♪ how will i know ♪ love can be deceiving ♪ how will i know this is "gps," the global public square. welcome to all of you in the united states and around the world. i'm fareed zakaria. we have an important show for you this week starting in syria. president bashar al assad's brutality continues unabated. so given the failure of the u.n. security council to act, what can be done? what should be done to stop the violence? will it end? we'll talk to scholars, experts, policymakers. later in the show, an exclusive interview with the great financier george soros on why he foresees european problems and what he thinks of the united states economy. also, what in the world?

mitt romney got me thinking about america's very poor. i'll show you the results. finally, what the dickens was going on in the british government this week? i'll explain. first, here's my take. if you're trying to understand the recent protests against the putin regime in russia, one of the best guides is an outspoken columnist who's been writing trenchant essays in the nation's leading newspapers over the past month. political competition is the heartbeat of democracy. this author writes, noting the absence of such competition in contemporary russia. he describes the frustrations of the russian middle class, demanding political rights. today, the quality of our state does not match civil society's readiness to participate in it. on corruption, perhaps the issue that most riles the public, the author is scathing. the problem comes from the lack of transparency and accountability of government, he says. now, what makes this all deeply strange is that the author of these essays is vladimir putin.

the architect, builder and chief enforcer of the system that he is critiquing. putin seems to understand russia's problems better than your average dictator. he doesn't seechl m to understa that he is the source of those problems in many people's eyes. in putin's world view, he is the savior of modern russia, the man who stopped its descent into chaos and poverty in the 1990s. his opponents see him as a warmed-over, cagey man presiding over a new and improved soviet state. neither view is entirely accurate. the real hero of russia's rescue was oil. the dramatic rise in the average russian's income has been a consequence not of putin's policies but of oil prices. the price of oil when putin came to office was $27 a barrel. from that point, it began an almost unbroken rise and is now at $116 a barrel. and oil is the lifeblood of russia's economy.

it provides two-thirds of its exports, half of the federal government's revenues. the russian state has used these revenues to dole out patronage across the country. it is widely believed in the west that putin stays in power through repression. actually, he does so in larger measure through bribery. in the short run, putin will be able to win the march election and consolidate power through a mixture of repression and patronage. his problems are more long term. his government has ramped up revenues that it needs to get to $125 a barrel. it has a population which is aging and shrinking which means pension and health care costs will rise as people retire. labor productivity is abysmal. the region is almost turning into a separate couldn'ty, and the rethnic diversity is straining. like iran, like venezuela, all

somewhat dysfunctional regimes, the russian regime will survive these challenges unless and until oil prices come down. for more, read my column in this week's "time" magazine. let's get started. the violence in syria escalated this week. hundreds and hundreds of civilians have been killed. the question is in light of russia and china's veto of a u.n. security council resolution to condemn and try to stem the violence, what options are left for the international community to act on? to talk about this, three great guests, fawaz gerges joins me from london of the london school of economics. elliott abrams was deputy national security adviser for president george w. bush. he lives in d.c. and in beirut, he runs the international affairs program at the american university there.

fawaz, let me begin with you. how would you describe what is going on in syria? because it appears to be more than just a few protests. there seems to be a kind of incipient civil war. >> well, i think syria has already descended into a prolonged conflict. political violence has spread to many parts of syria. many syrians -- i have just returned from the area -- many syrians are arming themselves. the syrian government appears to be losing control of some neighborhoods and some streets and even towns. you have now a potent armed insurgency. the assad regime in the last one week or so has launched an all-out offensive to crush the insurgency. the security council has been neutralized as a result of the double veto. the syrian crisis has been caught in the unfolding cold war. the saudi-led alliance and

iranian-led coalition. this is a very prolonged conflict. even though i don't see how assad can survive in the long term, it will take a miracle to rescue his sinking ship. in the short term and the medium term, assad is not as desperate as some of us or most of us would portray him to be. >> romy, fawaz talked about a saudi-iranian cold war where is syria is, in a sense, the battleground. in the region, does it appear to you that way, that on the one hand you have the syrian regime backed by iran, its sole major ally, but then is there a lot of money and arms flowing in from saudi arabia? >> well, there are three things happening simultaneously. you do have the saudi and iranian-led cold war in the region that's been going on for some years and has played itself out in lebanon and palestine and

