cnn.com/stateoftheunion where you can see what we learned when we traveled to your state. john will be right back here next sunday. and if you missed any part of our program, tune in tonight at 8:00 eastern. we'll showcase the best of today's "state of the union." until them, i'm gloria borger in washington. thanks for watching. "fareed zakaria gps" starts right now. this is "gf ps," welcome to out viewers in the united states around the world. today a mix of the new and the old. i wanted to show you, again, a few terrific panels we've done an also some new material of particular interest. now, in 16 days, president barack obama will have been leading the united states for exactly one year. the year was filled with challenges. afghanistan, iraq, the economy, health care. how did he meet those challenges? we spoke back in november with an extraordinary panel of

eminent historians. peggy no-- i thought it was important to bring it you, again, now as we look back at the president's first year. also on the show a battle you might never have heard of. the battle of wanat. if you care about the u.s.' involvement in afghanistan you'll want to learn all about it. many say it encapsulated many of the problems that america faces in the world at large. the best military report and military expert in the country tom ricks joins me to tell you about it. while most of the focus of the nation and this show is on the hot spots around the world, what about the rest of the world? we'll talk to the famous scholar, kishore mahbubahni of singapore to get a different perspective on the world. let's get started. all day long on cable, news

talk shows we hear about how president obama is doing. on fox some say he's a socialist who's trying to indoctrinate our children, even as he mortgages their future. on msnbc he is the lonely hero fighting to give help to the sick, employ the jobless and end racism in our time. here on cnn, well, i'm on cnn, so today i want to see if we can get some kind of a clear-eyed look at what kind of a president he really is and what kind of a world he faces. so i gathered a panel of talented historians and writers. people who know greatness and the lack thereof when they see it to help me accomplish this mission. walter isaacson written terrific biographies of ben franklin and henry kissinger. robert carol, two pulitzer prizes along with numerous others awards. author of the amazing three volume biography of lyndon johnson. peggy noonan ronald reagan's chief speechwriter. then a terrific book about those years. "what i saw at the revolution."

mel painter, a priceton university historian and author of "creating black americans: history of african-americans over the last 400 years." that was white a mouthful. peggy, when you were in the white house with ronald reagan, at the end of the first year i think people would have talked about optimism, confidence, things like that. what do you think people will say with this first year? >> i think this first year of obama, i think history will probably look back on it as an attempt to change the face of america in the world, which so far appears to be a good beginning, coupled with, i think, a serious domestic misstep with regard to focusing on certain issues that were not the great issues the american people were focused on when the

great recession really sunk in. >> internationally, if i read your comment right, you've been quite supportive of his change of tone. >> yeah. i think it was needed. i think bringing a new face, literally and figuratively, to american -- of american foreign policy to the world was a good thing and i think his basing approach of what i would call friendliness. not an apology tour, but a sort of expansive approach of no nation does everything right. we haven't done everything right. we certainly would like to have progress between us in the future. i think that's pretty good. as i say, domestically i think less so. >> i think first of all you have to say the big thing we're going to remember about the first year of the presidency of obama was that exactly a year ago, you know, my wife was walking around to various banks buying cds because we were all afraid the entire financial system would collapse. we thought everything was going

to go off of a cliff. that didn't happen. we had stimulus and maybe a budget you think may have been too lauded by the committees and congress, but the entire saving of the financial system was huge. i think when you're in a recession it's a great time to tackle the unmet social issue of our time, which is health care. the fact that most americans are insecure and fear if they lose their job they're not going to have health insurance, this is big. it has to be tackled. and the fact he's gotten it past the 80 yard -- i mean, down the field 80 yards so far is pretty amazing. >> isn't it fair to say it is more than americans might have bargained for when they elected him? i mean, it is something no democratic president has been able to get past, you know, in -- >> sure. i was on this show not too long ago with peggy noonan and we were worried he was trying to do too many different things. >> no, i was worried he was

