not work as many hours, in some cases to leave working to their partners. so i definitely think we've got a great reassessment on and my guess is that it is not going to change that much. i think if people were going to go back to work when benefits ran out, they would have already gone back to work because that is now more than a year ago. >> stay with me, larry. when we come back, i'm going to ask larry summers about the crisis in washington over the debt ceiling. it seems like a game of chicken. i'm going to ask larry summers who will win. hevron, we're workg to help reduce the carbon intensity of the fuels that keep things moving. today, we're producing renewable diesel that can be used in existing diesel tanks. and we're committed to increasing

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the united states has an utterly bizarre system where the u.s. congress votes on budgets and then separately has to authorize paying the bills incurred by those budgets. that is what leads the country to the debt ceiling crises that happened constantly. and a crisis is brewing right now. house republicans don't want to pay the bills until president biden agrees to spending cuts even though these are budgets that were set by both parties. joining me again is former treasury secretary larry summers. everybody decried this and said it is irresponsible and unmanageable that we won't pay our bills. but here we are again. if you were advising president biden, what would you tell him to do? >> i would advise him that it is not a viable strategy for the country to default on obligations, whether it is interest obligations or obligations to pay contractors

or to pay federal workers or obligations to pay social security benefits. that is the stuff of banana republics. and that he's not going to engage in any of that stuff. i advise him to basically insist that congress do its job and approve the borrowing to finance the spending it has already both authorized and appropriated. i think he should be staying very strong. will there be any cosmetic things affecting looking at future spending. maybe there will be. but fundamentally, this is nothing something where you there should be bargaining. you could debate who will win the game of chicken, what you can't debate is that the american people will lose.

>> but you do have this problem where there is a bunch of people in the republican party who do seem like they're willing to blow the whole thing up. and it is a larger percentage than i think you dealt with during the tea party days when they also threatened to default. are you worried that there is -- even if it is a 15%, 10% chance that these republicans could hold up the process and we do have a real crisis? >> i am worried, but i'm more worried about the consequences of kowtowing to terrorists or setting precedents for completely out of scope executive actions. you know, 15 people can't stop the debt limit unless 215 other, 210 other republicans are committed to vote with them.

it only takes a few responsible republicans for the democrats and some republicans to raise the debt limit and i think that is what is the president should be insisting on in terms of isolating the extremists. that some in the republican party may bow to the demands of the extremists, does not mean that the president of the united states should do that. >> larry, since i have you, let me ask you one more thing. one of the biggest surprises to me in terms of economic data that has come out recently is the imf projection on the russian economy. it doesn't sound like it is going to do that badly. it didn't do as badly as we had imagined last year either. do you think that the fact that the russian economy is not

contracting that much, much less than it did during the '08 financial crisis, does that show the sanctions are not working? what conclusion do you draw? >> i'm surprised by that also, fareed. in part it is that the russians have over the years been isolating themselves from the global economy. it is in part that the sanctions have been more leaky and porous than they should have been because of exceptions granted to commercial interests in the west. it is in part because of what i think is perhaps the ultimate issue, while the united states and europe are together and super strongly unified, and you and i and most others that we talked to every day, see this conflict in very clear terms. the rest of the world places where billions of people live

like india for example, don't see this as clearly as we do. and that points up the difficulty of the sanctions regime in a world where near everybody is participating. i think will also suggests that we need to be very measured in any theory we develop that somehow isolating china is going to do damage to its economy because if we can't succeed in imposing huge pain on russia, with our allies united and with the goal being draconian pain, i think that needs to make us humble about the benefits of any kind of decoupling strategy. >> larry summers. always gets smarter talking to you. thank you so much. >> good to talk to you.

next on "gps", should the united states arm ukraine to the point that it could retake crimea now? a retired general says yes. we'll talk to him next. because it's powered by the most potent source of energy there is ... you. this is the lexus variety of electrification ... inspired by, created for and powered by you. ♪ how do i do it all? with a little help. and to support my family's immune health, i choose airborne. unlike some others, airborne gives you vitamin c and so much more. it's an 8 in 1 immune support formula. airborne. do more.