iraq, sometimes in somalia and yemen and now in syria. you have the second thing, which is this arab -- series of uprisings all across the region where sit zens are trying to reclaim their dignity, sovereignty and citizenship and their rights. and the third thing which is the most recent, with the veto at the united nations, you have the russians, the chinese as two world powers that are reclaiming a role in the region as the americans and the europeans slowly lower their footprint in the region and simultaneously the rise of regional powers like turkey, iran, saudi arabia and the arab league now is the latest player, qatar and the egyptians are on their way. you have three things happening simultaneously, and all of them are converging on syria. >> elliott, if you were in the national security council right now trying to figure out whether this regime could survive, wouldn't one of the key metrics be whether there are defections

in the army, whether the regime itself is cracking? and what i'm struck by is for all the turmoil, you don't see much in the way of defections of the army or the intelligence. >> well, i think that's right. i would say that that's because people have not yet become convinced. people in the army. that assad is definitely going to lose and going to lose reasonably soon. so i think the message there is that we, on our side of the axis, we with the turks, we with the saudis, need to be doing more to help the side that is being killed by the assad regime and its supporters, iran, china, russia. >> fawaz, would you agree with that, that the intelligence and army are not convinced that assad is going down? that's why they're clinging to him, that it would be possible to pry them away? >> fareed, you and i, we talked six months ago when i was in syria. i don't know if you remember. and i made the point that it's not just about the security

apparatus. the reason why i think this particular regime has a lot of staying power for several reasons. first, it has a critical basis of social support, fareed. millions of syrians, sadly to say, they're just hallowites. the christians are more fanatical. you have the bourgeois class. an apparatus that has remained solidly behind them. i'm talking about 300,000 troops and soldiers that can mobilize up to 500,000 special forces and have been doing so. and not only that, of course, he has the support of iran. i mean, what we need to understand, fareed, is that tehran, baghdad road now has become the life line of the assad regime in terms of money and arms. so he has two double vetoes in the last ten months.

and that's why i think we need to have some humility and we have to be blunt for the opposition. yes, assad might not survive -- will not survive in the long term, but this is going to be a very deeply entrenched, very bloody, very costly, very prolonged conflict indeed. >> we're going to have to take a break. when we come back, i'm going to ask elliott abrams what he would do about the russian and chinese vetoes and we'll also talk about iran, which is syria's main sponsor when we come back. >> we should not watch that happen and sit by. we should give them help, concrete help. >> fawaz, would that expand this incipient civil war? >> it's terrible advice, fareed. that was me trying to be discreet

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ask your doctor about novolog flexpen, covered by 90% of insurance plans, including medicare. ...we inspected his brakes for free. free is good. free is very good. my money. my choice. my meineke. and we are back with fawaz gerges from london, rami khouri discussing syria and all the turmoil going on there.

elliott, when you confront a double veto which effectively means the u.n. security council is not going to be able to authorize these actions which we all understand provide legitimacy, provide cover, allow a lot of regional players to get involved, what do you do at that stage? do you think that the united states should be moving down a unilateral path here? >> well, it wouldn't be unilateral. i think we should be consulting with the arab league, with the turks, with the gcc, the gulf cooperation council countries because, in fact, there is a very large amount of support against the assad regime. it doesn't happen to include iran, russia and china. the question now, really is who is going to win? the russian, chinese, iranian side backing hezbollah, backing assad, or the other side which includes the saudis, the turks, the europeans, the arab league, the gcc and us? now, assad is willing to kill to prevent himself from being ousted from power. and the question really is, are we going to back the other side

along with the arabs, are we going to back them with words, or are we going to back them with something more tangible? >> what would that be tangible thing would be? >> the kind of support that was given initially in libya. that is, i would give them money, and i would give them arms. those are the two things they need right now. they don't need american airplanes. but they do need what would, from our point of view, be covert support. i would hope that it would come from arab countries rather than directly from the united states. but they're being slaughtered. and they have rifles. and we should not watch that happen and sit by. we should give them help, concrete help. >> fawaz, would that expand this incipient civil war? >> that's a terrible advice, fareed, because the worst thing that can happen to the uprising, the awakening, is the milita militarization of tit.