trying to do too many. you were defending him and saying, no, it was all genius. >> no -- >> yes, you were. >> i felt health care was a thing you had to push. i frankly didn't think cap and trade and climate were things to do. i felt it was a time he needed to do health care and i think he's honed his focus in on that. >> i don't think people are afraid they'll lose their job and lose their health care. they're afraid they're going to lose their job. that is the emphasis. it's the unemployment that's high taxes, high spending. it's money. it's not secondary issues. >> what do you think? >> i was just saying it's not either/or. it's not either i'm going to lose my job or i'm going to lose my health care, but people are worried about both at the same time. over and over i keep reading about people who have lost their jobs and, therefore, lost their health care. >> bob, you know, this discussion inevitably actually brings us back to lyndon johnson

because the president who -- overread his mandate, tried to do too much and particularly tried to push the american system too far left, too much in favor of big government was lyndon johnson and it produce the this great conservative backlash. how do you think of that? >> i read it a little differently. i would say we have two presidents here. both of whom wanted to transform america. they both wanted to make america a different place. johnson, you know, was succeeding to a remarkable extent until he lost track of if in vietnam. july, 1965, he's doing two things. he has gotten through the voting rights act. we shall overcome, he said. he gets through this act in a -- just writing about it in the book i have now -- it's marvelous to watch him get this bill through the senate vote by vote. he does it. he's signing the medicare bill. this is the same month.

july 1965. at that same time in the next week he is launching the first huge escalation, secretly without telling the american people, of the vietnam war. obama is, as i see it -- he has a vast vision for america. as lyndon johnson did. and he's setting out to transform the country on many fronts, and i think it's going to be fascinating in world history and the history of this country to see if he succeeds or not. >> you don't think johnson, you know, johnson overreached or failed because of an overreach of the great society? you think it was all undone because of vietnam? >> let me give you an example. 1965 everything looks better and then the money starts to go for vietnam. you know, if i can just take one more minute. if you read the notes of his meetings, he used to call them the tuesday cabinet meetings. they were up on the second floor

of the white house in the family dining room. often with just four people. mcnamara, george bundy, and chairman of the chiefs of staff. you suddenly say, gee, we don't have money for these programs. that's the tragedy. i don't think it's an overreach. >> look, we've got two wars going. that is expensive. it costs so much. whatever is done in iraq and in afghanistan, it will continue to be awfully expensive and it will continue, i think, to crowd out not only financially but almost in the public imagination. great new expansions that he might want and desire. we are going to see what his decision is on afghanistan and we will see if he decides to increase troop strength very seriously and obviously commit to a great deal of time there, of course it will be financially expensive. >> do you think he's dithering?

>> oh my goodness. i must tell you, i depart from some people's criticisms on that. i am delighted to see an american president who is thinking about a very serious decision. they are pushing forward too much by events. there's too much in a president's inbox. they're constantly pushed because of the press of people like us chattering about what they do, to make a decision quickly and to make it with an almost faux decisiveness. you know what i mean? this is what i'm doing and then they're stuck. i like it that he is thinking. i like it hat he's calling everybody in. i think it's a good thing he's calling in councils. it is clear to me he's changed his view somewhat from the campaign. when afghanistan was his good war. now he is not sure. >> i'm so struck that so much of what we talk about in foreign policy is really about masculinity. it's about who's going to shame

whom. who's going to take the fall for having been wimpy. and obama's up against that as a democrat, as a skinny guy, as a nice black man. he's going to find it difficult to be the person who's going to be called the guy who lost china, vietnam, afghanistan. >> i'm worried about this. i don't know the need right now to try to nation build in afghanistan. i think it will sap a lot of the strength of his domestic policies. >> whether he's right or not, just to go back to what peggy said. lyndon johnson had a saying for everything. he said, i'd rather be slow and right than fast and dead. so, you know, i so agree with you. >> he got pushed into vietnam a little bit, too. i bet you he didn't really want to go in. i haven't read your book yet. >> he didn't follow that advice, but it was good advice. you hope obama will follow --

>> we will take a break and we will be right back. >> i think the democrats didn't notice that when they were passing a stimulus bill that couldn't get one single republican vote it might have been viewed as problematic by the american people. weather ahead, push here.t to e if you want to access 10 gigs of music you just downloaded to your hard drive, push here. and if you want to pull away from it all, you can push here. the all-new-40-gig hard drive nav and entertainment system on the 2010 lacrosse. from buick. it's the new class of world class.