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welcome, general hodges. let me first ask you, what do you make of the state of play right now given that we've been hearing all of this talk about the germans giving tanks, the americans giving abrams tanks, what is happening on the ground? >> well, it is important that the united states and germany and u.k. and others are finally delivering this sort of capability that would give ukraine overwhelming combat would be part of the counteroffensive. my only regret is that it has taken long and it is still months before the american contribution, the abrams tanks specifically, could be part of this. >> is there a big russian advance being planned from what you could tell on the ground? it does seem like there is a bit of a stalemate right now. what is going on as you see it? >> i would not call it a stalemate because a stalemate implies that both sides are

doing everything they can and you just can't move either way. i would say actually right now we are in the this phase of the war where both sides are preparing for the next mobile phase of the war. the russians of course have talked a lot about the next round of mobilization. you hear even ukrainians there might be 500,000 russian soldiers mobilized and i'm skeptical about those numbers and of course russians want us to be think being a looming offensive so that we're -- so that we're focused on that rather than focused on the main effort, which is helping ukraine liberate crimea. >> so tell us why you think just first strategically this is the right thing to do. because you know a lot of people say, look, this was russian

up khrushchev gave is in 1954. that this is putin's red line. this is the one thing that is 95% russians speaking. this is the one area that ukraine should not go into. you on the contrary say very much it is the place that ukraine should stage an invasion. >> it is important to remember, of course, that everybody, including the united states, recognizes that crimea is sovereign territory of ukraine. so there is no disputing the sovereignty of crimea as part of ukraine. i can't imagine a situation where it would be a good idea for ukraine to go ahead and give up crimea. crimea is the decisive part of this war. ukraine will never be stable or safe or secure as long as russian forces still occupy crimea. and they'll never be able to rebuild their economy as long as the russian fleet is there

sailing out of odesa. how could we press ukraine to go ahead and give up crimea. >> so now explain to us why it is doable militarily. russia is a much bigger country. they're a much bigger economy and defense budget and yet you say this is doable? >> yeah. so i'm not sure that it is a matter of pride for all russians. you remember, 500,000 russians left the country last year rather than be mobilized. i'm sure they like going down to crimea to the black sea for their holiday as we saw last summer. but there are no russian soldiers that want to be in ukraine, war is a test of will and logistics. the russian logistics system is barely able to supply the russian troops that it has in the field right now. the russian black sea fleet is

terrified of going anywhere near the ukrainian coast and ukraine doesn't have a navy. so i think when you start comparing populations and logistical systems, ukraine does not have a manpower problem. they have over 700,000 in uniform and another 2 million ready to step forward. and of course, willpower. it is very clear that ukrainians have the superior will and the soldiers and the people. and what russia has, i think this is what you're alluding to, is mass. they don't care how many get killed. we see that. they're losing between 600 and 800 a day and hopes of overwhelming defenders. but the general supremes allies commander of europe, you could defeat mass if you have enough time. >> how likely do you think the

ukrainians are going to take your advice? >> well, one thing i'm sure of is that they are absolutely going to keep fighting to get back crimea because they know they will never be safe or secure or rebuild their economy and they also know based on the history of the last 30 years, that russia will never live up to any agreement but the russians will wait for us to lose interest as we did after the invasion of georgia back in 2008. so i think that is why ukraine realizes this year this needs to happen now. and it is got to be very frustrating for them when they hear the joint staff or the pentagon or the administration talk about it is going to be very hard. i don't think they could defeat them this year and then that is used as a reason not to provide capabilities that would help them win this year. so kind of a self-fulfilling prophecy and i think this is a manifestation of the fact that the administration just cannot bring themselves to say they want ukraine to actually win.