the most effective means to basically this large asset is to have a tipping point. what we need to understand, fareed, in the last ten months, there has been a war waged. you have a financial war, economic war, psychological war. the squeeze is amazing. and i mentioned i just came back. the syrian people and the syrian economy is being hurt. because if we do arm the opposition, if we try to go that particular route, syria will descend into all-out civil war. already syria is on the verge, on the brink. we should struggle very hard to convince the opposition to remain a political opposition. because the tipping point, i believe, the social balance of forces inside syria. once the middle class fully joins the uprising, assad is a goner, i believe. >> here is -- if i could just -- here is the problem with that, i think. the longer this fighting goes

on, and this is a war of the regime against the people. the longer this regime fights the people, kills the people, kills a sunni majority population, the harder it is going to be at the end to pull the pieces back together, to avoid revenge and to get reconciliation. if this goes on for another 9 or 12 months, too much blood will have been shed. that's why it's important, i think, to bring it to an end sooner. >> rami, a final point which is about iran. iran really is the main supporter of had regime. this doesn't look very good for them, as syria gets squeezed, as this descends into turmoil, how do you think this is being seen in iran, and how is it seen in the region? >> iran is emerging as probably one of the great losers from the current arab uprisings all across the region. and the iranians probably have to look at home because they're not impervious to these kinds of

uprisings themselves either. there's tensions within iran. but this is going to be played out in syria. this is a battle between the rulers of syria and many of the people of syria as fawaz correctly said, there is strong support for the regime, as there was for other leaders who were overthrown, finally, by their own people. so the syrian regime is in trouble. the iranians can help it, but once the erosion starts in the pillars of the regime, the security, some of the mirntds and the middle class in damascus -- and all of this is happening to a very slight extent, but it's been increasing over the last eight, ten months. the trend is very clear. and i think foreign military intervention would probably be catastrophic. and to hear americans suggest this is to think back what they did in iraq and what an extraordinary catastrophe that has been that still plays itself

out today. so i think we need to feel the pain of the syrian people. it's a terrible thing to watch them as we do here, and we see the refugees coming into lebanon and the businessmen and the sylph activists telling us what's going on. but in the end, this has to be played out in syria. and i think it will be. >> rami khouri, fawaz gerges and david elliott, fascinating discussion. we will check back with you shortly, i'm sure. and we'll be back. i'm not concerned about the safety net there. ttd# 1-800-345-2550 ttd# 1-800-345-2550 let's talk about the typical financial consultation ttd# 1-800-345-2550 when companies try to sell you something off their menu ttd# 1-800-345-2550 instead of trying to understand what you really need. ttd# 1-800-345-2550 ttd# 1-800-345-2550 at charles schwab, we provide ttd# 1-800-345-2550 a full range of financial products, ttd# 1-800-345-2550 even if they're not ours. ttd# 1-800-345-2550 and we listen before making our recommendations, ttd# 1-800-345-2550 so we can offer practical ideas that make sense for you.

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now for our "what in the world" segment. remember mitt romney's infamous "poor" comment? >> i'm not concerned about the very poor. we have a safety net there. if it needs repair, i'll fix it. i'm not concerned about the very rich. they're just just fine. i'm concerned about the very heart of america, the 90, 95% of americans who right now are struggling. >> well, it got me thinking. romney was actually being honest about americans in general. we don't, none of us, spend much time thinking about the very poor. but we should. because we have a real problem in this area. an economic, political and moral problem.

now, by romney's calculations, if 95% of americans fall in the middle class, how that can be is another question, then there must be 5% of americans who qualify as poor. well, no. the number from the oecd, the association of the world's developed economies, is actually 17.3% of americans who are poor. and how do we compare with other rich countries? we rank 31st of the 34 countries that make up the oecd. of the 34 member states, only mexico, chile and israel are worse off than we are. the uk has a poverty rate of 11%. germany, 8.9%. and france, 7.2%. they're all much lower. the oecd average is 11%, well lower than ours. let's look at another chart. this one's even more worrying for americans. the percentage of children living in poverty.

