over the years, the tardyness of candidates has added a new requirement to the art of live political reporting, tap dancing. you can find "the new york times" article along with analysis, web exclusives and much more at our website, cnn.com/sotu. thank you so much for watching "state of the union." i'm candy crowley in washington. up next for our viewers in the united states, "fareed zakaria gps." this is a special edition of "gps," the global public square, from davos, switzerland. welcome to all of you around the united states and around the world. i'm fareed zakaria. we have a very important guest to start off this week, timothy geithner, the secretary of treasury of the united states. all eyes were on him this week in davos. are we really seeing bright spots in the u.s. economy? what can be done about the euro zone crisis? i'll ask him all that in an exclusive interview. then we'll go on a tour around the world with a global panel.

neil ferguson, mubani and khanfar. also, how in the world did one of the world's greatest sellers in the global bazaar lose its mojo? i'll explain. but first, here's my take. president obama spoke forcefully in his state of the union about the importance of reviving manufacturing in america. if you talk with economists, they'll tell you it's a very complex problem. involving taxes, trade, regulatory policy, exchange rates, educational skills. it is all of those things. but when you move from high-level policy to specific cases, you'll often find one element that is rarely talked about, a government's role in boosting its domestic manufactur manufacturers. in a front-page story last week, "the new york times" detailed how apple's iphone ended up being made outside america. "the times" wrote about the apple executives who visited a factory in china to see if it

could cut the glass precisely for the phone's touch screen. when the apple team got there, the factory owners were already constructing a new wing. this is in case you give us the contract. the manager explained. how could they afford such an extravagant gesture? well, it turns out "the times" noted that they received subsidies from the chinese government. that one incident is part of a pattern. in 2009, for example, bridgelux, a light-emitting chip manufacturer in the united states, was searching for a new factory site. the company considered the cost of building in the u.s. and elsewhere. the government of singapore offered to pay half the setup costs of the plant. why can't we do that here in the u.s., the ceo, bill watkins, asked? the ceo of dow chemical has been arguing for a national policy aimed at reviving manufacturing. in his book "make it in america," livers argues that not only would a manufacturing

policy produce good, long-term jobs, it would upgrade the jobs skills that are crucial to keeping innovation alive. innovation doesn't just happen in laboratories by researchers, he told me. it happens on the factory floor. the process of making stuff helps you experiment and produce new products. if everything is made in china, people there will gain the skills, knowledge and experience to innovate. and we will be left behind. companies can't compete with countries, he said. take solar energy, an industry largely invented in america in which the manufacturing has largely moved to china thanks to massive state subsidies. or consider wind turbines, china's biggest windmill makers have received more than $15.5 billion in credits from state-owned banks. as a result, despite many concerns about quality, they won their first major foreign orders in the past year. over time, they will gain experience, improve quality, and

further reduce costs. in industry after industry, the same pattern emerges. in theory, i'm deeply skeptical of government industrial policy. government doesn't know how to pick winners and losers. it makes mistakes. the process gets politicized. and yet, when i look around the world, particularly in asia, i see governments playing a crucial role. they do make mistakes. their versions of solyndra. but they seem to view it like venture capitalists. their role is to get many companies, only one will succeed. once successful, the government helps these companies to compete against big american and western multinationals. there used to be a joke amongst marksist economists who would say from a deviation of economics, it might work in practice, comrade, but it doesn't work in theory. that's what industrial policy looks like these days. the theory doesn't make much sense. but it's hard to argue with the results. for more on this, you can read

my column in this week's "time" magazine. let's get started. it's a great pleasure to have timothy geithner, the secretary of the treasury, on. >> nice to see you, fareed. >> let me start with an easy question. what is the united states economy going to grow at this year? >> there are no oracles in economics, and it's still a pretty uncertain world, but i think the conventional view of the u.s. now is that we're growing between 2% and 3%. and i think that's a realistic outcome for the united states' economy as long as we see a little more progress in europe and as long as we don't see a lot of risks coming from iran and the oil front. >> that scenario of 2% to 3% growth seems a little different from what ben bernanke thinks growth is going to look like. if you read the statement the fed put out, it was very bearish