new capzasin quick relief gel. (announcer) starts working on contact and at the nerve level. to block pain for hours. new capzasin, takes the pain out of arthritis. we are back with robert caro, walter isaacson, mel painter and peggy noonan. how do you view obama as the sort of symbol -- you know, because in the campaign you're able to maintain this essentially symbolic position. mario cuomo's great line, you campaign in poetry but you have to govern in pros. what's the pros been like? >> yes. well, i'm struck listening to

all of you. hearing the undertone of the reality everything we talk about is subject to this partisan drumbeat that's going on. the campaign was so much about bringing us together and we can overcome and we can bridge and do this, we'll turn the corner. the actual governor has been corrupt with a lot of partisan nastiness. >> was that a mistake on his part? he also, you know, he handed over a lot of control to nancy pelosi, to the democratic party. >> he had to. he had to. i think we often want the president to have more power than he really does. or to overreach. and all along i have felt that obama could not afford to be out in front. >> the drumbeat of partisanship or whatever we call it seems to have done all right for the other party. i mean, you know, no matter how you spin it at the end of the

day, at least the last set of elections have been good for the republicans. why do you think that is? >> there was a gallup poll out this week that said essentially it was a fairly broad poll, and people said but it had gone up about 12%, the number of people who thought obama was governing from the left, not from the center. it used to be about 42%. now it was about 53% or so of people. i think the president in a number of ways domestically, a lot of business, a lot of spending. the promise, i think, of tax increases has taken people aback a little bit and i think he has damaged his brand, as they say in the language of merchandising which has now become the language of politics. i think jersey was the big election. i think obama had carried jersey i think by about 15 points just

one year ago. now the democratic governor, a strong supporter of obama, obama had come and stood with him three times saying, new jersey, vote for this man. he just lost by five points. it was about a 20-point drop in support. that tells you something. jersey is a democratic state, but they're worried about specific things. unemployment, taxes, they worry about a lot in jersey. terrible property taxes. a bad economy. that's where their minds are. that's who votes in jersey. the president -- >> i lived in jersey. >> i lived in jersey. that's what they're worried about right now. >> still in jersey. >> you don't think unemployment, property taxes -- >> ungovern bl state because people want so -- nobody wants to give up their jurisdiction. >> understood. >> we have school boards where there aren't even schools.

>> all right. i have to ask you to jump in on -- >> fareed, really wonderful point. there are two great things that happened this year. we didn't have the grand depression and health care -- the other big thing is that as you said, partisanship which we thought he might be able to reduce the poison of partisanship, has grown. it's gotten -- it's helped the republicans. it's partly, i think you're right, the fault of the administration by not calling everybody in, not calling everybody from bob by jindal to nancy pelosi, saying let's figure out how we're going to get health care and what the principles are. >> if he adopted john mccain's proposal -- make the bill much more affordable. >> if he had come in and consulted with john mccain on two or three of the things on health care, or bobby jindal or appointed what people height,

these commissions but have a commission led by a bob dole and others and say what are the principles and try to do it? i think also, though, the republicans felt that injecting more poartisanship and -- >> i think the democrats didn't notice that when they were passing a stimulus bill that couldn't get one single republican vote it might have been viewed as problematic by the american people. >> we have to close this with historical commentary from robert caro or any kind of comment. >> i think, you know, you never know how history's going to view things for you, but i think that this scope of what he's trying to do, to change a country -- does anybody really think we didn't need huge health care reform? does anyone not think we have other huge problems here? to have a president who says i'm going to try, to me, is sort of thrilling.

we don't know how it's going to work out. he may be doing things wrong, but it's great as far as i'm concerned, to have that scope of ambition in a president. >> there will be lots to write about. thank you all. this is a wonderful conversation. we will be right back. >> we just got hit in the lower belly, north side of the aircraft.