we come in at 20.6% of our children. again, far worse than other rich countries. japan, australia, the uk, germany and france all have much better numbers. mitt romney spoke about how he would fix the safety net for the poor if it needs repair. well, let me suggest one place it desperately needs repair. and that is in the area of child poverty. now, whatever the causes of poverty, when children grow up in desperate circumstances, circumstances that they had no role in creating, studies show that they will be more likely to drop out of high school, be unemployed, use drugs, have children out of wedlock, and get sick. in other words, they will be unproductive members of society, and they will cost taxpayers huge amounts of money over the course of their lives. children in extreme poverty do badly even when they're smart. a recent u.s. study tracked a group of eighth graders in 1988. it found that students who did very well on a standardized test

but were poor were less likely to get through college than their peers who tested poorly but were well off. now look at health care. a key indicator of the level of health in the country is its infant mortality rate. that's when a child dies within the first year of his or her life. let's compare again. we're at about six deaths for every 1,000 live births. again, the uk, australia, germany, france, japan, all fare much better. japan's rate is less than half ours. and this is simply because many mothers in america don't have access to prenatal care. malnutrition and poor childhood health care set in motion a lifetime of poor health which, of course, means huge costs to the system and to taxpayers. on indicator after indicator, the u.s. compares badly with other rich nations on not only how impoverished it is but also the facilities and opportunities it is giving the very poor.

that's why social mobility has stalled in america. compared to other rich countries, poor americans are more likely to stay poor. this chart shows how more than 40% of american men whose fathers had earnings in the bottom fifth end up in the same bracket. britain, denmark, finland, norway all perform much better. the sad part is these statistics are reversible. i'll show you one last chart. compare child poverty rates in america and the uk overtime. you'll see that the uk's rates were havlved from the mid-1990s on. the u.s., on the other hand, has actually had a rise in its child poverty rate since then. there's no secret source here. tony blair's labor government simply made reducing child poverty a priority through various programs. so mitt romney, yes, the media took your comments out of context, but you do need to be concerned about the very poor. actually, we all do.

and we'll be right back. what is your prognosis of the american economy right now? >> it definitely shows some signs of revival. health of youn with aveeno daily moisturizing lotion. the natural oatmeal formula goes beyond 24-hour moisture. it's clinically proven to improve your skin's health in one day, with significant improvement in 2 weeks. for healthy, beautiful skin that lasts. i found a moisturizer for life. [ female announcer ] daily moisturizing lotion. and for healthy hair every day, try new pure renewal hair care, with balancing seaweed extract. only from aveeno.

hell le, hello, everyone, i'm fredericka whittfield. whitney houston dead at 48. the singer's body was found yesterday afternoon in a beverly hills hotel. police say there are no obvious signs of foul play. houston's body has been taken to a morgue for an autopsy and we'll have extensive coverage beginning at 2:00 eastern time. and president obama unveils his 2013 budget proposal tomorrow. the plan predicts a $901 billion deficit next year. today president obama's new chief of staff addressed another economic issue, extending the payroll tax cut through the end of the year. >> i think that it's clear that the economy is doing much better, but it needs to have that additional push that comes from this payroll tax. we saw in december that it didn't work out so well to have a big, ugly fight over the payroll tack. we can avoid that. we have enough time for congress to get its work done.

overseas now, riot police launched stun grenades and tear gas into crowds of protesters in athens today. people in greece are furious about the government's plan to cut wages and benefits. the prime minister says without the cuts and a bailout from the eurozone, greece will go bankrupt and descend into chaos. and the arab league is looking for diplomatic solutions to end the violence in syria. it proposed sending a joint arab/u.n. monitoring team. an official says russia which earlier, along with china, vetoed a security council resolution to end the bloodshed has accepted this proposal. let's go to fareed zakaria gps, and i'll see you at 2:00 eastern time. joining me now, the bill

he billionaire businessman, george soros. welcome back. >> my pleasure. >> what is your prognosis of the american economy right now. it does seem to be better than the eurozone, than japan. how do you read it? >> it definitely shows some signs of revival. very important is the emergence of shale gas and shale oil as a cheap source of energy which has made manufacturing more competitive. also the fact that you now have had several years of low wage growth. so wage disparities have been reduced. and so all this is bringing a very welcome relief. i'm worried that the politics of the election are going to