statement. i mean, to be willing to almost guarantee that rates will be kept where they are until the end of 2014 suggests they don't see any growth of any robust growth for a long time. are they wrong at the fed? >> you know, i'm not a forecaster, so in my view, it's not worth much. i think actually if you look at both the fed's forecasts and the consensus of private forecasters in the business community among economists, people are pretty closely clustered in that area. but it's still very dependent on how the world unfolds. again, i think it's worth recognizing that, you know, we still face tremendous challenges as a country. we're still repairing the damage caused by devastating financial crisis. that still has huge lasting impact on the basic fortunes of most americans. unemployment's still very high. housing's still very, very weak. construction's very weak. people still have too much debt. and they're bringing that down. that's still going to take a

while to repair. >> you know, there is a very well established narrative now among the business community in the united states that there would be a much more robust recovery. the u.s. economy would be growing much more vigorously if there were greater certainty and businesses could invest. and the reason they're not is a kind of tsunami of regulations, uncertainty about tax policy, uncertainty about the deficit. but perhaps above all, the sense that the economy is being thrown this huge new wave of regulations in health care and finance and in energy and that that's what's keeping the economy back. >> i don't think there's much basis for that view, although it is true that we are putting in place very tough reforms in the financial sector. we're trying to improve how the u.s. health care system works. and we're trying to change how americans use energy. and those are necessary desirable very important long-term reforms to the united states. but i think if you look at the

evidence we have about how the economy is doing and how the business community is doing in particular, the reality does not justify that sense. so just look at the things you can use to measure, basic health, business health. you know, profitability across the american economy is very, very high. profits are higher than the pre-crisis peak. if you look at investment as a measure of confidence, private investment and equipment and software is up more than 30% since the trough in the first half of '09. exports are up 23%. there's broad-based strength in energy in agriculture, in manufacturing. not just high-tech manufacturing, heavy manufacturing. he was at a siemen's plant in north carolina this week which is building steam and gas turbines and generators for export. and they're doing that because they see in the basic fundamentals the productivity in

the united states, even with all of our challenges, pretty compelling, competitive advantage relative to where else they produce. so i think if you look at the basic health of the american business sector, it's much stronger than i think anybody would have thought at the peak of our crisis and stronger than many of us hoped. >> while business profitability is up, productivity is up, unemployment still remains a huge challenge. and many businesses have become more productive because they've taken costs out of the system. they've managed ee e e ed ver t efficiently. how do you get it going going? >> the biggest driver is how fast we grow. and the biggest determiner of how fast we grow now is really going to depend on these two fundamental factors. one is what happens in the world? meaning in europe and in the

gulf, because of oil, and frankly just to be direct about it, whether republicans in congress decide they want to legislate things that are good for growth in the short term. so that what we think the right economic agenda for the country is is for us to legislate a set of investment incentives, investments in things that matter for long-term growth, rebuilding america's infrastructure, more education, more spending on innovation, basic science and research, better skills for americans, tied to long-term fiscal reforms that restore sustainability. and if we were able to legislate progress in those things in the short term, that would make a big difference for confidence. that would make a difference for the rate of growth of the american economy in the short run. but to be realistic, it's going to take a long time still for us to fully repair the damage particularly unemployment that came as a cause of the crisis. but the private sector's created

3.2 million swrobs since job growth resumed. that's actually pretty strong compared to the last two recoveries. and it's pretty strong given the aftershocks of the crisis. we all want it to be stronger, though. >> most people who look at the american tax code, which is with regulations and rules, 10,000 pages, one of the most complicated in the world, believe that the key to reforming the tax code is broaden the base, eliminate deductions and loopholes, lower rates. isn't the president's proposal in the state of the union taking us in exactly the opposite direction? >> not at all. the president's proposals which are focused on a set of investment-favorable reforms in the corporate tax system, manufacturing and investment, and on a modest but necessary increase in the effective tax rate paid by the richest americans, those two things are only going to come, i think