we spend a lot of time on this program and around the media in general looking at the war in afghanistan from 30,000 feet. looking at the big picture, the big questions. today i want to do something different. i want to examine one battle from the war in afghanistan. it may be the key battle. i'm going to use it to shed light on america's problems in that country. wanat is a town in northeastern afghanistan by the pakistan border. the battle there was one of the deadliest of the war. nine u.s. soldiers died in just over two hours. to get an idea of what was going on there, listen to some of the transmissions between the men pinned down on the ground and the helicopter pilots flying above that day who didn't get to

wanat until most of the u.s. soldiers were already dead. >> tom ricks joins me now to make sense of all this. he's by common defense the best defense reporting in america. having covered the u.s. military for almost 20 years. first for "the wall street journal" then "washington post." he's written four highly accl m acclaimed books including "fiasco" and "the gamble."

tom, let me ask you first, why is this battle important? what are the themes we should be looking at as we peer more closely at it? >> it's significant because it's representative of several things and it shows you why this war is so difficult and how things can go wrong. the afghans have survived by smart, bu observing. they know how americans fight. they know the intervals they have in which to attack. they know where the american weaknesses are. communications, heavy weapons, and things like overhead reconnaissance means you attack ideally in bad weather like the attack a couple of weeks ago, when it's going to be hard for the helicopters to get in the mountains. you go after their communications then you go after their heavy weapons. you see this again and again. these are smart fighters. they fought the soviet union, then they fought each other then they're fighting us. >> what should we be looking at?

what's going on there? july 2008. 49 soldiers get orders to establish a base in wanat. why are they going to wanat? >> at the time they thought they were doing counterinsurgency. here we're going up the valley. here's wanat village up above there. it's way up in the mountains. this is a corridor taliban and taliban allies have been using to come from pakistan over into afghanist afghanistan. the u.s. decides, let's go up in there and interfere with their movements. now -- >> kind of a supply route that they're trying to block? >> yeah. it's a corridor they're using to come -- the americans want to get in there and make it more difficult for them. >> then july 13th, day of the attack, what happens? >> they had a lot of foreboding. in fact, one of the commanders of the platoon told his best friend, i think we're going to get messed up. though he didn't use that term.

messed up badly up there. he was right. right at dawn at about 4:20 a.m. there, a volley of, perhaps, 200 rocket-propelled grenades started coming in on them. very well done. very sophisticated. the taliban had crept up close because they didn't have enough troops to put up patrols up there. the taliban fighters had crepted up close and aimed rocket-propelled grenades at the heavy weapons, the anti-tank rocket launcher. the 50 caliber machine gun. they knew what they were going. take out the heavy weapons first and then deal with the lighter stuff later. >> and how long did the battle last? >> the tense battle lasted about an hour. because another point of sophistication, the taliban observed that it would take about that time for american attack helicopters to get there. so they knew they had a window of opportunity. in that hour, nine american

soldiers were killed. another 27 were wounded which made for 75% casualties. >> now, did they fortify themselves? how much, you know, how much fortification was there? >> they were working really hard to fortify themselves. by the way, in all discussion i have no criticism of the soldiers on the ground. they were in a difficult situation. they were doing the best they can. they were working really hard, but they were really put in a difficult spot. they didn't have enough water to keep themselves hydrated while digging and filling sandbags in heat that ran over 100 degrees in the high mountains of afghanistan. they were desperately trying to secure themselves aware the locals for hostile, fearful of the situation. >> two weeks ago we had a similar battle in another town. a little bit north of wanat. what happened there? >> it was very similar. very sophisticated knowledge. i think the fighters attacking them up there knew that the americans were beyond the reach of artillery and that meant,

again, you had a window of opportunity until the attack helicopters arrive to start p h pushing you back. this was a tougher fight. it went on for many, in hours. despite the fact helicopters were overhead, it was a similar result that the base wasn't taken but the base was abandoned shortly thereafter. which raises another question general mcchrystal is considering right now. tell me exactly why we're in nuristan. i understand why we're in afghanistan. why in this part of afghanistan? is this really counterinsurgency you guys are doing up there or are you simply sticking your fist into a hornet's nest? >> let's delve into that. the argument would be made if we were not to be there, if we were to say, seed these areas which are sparsely populated, there are very few people. the argument is the taliban will assert control there, potentially al qaeda or other terrorist groups could set up traini ining camps and things l