interfere and put a lid on this because the republicans don't want to face the elections when obama can claim to have sort of saved the economy, recover. they will continue to push for austerity, no new taxes, and therefore cutting of services which will depress economic activity and employment. so it will be a break on the politics. it will be a break on the recovery this year. after the elections, if the republicans win, actually, they'll undergo a miraculous transformation where they discover that actually it wouldn't be so bad. we can afford to have some

stimulus. >> so you think mitt romney, if elected, would pursue a stimulus program? >> i'm pretty sure that would happen. of course, obama would like to as well. he may find it more difficult if the republicans continue to obstruct him. >> do you think -- so in a sense you feel that some part of this republican opposition to an additional stimulus is just cynical. they want the economy to stay weak in an election year. >> unfortunately, our political system is now not functioning the way it used to in the sense that the political parties are more determined to destroy each other than to lead to policies that would benefit the country. >> but you're still in favor of

more stimulus? >> you have to be a little bit more selective because you really have to spend money in ways that would eventually pay for the interest, the investment. so i think we should distinguish between investments that bring a return whether it is investment in human resources like education or infrastructure like broadband or high-speed rail or whatever which, i think, would be very beneficial, a third tunnel under the hudson, this would be the time to build it. because that would create employment and would eventually repay. so, however, the idea now has been established very

successfully that nothing that the government does can pay for itself. and that should not be the case. i think this is a politically inspired campaign and self-fulfilling because if you believe that government is bad, you can do a lot to make sure that the government is bad. so this is where the political process, i think, has led the country into a dead end. and that is what we need to somehow get out of. >> a lot of businessmen say that the obama administration has placed a huge burden of regulations, taxes and health care, energy, financial services, your own fund decided to reclassify itself as a family office to escape some of these regulations. is it true, do you feel that there is too much of a burden?

>> no, i think there's a real quandary here because take, for instance, the financial markets. the crisis we are in was created in the private sector. it's by deregulation and globalization that the financial system was left on its own, and it grew like cancer. and it became far too big and extracted far too much of the profits produced by the economy for its own purposes. it was up to 30% of the total earnings profits in the u.s. economy were in the financial sector. that was unsound. the financial services clearly don't contribute 30% to the well being of the country.

and it also created imbalances led to excesses, leverage, excessive indebtedness which then led to the financial collapse which we today suffer from. that came from the private sector. so it means that the private sector and financial sector particularly does need to be regulated, that stability needs to be an objective of public policy because markets don't correct their own excesses. so, however, and this is where the quandary comes in, regulation is also imperfect. and in many ways more imperfect than the market because it tends

to be a very bureaucratic, so it's always lagging behind. so you have two very imperfect systems, let's say, that need to be reconciled with each other. >> what about taxes? you support president obama's proposal to increase taxes on the wealthy? >> yes. i very much do so because it's a big boom, the super bubble really resulted in a great increase in inequality. not only do we have the aftereffect where you have slow growth one way or the other, but if you could have better distribution of income, then the average american would actually be better off as a result. but that is totally politically unacceptab

unacceptable. i haven't heard president obama particularly pushing it either. so -- but that's where i think the country could really benefit. >> people were surprised to see that mitt romney was paying only 13.5%, 13.9% in taxes. would it be fair to say if we were to look at your returns, since most of it comes from investments, you would probably pay something in the same range? >> well, actually, i would probably be the biggest loser if you had a minimum, which is what we propose because i give all my effectively the maximum amount i can to my philanthropy, and therefore i don't pay taxes on it. my tax bill would go up a lot if you had a minimum tax. but i'm reallyi iwilling to pay because i think if everybody who

made as much money as i do give as much as i do, i wouldn't advocate it, but i think the free riders should also pay. >> and we will be right back after this break with more with george soros. we're going to talk about europe and whether there is going to be a european crisis. and about president obama's handling of the american economy. ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 to understand you and your goals... ttd#: 1-800-345-2550 ...so together we can find real-life answers for your ttd#: 1-800-345-2550 real-life retirement. ttd#: 1-800-345-2550 talk to chuck ttd#: 1-800-345-2550 and let's write a script based on your life story. ttd#: 1-800-345-2550

and we are back with george soros, one of the world's richest, most successful investors and also one of its most generous philanthropists. do you think that president obama has done a fwogood job, a things considered? >> look, he has done a kind of a mixed job. i think that the problems that he inherited because he came in immediately after the financial crisis were bigger than any president could have immediately remedied. you know, hoover was elected in '28. he was actually a very capable president, but his name is mud.