realistically in the context of broad reform. and what we're trying to do is lay the foundation for tax reform so that we can produce a more simple system, lower rates, broader base, more simple, less distortions. >> why not just propose tax reform? >> well, and because i think you have to start with principles for a framework. and what we're trying to do is to be specific which areas we think should dominate the debate. so, again, i wish it were different for us, but the basic cruise fiscal realities of the united states now, and we have to recognize we have to govern within those limits means that when we do tax reform, we're going to have to be helping contribute to deficit reduction. you don't have the ability to offer the american people or the american businesspeople a net tax cut. that is beyond the capacity of anybody realistic about our constraints. but, again, just to put it in perspective, our fiscal problems are daunting for us. in the long run. but they are much more manageable problems than faced by almost any major economy

around the world. and it's important not to lose sight of the fact that given -- given the high-level unemployment, given the very bad outcomes for median income in the united states over the last 30 years, 20 years, 10 years, given the just appallingly high rates of poverty in the united states, given the competitive challenges we face that's going to require pretty significant investments in infrastructure and education and innovation, you have to take a much broader approach. and we're not going to solve our problems in the country by thinking they're centrally about how we refor fiscal sustainability. that's part of it. but it's not the dominant challenge we face as a country. >> we will be right back from davos with the secretary of treasury of the united states, timothy geithner. you made news a couple of days ago when you made clear that you were not going to serve in a

second term. is that his choice or yours? well somewhere along the way, emily went right on living. but you see, with the help of her raymond james financial advisor, she had planned for every eventuality. ...which meant she continued to have the means to live on... ...even at the ripe old age of 187. life well planned. see what a raymond james advisor can do for you. a little bird told me about a band... ♪ an old man shared some fish stories... ♪ oooh, my turn. ♪ she was in paris, but we talked for hours... everyone else buzzed about the band. there's a wireless mind inside all of us. so, where to next? ♪

and we are back here in davos, switzerland, home this week to the world economic forum. now more of my exclusive interview with timothy geithner, the secretary of the treasury. when you look at europe, mr. secretary, you look at the growth projections that are coming out, and they are lower than were projected, which means that the deficits are larger, which means that the debt to gdp is larger. the debt to gdp is larger in almost every case not because the debt has gone up but the gdp has gone down. not that the na-- the denominat shrunk. does that not suggest that the path to austerity is growth? >> i think the debate about austerity and stimulus is mostly

divorced from a much more practical reality. the proponents of stimulus, i think, today now realistic -- are probably exaggerated. it's power and it's reached now. and i think the people who talk about economic problems are mostly problems you solve with austerity get the big things wrong. it is true, however, for parts of europe for a long period of time, there's going to be no alternative to very substantial adjustment in budget deficits in the size of the govern's made. there is no alternative to that. for those to work, however, they need some support and some financing, and they need to be complemented by reforms that are also helpful for growth and competitiveness over time. but they will not work. if there's not a stronger commitment of financial

resources standing behind the european endeavor. and without that, those reforms will never work. and you're right, countries will face the risk that every disappointment in growth will be met with an austerity that will feed the decline. and that's a cycle you have to arrest if you solve financial crises. >> when you were in china, did you talk about u.s./china trade in a way that you think you will see results? because the president, in his state of the union, was pretty tough on china. do you think that there is a path here, a constructive path, forward? >> again, we'll have to see. we measure people by their actions. you know, china does present a pretty -- a really unique and formidable challenge to the global trading system because the structure of its economy, even though it has more of a market economy now, is still overwhelmingly dominated by state enterprises in china systematically subsidizes the cost of key imports, energy,

access to credit, capital, price of land, and it's kept its exchange rate below fundamentals for some time, although it's appreciating gradually. so what that means is china even though in many ways it's starting to have a world-class manufacturing sector is supporting that ambition with a set of policies that are very damaging to not just the commercial and economic interests of this trading partners but to the political support around the world for sustaining a more open trading system. and they are moving on some fronts. we'd just like them to do more. you know, we'll just have to see. i do think china believes that it's in its interests to try to make this broader system work. of course, it depends a lot on access to our market and other markets around the world. we hope that provides enough incentive for them to make more progress in those reforms. >> let me ask you one final question. you were surprised when you made news a couple days ago when you made clear that you were not going to serve in a second term

of the obama administration. is that his choice or yours? >> that's an excellent way to pose that question. you know, generally, anybody who takes these jobs serves at the pleasure of the president. and, you know, at a time when we face so much challenge, so much pressure, you know, if the president asks you to do these things, you have to do them. and when he asked me to stay when i thought it was the right time to leave, i agreed i would stay. and i agreed i would stay to the balance of his term. and he accepted that aspiration of mine. and that's where it's going to come out, i think. >> what are you going to do next? >> that feels like a long way away. you know, again, we're in europe. i know the eyes of the world are on europe. you know, we are living with terribly challenging and hugely consequential economic policy choices. we have a lot of unfinished business even on the financial reforms side.