instead, we talk about we want them to be successful, or we don't want them to lose. and that is why we stop short of providing what is needed. >> general hodges, fascinating perspective. and an important message. thank you so much. >> thank you for the privilege and the opportunity. next on "gps", this week marked the anniversary of the assassination of gandhi. some in india are working hard to assassinate his character. find out why and how when we come back. when i first brought her home, she was eating little brown pieces in a bag and it was just what kind of came recommended. i just always thought, “dog food is dog food” i didn't really piece together that dogs eat food. as soon as we brought the farmer's dog in, her skin was better, she was more active, high-quality poops. if i can invest in her health and be proactive, i think it's worth it. see the benefits of fresh food at betterforthem.com

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and now for the last look. if you were to ask most people what single figure comes to mind when they think of india, they would probably say without hesitation mahatma gandhi. his resistance to british rule

and his insistence on non-violence, all of this is why he is known as the father of india's independence. even though gandhi is a towering figure synonymous with india. in india itself, he's losing favor. this week was the 75th anniversary of his death. his assassination by the member of the right wing group the rss. prime minister far wren draw modi paid tribute to mark the occasion. but that gesture conceals a contentious attitude toward the famous freedom fighter on the part of modi's agenda party which is an off shoot of the rss. as rahm goo writes that is born the fact that the religion he preaches is an anthema to the hard core elements of the hindu

right which seek to make india into a hindu state. though gandhi was an upper caste, he celebrates the many languages and many fates. but the current leaders sometime seem to believe that hindus deserve supremacy in the land in which they are the overwhelming majority. take one example of the antipathy of the ruling political class toward the icon. gandhi's killer has become for many a national hero. lawmakers have publicly praised him, the party brass usually distance themselves from such comments. or the bgp has popularize competing figures in the independent struggle. people who frontally challenge gandhi's message, and that includes the father of hindu nationalism.

he hated gandhi and muslims and also the inspiration for gautsay. a previous bjp government hung the port rat in the parliament building. modi has bowed before it, saluting salberger for his undying love for india. this moment represents a sea change for indian politics which for most of the history has been heavily influenced by gandhi and his ideas. but a militant hindu right popularized a muscular vision that looks down at the nonviolence and hold him responsible for the partition of india and pakistan and being too willing to appease muslims. disinformation about gandhi as an enemy of indian hindus circulates freely online. posts portray him as having urged women to cooperate with muslim rapists and said

suggest that he was secretly working for the british. and while the 1982 loving biopic gandhi made by a britain was an international hit, today indian film-goer favor a protagonist. look at rrr, a action packed movie about two freedom fighters who take on the british in 1920s india. the closing song and dance number involves our protagonist singing about india national heroes and behind them real life freedom fighters appear. missing from the montage is the father of the nation, mahatma gandhi. the screenwriter prasad who developed the story for the film told "the post" the time has come to let indians know the truth, the real warriors who should be honored, the real reason we got independence was not because of mr. gandhi. that's the fact.

now, i'm all for suggesting hero worship to rigorous scrutiny and many worthy historians have taken a very critical eye to gandhi in recent years. all the same, we ought not to forget that gandhi was genuinely a world historical figure, one who pioneered a strategy of non-violence and transformed the struggle for independence into a grassroots-based mass movement that inspired people everywhere outside of india from martin luther king and mohammed ali, nelson mandela and barack obama. this is the man who took on the greatest empire in the world non-violently and defeated it. in a country representative en with divisions, he built a co-lags that included and honored everyone. he was uncompromising about the need to reform inequities, such as the caste system, renaming the lowest class named untouchables as children of god.

he gave his life for it. people often describe albert einstein as the greatest general use of modern times, "time" magazine named him man of the century. organizers kept a photo in his study and on his 70th birthday gave an assessment of the man and his place in history. generations will scarce believe that one such as this ever in flesh and blood walked upon this earth. thanks to all of you for being part of my program this week, and i will see you next week. when you really need to sleep. you reach for the really good stuff. zzzquil ultra helps you sleep better and longer when you need it most. its non-habit forming and powered by the makers of nyquil.

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