roosevelt came in in '32, and he actually was mud -- he made some mistakes at the beginning, but nevertheless, things have recovered. whoever gets elected now has a much better chance of being successful than obama had. >> will you create a super pac to help president obama? >> no, i mean, i haven't decided, but i think it's a big, big issue that the citizens united has really unleashed private money for political purposes that can be used anonymously. and this will create an unequal playing field which will further destroy the political system. and let's say i basically have

given my money for on principle, not for pursuit of my private interest, and i've always done is very openly, saying what i'm doing. so whatever i decide, i will state what i'm deciding. but i'm distressed by the problem that citizens united has created. >> will you vote for president obama? >> definitely. >> you are very worried about europe. you think that it is moving in the wrong direction and moving toward a catastrophe. >> well, i think a catastrophe will be avoided, but greece is a sick situation. it has been mishandled. by the european authorities because they charge a premium on a rescue package. and it's basically politically

the dynamics are very bad. and that is a general problem in europe. the european union -- sort of b created, it was a desirable objective. people like me and people in europe are very excited about it. as a reality, it's more of an imposition than it is a -- something desirable. >> if you were still running your $25 billion, would you bet against the euro right now? >> no. that's a separate issue. i think the euro can go either way. it's a 50/50 proposition. the problems of europe don't translate into a debt against

the euro. if anything, i would say that the euro is more likely to appreciate than not. but on the other hand, the european central bank is moving towards being like the federal reserve basically creating a lot of credit and that will weaken the euro. >> would it be fair to say your prognosis for europe is probably no crisis, no dramatic collapse of the euro, euro zone, but very, very slow growth as a result of the systemwide austerity programs. >> yeah. you see what has happened is that the debtor countries within the euro zone found themselves in the position of third world countries that have become heavily indebted in a foreign

country. so they are relegated to this inferior status. this is what happened to latin america in the 1980s when you had a similar, very similar situation and that resulted in the lost decade for latin america. and so right now, the european union and particularly the heavily indebted countries face a lost decade. it might actually be longer than a decade because japan had a similar situation with the real estate boom and banking crisis and 25 years of no growth, and that will create tensions within the european union which could destroy the european union.

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this week queen elizabeth ii of england marked the 60th anniversary of ascension date, the day her father the king died in 1952 and she became queen, her coronation came the following year. she marked the anniversary visiting schoolchildren but my question of the week is, where was elizabeth on that day in 1952 when she suddenly became queen? was she aa, sailing in hong kong harbor, b, swimming at the hotel in beverly hills, c, cutting a ribbon in new zealand or d, sitting in a treehouse in kenya. go to cnn.com/fareed for ten more questions. while there check out the rest of our offerings on our global public square website and don't forget follow us on twitter and facebook. and now find full video episodes of "gps" for sale at the itunes tv store. go directly there typing

itunes.com/fareed into your browser. this week's book of the week was written 2,000 years ago but remarkably current. the great or ra tore marcus sis ro running for roman council, the top job, his brother gave him a set of notes on how to win an election and there's a new translation that has been published, the advice just as relevant today. for example, he advises promise everything to everyone. when you don't deliver, some will forget, others will have moved on. if you don't promise them now, he suggests, everyone will be upset. see how some basics in politics never change. for the last look, this week all of the members of the british cabinet got birthday presents not for their birthdays but for the 200th birthday of charles dickens and the gifts presented by the culture minister were works by the great victorian

novelist that seemed relevant to the recipients. for example, prime minister cameron got great expectations, true of any incoming leader but also hard times, an attack on doctrines of has say fair. foreign secretary william hague criticized for using private planes instead of commercial airlines. his gift, the book, the uncommercial traveler. business secretary vince cable was dubbed scrooge last year after he said he was sending no christmas cards to members of parliament. so he got, obviously, a christmas carol. lord strat, the leader of the antique house of lords with its arcane procedures got bleak house, which is a book about a never ending court cause case. the book for the deputy prime minister from the liberal democrat party always wanted a bigger role and more power. oliver twist's about the boy who says. >> sir, i want some more. >> more!