and a lot of foundation laying for better policy outcomes on the things that are good for growth, investment every for opportunity in the united states not just for the long-term fiscal. so i feel like we've got a long year of hard work. and i know it's a political moment in the united states, and people are skeptical about whether we can do anything. but our judgment is that we still have a chance in some of these areas to make some progress. and i'm going to focus on that as long as i can. >> tim geithner, a pleasure to have you. >> nice to see you, fareed. >> thank you all. we will be right back with a story you won't want to miss. why one of the world's greatest exporters is now buying more goods than it's selling. a fascinating reversal of fortunes in asia. they came to see us in florida... make that alabama... make that mississippi. the best part of the gulf is wherever you choose... and now is a great time to discover it.

this year millions of people did. we set all kinds of records. next year we're out to do even better. so come on down to louisiana... florida... alabama... mississippi. we can't wait to see you. brought to you by bp and all of us who call the gulf home. that's going to have to be done by a certain date. you always have homework, okay? i don't have homework today. it's what's right here is what is most important to me.

it's beautiful. ♪ ♪

wherever you are in the world, you've probably used or covered some japanese product, honda, prius, sony, a nikon camera. from the 1950s, japan's exports from flooded the world and fueled an economic miracle at home, making that country one of the wealthiest in the world.

well, this week marks a turning point. one of the world's great export engines has run out of gas. what in the world is going on? >> reporter: for the first time in 31 years, japan has recorded a trade deficit. in simple terms, that means japan imported more than it exported last year. now, this is not that unusual for some rich countries. the u.s. has had a trade deficit since 1975, and yet we've grown. but the u.s. economy is not built on exports. japan's economic rise, on the other hand, has been almost entirely powered by exports. so what has changed in japan? the japanese government would like to blame one-off events. last year's earthquake and tsunami crippled factories and shut down nuclear energy reactors. the offshoot was decreased economic output, plus they

needed import expensive oil from the middle east. but natural disasters have only highlighted and accelerated existing trends in japan. a decline in competitiveness and an aging work force. china and other east asian countries can now produce cheaper products and in greater quantities. add to that a rising yen and japan's exporters have been at a disadvantage globally. toyota's chief perhaps said it best last year. it doesn't make sense to manufacture in japan. add to this japan's demographics. between 1990 and 2007, japan's working population dropped from 86 million to 83 million. at the same time, the number of americans between the ages of 15 and 64 rose from 160 million to 200 million. in a global marketplace, this is a major handicap for tokyo. look at this chart. between 2001 and 2010, japan's

economy grew at .7 of 1%, less than half the pace of america's. it was also well behind europe. contrast that with growth per person, or gdp per capita, and japan actually outperforms america and the eurozone. so while japan's economy in aggregate has been hurt by this lack of workers, for the average japanese, income is still up, and quality of life is still very high. that's partly why the country has not felt the pressure to reform. now, it's easy to extrapolate from the data. the japan's low growth is not a failure of economic policy but just a reflection of its demographics. but that's too simple. in reality, japan's industry is becoming less competitive, and even per capita incomes will start slowing down. tokyo's policymakers have failed its people. they could have opened up many of its closed sectors to competition, reformed its labor laws to make japanese labor more attractive, cut pension benefits, allowed more

immigration. its government could have put the country on a path to reduce its massive debt burden. instead, we're entering an era where one of the great manufacturing nations of history faces a looming current deficit. with its debt at 211% of its gdp, if the cost of its borrowing increases, tokyo would face an even greater crisis, a default. keeping a rich country competitive is very hard, especially in a democracy where interest groups keep asking for more, more benefits, more subsidies, more protections. they want to be shielded from competitive forces. it is happening in america just as it happened in japan. it's easy to forget how powerful a growth engine japan was in the 1960s, '70s and '80s. but eventually, it was unable to change its ways, reform and get less rigid. the result was decline. we will be right back with a special "gps" panel, the likes

of which we couldn't put together anywhere else but here in davos. stay with us. an old man shared some fish stories... ♪ oooh, my turn. ♪ she was in paris, but we talked for hours... everyone else buzzed about the band. there's a wireless mind inside all of us. so, where to next? ♪

and i'm here in davos, and we are joined by neil ferguson, the professor at harvard, and author of many, many books.