that. what's wrong with that argument? >> there's nothing wrong with it. that's probably what would happen. i think what you're seeing is general mcchrystal considering, given the limited number of troops i'm going to have, what's the best use of them? one use might be, okay, let's pull back from those areas and focus on an ink spot classic counterinsurgency approach. kabul, khost, and kandahar. put your troops, put your resources there and do classic counterinsurgency there -- >> provide security for the people there and that is the vast bulk of the population of afghanistan? >> exactly. then in more rural areas, pull your troops back, do a kind of triage but use counterterror against them. >> if you saw a terrorist base set up in nuristan, go in with attack helicopters, destroy it but get back out? >> yeah. i would call this do the biden

plan for areas like nuristan, do the petraeus plan for areas like the major cities and other population areas. >> what does this say about the taliban and its military tactics? when you watch what you're describing, should we be wowed by the level of sophistication or is this just street smarts? >> i think we've consistently underestimated afghanistans. i used to live there when i was a teenager. one thing i lived there -- >> you lived in afghanistan? >> from 1969-1971 at kabul. i was a member of the afghan ski patrol and skied in the saline pass. a lot of afghans, though, are ill literat illiterate. ill literal does not mean stupid. the average afghan knows more poetry than americans. you can run into afghans that

know hundreds of poems and thousands of proverbs. when i lived there it seemed to me -- one of my favorite books on this region is by john masters. it's called "bugles and a tiger." memoir of being a british officer in waziristan in the 1930s. at the end of the last war the british had there, the afghan cousins showed up rather angrily and confronted him. where are our medals, they said? he said, you wheere the enemy. they said, no, no, you gave medals to the pushtuns on your side. this is the afghan attitude. this is a sporting event for them in many ways. shortly after the attack on wanat the u.s. military pulled out of the village and the entire valley. two weeks ago at the request of

admiral mike mullen, general petraeus opened a new investigation into the battle and appointed a three-star general from the marine corps to oversee it. we'll keep you informed when the results of that investigation come in. to read more about the battle of wanat, to get the book tom suggested, go to our website where you'll find links to some of the best reporting on this subject. we will be right back. said carl was our best presentation guy. [ worker ] he is. just last week he told my team about fedex office print online for our presentations. we upload it to fedex office, then they print, bind, and ship it. the presentation looks good, right? yes, but -- wait, you didn't actually bring carl with you. good morning! but i digress. [ male announcer ] we understand. you need presentations done right. fedex office print online.

now for our what in the world segment. here's what got my attention this week. it's a report from russia that bankruptcy proceedings have begun for the manufacturer of the number 47. it's more common name, the ak-47. today it's the world's most popular weapon and might prove to be a victim of its own sack pes. in 1947 a soviet soldier won a competition for a new sub machine gun design.

so good was the weapon capable of firing 600 rounds per minute. so indestructible and perves you to hot, cold wet and sand the soviets put it in the hands of everyone fighting on its side. it was an indestructible workhorse. the u.s. fought against it in the jungles and rivers of vietnam and in afghanistan in the 1980s americans made the mu ha ja dean had ak-47s. many of the same weapons the united states provided for freedom fighters are used against american and nato forces by the taliban. then the ak-47 crossed the ocean, cementing its reputation as a rebel favorite, first in the hands of the guerilla fighters in central and south america, from there to africa where it proved as lethal in the hands of an untrained child. on that continent, aks bought for as little as $12. got the nickname the african

credit card as in don't leave home without it. it's said to be in the official arsenal of more than 80 countries. the u.s. bought more than 180,000 of them when it rearmed the iraqi army. the ak-47 was so instrumental in mozambique that it is on their national flag. it's become a weapon of choice for terrorists, drug dealers and gangsters. some say these weapons are responsible for the deaths of one quarter of a million people every year. there are reportedly anywhere from 70 to 100 million ak-47 and variations of it floating around. so why is the company that makes these going broke? it's a story of globalization and technological change. massive demand for a product now invites cheaper imitations and counterfeits, many almost as good as the original but at a fraction of the price. back in the soviet era the soviets didn't just arm their allies, they freely sent out

instructions on how to manufacture them. they needed to learn something about intellectual property. the original company and its original factory have lost most of their business. in recent years russia has accounted for 10% of total production according to the company. indeed the factory flow has been quiet for most of 2009. fortunately for his own wallet, they have branched out and make the product people presumably keep coming back to buy. we will be right back. >> the whole tone of america's relations with the rest of the world has changed. a kind of reflexive anti-americanism you saw in europe, islamic world and some parts of latin america, that's gone. clearly obama is someone who's widely respected all around the world. as a great man. even though they're waiting for him to deliver results.