the dean of the school of public policy in singapore. and khanfar who was the director of al jazeera and is now running a kind of version of davos in qatar. is it fair to say that the american economy's prospects seem relatively speaking better than a lot of the others and that one of the reasons you get a feeling that president obama perhaps is feeling a little bit more confident these days is that there is some good news coming out of america? >> well, some good news did come out in the last quarter of 2011. though if you look closely at it, what was going on was that the savings rate was going down, and americans had essentially stopped deleveraging and had gone back out shopping. whether that's sustainable or not, i don't know. and he think it's a bit too early to say the recovery is

here. happy days are here again and re-election is assured for obama. i don't think we're by any means out of the woods in a whole range of areas, not the least housing. so that's, i guess, a qualified answer. what's certainly true is that things are going way better in the u.s. than in europe where we may yet see that big double dip that people have been worrying about all through this crisis. in fact, i think the double dip is here for the eurozone, and it could deep even deeper if the crisis over the greek debt explodes which it could do in the next few days. >> just atmospherically, do you get a sense that people are looking at america with somewhat less jaundiced eyes? because you've been coming here many years. and for the last two years, there was the sense that america was the problem. it was the country that had caused this crisis. there was still a certain amount of hangover from the bush years. is there a different mood about america these days? >> well, i mean, there's a sense

of relief that there's finally some good news coming out of america. but privately, i think i'll be very honest with you. i think people are still adopting a wait-and-see attitude. they're not quite sure whether this means america has really turned the corner. and more fundamentally, by the way, nothing has changed in terms of long-term trends. in terms of the shift of power to asia, asian economies will continue to grow and europe will continue to slide and the united states, we're not quite sure where it's going to be. the state of the union speech very dramatically. all of those who say america is on the decline don't know what they're talking about. it's not in the decline in absolute terms, but it will decline in relative terms. for 5% of the population to have 25% of the world's gnp is unnatural. it's super performance by

america, underperformance in the rest of the world. the underperformance is disappearing. so you're moving to a new world order. but if america remains strong, that's what the rest of the world wants and doesn't want to see a weak america. >> you know, one of the things that i always noticed in those public opinion polls was that while obama was wildly popular in much of the world and in europe certainly had changed the image of america, there was one place in which it didn't really make much difference, which was the middle east. middle eastern attitudes towards the united states. in the first year of obama, it was not particularly good. in the second year of obama, they were not particularly good, and they remained even after the arab spring, not particularly unchanged. so do you think people in the middle east look at america pretty much exactly the same? do they want it to get stronger and exercise power in that region? do egyptians want american help

consolidating their revolution, or is the attitude just stay away? >> when obama came, people were relatively optimistic. when he did the speech in cairo and before that in ankara or istanbul, he was actually talking to the arab world, to the muslim world, new language. maybe they had been anticipating some action that they had not seen. so there is favorable disappointment as well in the arab world. that what we see at this point in time is not what we have been thinking of maybe three years ago. so that issue is definitely this moment in time, yes, there is disappointment, but on a wider scale, yes, people are adopting let's wait and see. and maybe, you know, they would like to see some respect to their choices and to their future in a way that doesn't put doubts above their place as they see it. >> before we leave america, let me ask you about the campaign. you wrote a column in "newsweek" in which you were talking about

how the right has to take this whole issue of inequality which president obama spent so much time talking about in his state of the union. that the right needs to take it seriously as well. >> yeah. i think obama knows he's on to something. he tried this out, of course, late last year in kansas. it was the core of the state of the union address. and he's playing this card not just because he thinks he's likely to be up against someone like mitt romney or even for that matter newt gingrich whose personal finances don't look particularly average compared with the typical voter. it's also because he knows that the republican party does not have a clear answer to the question why has the united states become so much more unequal as a society than it was 30 years ago? the response that the republicans have come up with so far is to say claethat's class warfare. they're in financial. most americans are well aware of this social trend. they live it and see it every

day. and what we need to see from the republican candidates is a credible response to the argument which obama makes that the federal government has to do more to counteract inequality through taxation, more taxing of the rich and through government programs. now, there is a republican answer to that, which is no, that's not the way to address the problem of inequality. but right now we're not hearing it. we're just hearing denial. and i think that's a weak and dangerous response for the republicans. >> and we will come right back to all of this. when we come back, we're going to talk about the euro crisis. we're going to talk about china. we're going to talk about the air rab spring when we return. an accident doesn't have to slow you down... with better car replacement, available only from liberty mutual insurance, if your car is totaled, we give you the money to buy a car that's one model-year newer...

with 15,000 fewer miles on it. there's no other auto insurance product like it. better car replacement, available only from liberty mutual. it's a better policy that gets you a better car. call... or visit one of our local offices today, and we'll provide the coverage you need at the right price. liberty mutual auto insurance, responsibility -- what's your policy?

and we are back with niall ferguson of harvard, and khanfar, former director of al jazeera. euro crisis, you have long been an alarmist, somebody who said that, in effect, the europeans stuck their head in the sand. they've sort of muddled through and they've muddled through by, correct me if i'm wrong, by using the european central bank as a kind of credit mechanism to stabilize things, to inject a certain amount of liquidity, buy

some debt. can they keep this up? >> well, you called me an alarmist, fareed. i mean, i've been warning of the dangers of monetary union since the inception of the very idea. and i think the warnings have been alarmists but absolutely correct. what unfolded in europe after the crisis began in 2007/2008 was a bank crisis. the europeans refused to deal with it. it mutated into a sovereign debt crisis and ultimately into a major political crisis. now, we are at the point which i would call the cliff edge where greece is concerned, if it is impossible to reach an agreement on who should bear the costs of writing down greek's enormous public debt, and we're in the course of very fraught negotiations about this, if there's no agreement on that and the headlines scream disorderly default, nobody knows what the contagion effect will be. and i'm not just talking about portugal or spain. i'm talking about italy and indeed the entire eurozone system.

they've muddled themselves to the edge of a precipice, and we are close to the moment of decision. the only thing that's stopped them from going over the precipice has been them printing money. and under its new president, the ecb is now may having the way the fed did. >> but why can't it continue to do that, and why are we at a cliff's j now? >> because that solved the liquidity problem of the bank. but the underlying problems of insolvency of both banks and states, those have not been yet been addressed. nobody here has a clear answer. where will the money come from? because the german taxpayer says not from me. if not there, then i don't know where. >> one answer people have floated is that there isn't enough money in europe to do a proper bailout and what you need is to get the imf to get involved. but for the imf to get involved, it has to go to its main sta

stakeholders, that is the united states. a new source of capital would have to be china. do you think they would go for a solution like this? do you think that the chinese are in the mood to contemplate some greater kind of global responsibilities? because after all, if what niall is describing happens, it's terrible for everybody, including the chinese economy. >> i'll give a two-part answer. the first part clearly china, india, the rest of asia does not want to see europe go over the cliff. because as you said, nobody knows. what's going to happen. if the eurozone cracks up, nobody knows what's going to happen to the global economy. nobody wants that to happen. so as you saw in the london summit when they had to inject new money into imf, china came up with money, in that kind of scenario where you're at the edge of the cliff, everybody else is putting their share in, i think china will put their share in proportionally.