hi there, i'm brooke baldwin. quick check of the day's top stories. president obama's top counterterrorism adviser says human error allows the terror

suspect umar farouk abdulmutallab to board a u.s. airliner christmas day. john brennan says government agencies had information on abdulmutallab but failed to connect the dots. brennan insists, though, none of the information stood out as a major red flag. >> clearly the system didn't work. we had a problem in terms of why abdulmutallab got on that plane. there is no smoking gun piece of intelligence out there that said he was a terrorist, going to carry out this attack against that aircraft. we had bits and pieces of information. >> the u.s. embassy closed today because of threats from al qaeda against u.s. interests in the country. not clear as to when it might re-open. the british embassy also closed in yemen but may re-open tomorrow. yesterday president obama linked the plane terror suspect to an al ckqaeda affiliate based in yemen. snowy and cold for a lot of holiday travelers. who has more on that? cnn meteorologist reynolds wolf. >> we're following two big

weather stories today. one is going to be the chance of heavy snowfall in parts of the northeast. the second story the cool temperatures. let's handle the snowfall first. this area of low pressure we have in parts of maine that could bring a foot of snow in the highest elevations. that coupled with the strong winds could be blizzard like conditions for parts of maine. snowy conditions in parts of new york and pennsylvania also through a good part of the day. that low coupled with the krar of low pressure over the great lakes is going to pull cold air to the south. that's the second part of our story. high temperatures expect to climb to 32 degrees in memphis, tennessee. 31 in atlanta. 7 degrees in minneapolis. back into tampa and miami, 50s and 60s. northeast we go, boston with 28. 40 in denver. 31 in salt lake city. 51 in seattle. that's a look at your forecast. brooke, let's send it back to you. >> thank you, sir. those are your top stories.

lately we've been devoting much of our time on "gps" to crisis hot spots. afghanistan, pakistan, iran.

there's a larger word of it. kishore mahbubahni is a large part of it. he is the dean of the school of public policy in singapore. before we get started, kishore, you were on this program and you said a year and a half ago, you said if barack obama is elected president of the united states 50% of the anti-americanism in the world will disappear. well, he has and has 50% of the anti-americanism disappeared? >> i'm not sure if it's 50% but it's gone down significantly. the whole tone of america's relations with the rest of the world has changed. the speeches he gave reaching out to the islamic world have made a huge difference, you know? a kind of reflexive anti-americanism you saw in europe, in the islamic world, in some parts of latin america, that's gone. clearly obama is someone who's widely respected all around the world as a great man. even though they're waiting for

him to deliver some results. >> what is the world's reaction to obama's foreign policy so far? beyond the issue of the speeches. i'm looking at the specific issues of, you know, dealing with iran. dealing on the iraq issue. dealing with afghanistan in the way he is. is there some -- you travel in policy circles around the world, are people coming to any kind of conclusions tentatively? >> i think they believe he's trying to do the right things, and, i mean, i think even hillary clinton is doing an excellent job as secretary of state. reaching out to the right people, talking in the right tone. if you look at the u.s./china relationship, which, frankly, is the single most important relationship today in the world, i think he's done a very good job of keeping it on an even keel. now, in the case of iran, afghanistan, and iraq, i mean, iraq seems to be going the right direction, but the whole world is dreading any kind of military

attack on iran. that will be a disaster, okay, if it's carried out by the israelis even. so you have to wait and see what happens. the key, -- everybody's watching this very carefully -- let's push as quickly as we can for a two-state solution. let's do something in that area. because any concrete result on the two-state front immediately lowers the barometer of anger in the islamic world and that's something we are hoping he'll push for very hard. >> talk about the u.s./china relationship a little more. china has come out of this recession stronger than ever. it's going to grow at 8.5% this year. its reserves are now at $27.3 trillion. they're higher than they've ever been so far from being depleted as a result of it and they are using this crisis as an opportunity to build an amaze ing new set of structures.