but back to the answer which is far more important is the long-term solution for europe is to go to what's real, find growth, long-term growth. what you need is a change of mindset in the european leaders. you know, they never, ever understood all the asian leaders saying hey, come invest in my country. this is why you should invest in my country. i'll give you this benefit, tax benefits. these are the things we've been doing for the last few decades, and it's worked. now, why doesn't europe try that? and that's why asians say okay, you start that, we will come invest in you. >> it's one year since the arab spring that captured the imagination of the whole world. and i think it's fair to say people are a lot less optimistic one year out than they were at the time. fears centered around chaos around dictatorships which are not ceding power as the rise in egypt, the rise of islamic

parties. how would you assess -- give us a state of, you know, is there a way to assess this young revolution one year year in. >> one year ago, if we had this kind of meeting, talking about the arab world, we would have very grim, depressing picture because the whole discussion about arab world az about the survival of the small, elite and control of power and certain sectors of the society who are worthy. now at least, we have choice. we have the will of the people. i entrust the people on the future of the arab world. those who have made the revolution are the people on the streetp, the youth in particular, well connected, educated have brought everyone around certain ideals. a lot people may not understand the kind of depression our generation has gone through in

the last few decades. now we can do something, talk about it, design the future as we would like to see it. i think yes, the arab world is definitely going into the right direction. >> do you give any credit to the united states for having shown the arab world that democracy can, in fact, work? because after all, it seems to me this whole process really began in baghdad, the elections that set this ball in motion, only happened because of the u.s. intervention and the overthrow of the first dictator, saddam hussein. do you give them any credit at all, the americans? >> >> i will tell you that the americans are [ inaudible ] governments supported au crattic regimes in the arab world. >> the neo conservative position stopped doing that and should change the game in the middle east and some ways that argument we associate with people like paul wolfowitzs has turned out to be right. by overthrowing saddam hussein a domino effect set itself in

motion. >> the actual path to democracy in the arab world started from within the public, from within the people. it is an indigenous model created, deeply rooted inherited inside the system and the culture and the will of the public. what happened in iraq, it was imposed from overseas and rejected by the public. the democrat of iraq is not functioning because of the, you know, this kind of foreign element in it. in my opinion, what happened in iraq delayed the arab spring. >> we will have to end on that note, i think inevitably, iraq comes -- comes up again and people disagree on it. thank you all. wonderful panel. we will be right back. >> fright of it and telling them who's to blame for it. >> makinging you afraid and who's at blame for it.

president obama's state of the union speech on capitol hill this week marked the 225th time a u.s. president has delivered an annual message to the congress either orally or on paper. that brings me to my question of the week, which is what major american foreign policy initiative was announced to the u.s. congress in a state of the union message? was it a, the monroe doctrine,

b, the marshall plan, the containment of communism or d, the global war on on terror. we'll tell you the correct answer, go to cnn slau.com/farer your answer. fresh insights and analysis from all over the world and follow me on facebook and twitter to get my latest notes on interesting things i've seen. ever miss a show or want to save one for posterity, find full video episodes of gps for sale on the itunes tv store. go directly there by typing itunes.com/fareed into your browser. this week's book of the week is actually a movie of the week, and not just any movie, but as of this week, an oscar nominated movie. "a separation" beautifully made iranian film. this is not about politics or policies. it's just a character study. it office an uncommon lens into

the lives of ordinary iranians. not only was it nominated for the best foreign film oscar but also for best original screenplay. and now for the last look. had enough of executive branch speeches this week, here's one more from down under. no don't click away. in what you're about to see a mundane speech by an australian cabinet minister becomes remarkable. only when played up against clips of michael douglas as the president the great film "the american president." >> i want to be different from the other guys. >> take a look. >> we have serious challenges to solve and we need serious people to solve them. >> we have serious problems to solve, and we need serious people to solve them. >> not the least bit interested in fixing anything. >> bob rumson is not the least bit interested in solving it. >> only interested in two things. >> he is interested in two things. >> afraid of it and telling them who's to blame for it.

>> making you afraid of it and telling you who's to blame for it. >> coincidence, i'll let you be the judge. the correct answer to our gps challenge question was a, the monroe doctrine. warning powers to stay out of the affairs of the western hemisphere was laid out in president james monroe's 1823 annual message to congress. thanks to all of you for being part of my special show from davos, switzerland. i will see you next week. hello, everyone. i'm fredricka whitfield. a check of your top stories. happening in northern florida, interstate 75 is closed after a string of crashes overnight that killed at least nine people. officials tell us the highway will be closed in that area for most of today. the sheriff's office says visibility was really poor because of smoke from a nearby brush fire. ugly scene