they come out of this at least in the first flush much stronger than the rest of the world. are they beginning to flex their muscles? >> well, the first thing is that, by the way, when this crisis happened, i remember this. many people thought this crisis was going to somewhat derail the asian story, that asian countries were dependent on exports to u.s. and europe. what nobody expected is that this crisis has accelerated the shift of power to asia and the chinese are ready to be responsible stakeholders in a new global order. they do want to work with the united states of america. so at this moment in world history, if the u.s. gets it right with china, then we are in for two or three decades of comfortable time. but if the u.s. gets it wrong with china at this point in

time, then it is very dangerous. >> there has been in china for the last 20 years, roughly speaking, a kind of consistently pro-american foreign policy, by which i mean this -- that the chinese saw their salvation, their path to great power, their rise to great power as being fueled by a good relationship with america, because that gave them access to trade, technology, and also created a kind of umbrella of security under which they could grow. is the current leadership and the next generation of leadership in china, from what you can see, still kind of thinking along these same lines? or has the rise of china, the financial crisis, the discrediting perhaps of some notions of american -- the american model, has all this made the chinese feel, you know what? we need to rethink our relationship with the u.s. we don't need -- friendly relations with the u.s. is not the paramount issue here.

>> i think the key point i would emphasize is that chinese foreign policy has always been pro-china. they have had a fairly, how do you say, consistent long-term strategy of managing the rise of china, and working closely with the united states has worked in enabling the rise of china. and so they'll keep on doing it. but you're right in suggesting, by the way, that this crisis has changed asian and chinese attitudes toward america and the west, because until now, the general feeling was that when it came to economic management, when it came to financial management, the west knew best what to do. this is how you manage the world's financial situation. this crash, you have no idea the impact it's had psychologically. it's like scales falling from the eyes and people saying, how come? these guys were telling us how to run the world in the financial sector. and look how they screwed up. and believe me, i mean this is

something that's so hard to put across to a western audience how aet tuttitudes have changed. the counterpart to that, incidentally, is there is rising confidence in asia that we know now how to manage things better. we know how to get the right balance with an invisible hand of free markets and the visible hand of good governance. and you need both. all those who are saying deregulate, privatize, open up, gee, they were wrong. so in that sense i would say there has been a sea change of attitudes. at the same time, i'm absolutely convinced that the chinese know that the only way for china to emerge peacefully is for the 1945 rules to stay in place. they want to merge us like japan and germany after world war ii. they don't shake it or break it. >> does that include keeping the dollar in its current position

as reserve currency of the world? >> that's a very tough question. and believe me, the chinese are agonizing very hard about this dollar question, because they have so much to lose. i mean they know that if something goes wrong with the u.s. dollar, at some point in time if you cannot raise loans to pay for your deficits and you start printing money to pay for your deficits and the dollar goes down, china's going to suffer. right? they've got a huge amount invested in the u.s. dollar. so they would like to see a managed transition towards a world where they're not so reliant on the u.s. dollar. but at the same time they do not want to undermine the united states in doing this. they want to work with the united states to create a more balanced kind of financial regime that is not so fragile and not so dependent on one currency. >> always a pleasure to have you on. >> good to see you, too. thank you. and we'll be right back. )%)ñ

if you're waiting for the question of the week, we have decided to give your brains a bit of a rest this week, so there will be no "question of the week" today. it will return next sunday. if you're itching for a mental exercise, try your hand at the fareed challenge. it's on our website, cnn.com/gps. remember, you can always e-mail us at gps@cnn.com, we welcome your comments, good and bad. this week i'd like to recommend not one book but five. i've chosen ten of my favorite recommendations from 2009. last week we brought you the first five. now the final five. "the age of the unthinkable," "imagining india," "panic the story of modern financial insanity" "the accidental guerrilla" and of course "oli