>> rose: welcome to our programe markets and what is happening in this economic crisis? to understand and the president's meeting today with the fed chairman ben bernanke we talk to julianna goldman, white house correspondent for bloomberg news. >> there's somewhat of a no win situation when it comes to what they can say or do to impasse the markets. so the president really what he's trying to do is to just, to the extent that he can reassure investors, reassure consumers, and try and ease some uncertainty, that's pretty much what he can do. >> rose: from e globaleconomic e house is focusing on, we also turn to foreign policy and afghanistan and pakistan. first up with ahmed rashid, a pakistani journalist, who's written about the taliban, joined by dexter filkens, who used to be with "the new york

times," and their reports for the "new yorker" magazine. >> what we need to do the next 18 months is reduce the violence inside the country so the transition can take place. for that you need negotiations, and you need the military and cia to come on board basically. >> the violence is higher now than it was -- now than it was a year ago. so it's not working. at the same time i think -- i think the danger of these -- of these talks, or the potential danger, is that if you're the taliban, you know, you're just looking at your watch. they'll just r the clock out. >> we conclude this evening with jorge castaneda and a look at mexico and the larger question of north america. >> mexico is a middle class society. i emphasis this in the book. it's not 80% or 75%. it's 55%, 57%, but that's an enormous achievement for mexico.

this has happened mainly in the last 15 years. fox's term and calderon's term. combatting poverty, he's done w. he's not done well, in my opinion, on the drug business. he's not done well in terms of having the economy grow. he's certainly not done well in trying to dismantle mexico's huge monolies. >> julianna goldman, ahmed rashid, dexter filkens, and jorge castaneda when we continue. everstory needs a hero we can all root for. who beats the odds and comes out on top. but this isn't just a hollywood storyline. it's happening every day, all across america.

every time a storefront opens. or the midnight oil is burned. or when someone chases a dream, not just a dollar. they are small business owners. so if you wanna root for a real hero, support small business. shop small. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. 9 ">> we begin this evening awwd the world, where they were under siege again today. there'sw!vuñeuropean sovereign s

is worsening, the dowfell, inve. yesterday the federal reserve announced interest31v@remain ne0 person.pc:óç2013. joining me is julianna goldman, chief white house correspondent for bloomberg. i'm pleased to have her to give us an update of whatmeeting is . >> thanks for havingjfcharlie. >> rose: do welc

in the stock market. the fed had yesterday said that it was going to keep rates at historic lowsá7p2013, so past ts re-election campaign. so the white house seems to be in some ways in reactivenow, the public schedule earlierwy1y tot mid-afternoon. >> rose: the white house thoughe agreement, the appointment of taside this talk about debt, leave it to the super committee, see what they did, and they could make a pivot to jobs, but they can't get away from the news of the market. >> no, that's right. and that's the biggest challenge for the president. really the challenge that has dogged him his entire presidency, which is on the o hand the need to be able to stimulate this economy, get this recovery moving, but, on the other hand, you've got the need for deficit redtion and deep spending cuts that republicans are insisting on. every time this white house

thinks they're going to be able to make that pivot, how many times have we heard tm do that pivot? it's almt like we've pivoted in circles at this point. they can't get the message right. the president is heading next week to the midwest to try to and focus on his jobs agenda, but you talk to white house officials privately and they're terrified to go out there next week, because really the message could, again, get hkd$what's has and thscommittee, more discussi. nancy pelosi still has yet to announce her appointments to that committee. that could end up ortaking some of the conversation next week as well. >> rose: do we know why thepreso bernanke, or was it's a meeting to check in as to where they were and what might be happening in the future? >> sure. well, what white house officials said was that this meeting was part of a series of regular meetings that the president does have withg!

was only third time they met this year. they met at the thousands july and in -- met at the white house in julyn; and in january.we can't discout >> rose: what's the sense of th< 2"tttz theycan do to impact alls that we think would make a difference? >> you g the sense that they reallyday. on monday, when the president went out, and he addressed the nation to talk abo them)-lfdownn afghanisn, you know, earlier in theñg3ot day, white house officials wemhuóñ sayi that the president was notaddress the s&, because they didn'tlvalidate th. so they really are taking this day by day,2xv4 tryingshowcaset

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certainty in the markets the s&p downgrade ahead of the open on monday. >> what is it they believe they can saythe markets?.>> you knot of a no-wéádáç situation when it comes to what they can say or do to.so the president, really what he's tryingnañthe extent that he investors, reassure consumers, and try tofúj@z ease uncertaint, that's pretty much what he can do. he's continue to call for an extension of the payroll tax

cut, and the unemployment insurance that expire at the end of this year. you'll continue to hear him call for an infrastructurepatentefore agreement, butr that he canctually say and promise on deliverables, that's something he can't do right now. >> how would youeasure the anger at the white house abo the s&p lowering of the u.s. rating? >>ell, we know that the white house and the administration pushed back hard. they worked very hard, especially not just friday evening when they fir got notice that s&p was going to be downgrading and they came -- they figured out the $2 trillion accounting error, but ahead of that the administration had been working behind the scenes to try and prevent this downgrade. and so they are obviously not pleased that it happened. in some ways, though, the accounting error and the -- the effort to discredit the s&p in

the wake of that downgrade, i get the sense that some administration officials think that worked in their favor, and even you can see some of that in e bond market, that while equities market has fallen, the bond market has rallied. >>xd julianna, thank you for join us. >> my pleasure. >> rose: julianna goldman, chiee house. we'll be right back to talk about afghanistan. stay with us. >> rose: the war in afghanisnco. on saturday, 30 american soldiers and eight afghans were killed when taliban insurgents shot down their helicopter. it was the single deadliest incident for u.s. forces in afghanistan. the attack underlined the continued strength of the insurgency as the united states begins its draw-down. president obama announced earlier this year that ,000 troops will leave the country by next summer. that would leave by about 70,000 troops until 2014, the scheduled date for the withdrawal of all

foreign forces. joining me now dexter filkens of "new yorker" magazine and ahmed rashid, a pakistani journalist and author. i'm pleased to have both back on this program, and especially together. welcome. >> thank you. >> nice to see you again. >> rose: when do you go back to? >> i just spent several weeks in pakistan, and before that afghanistan. i hope not for a while. >> let's talk first about afghanistan. where are we? >> well, i think the situation is deteriorating]sy>o very fast. the kind oftis4seem?ô;y to;2: reallyreality(of thatbkk taliband2ugtzat thv]dy time th. the americans are taing to the taliban. the talks are down, because it

seems, you know, they're asking for confidence-building measures in which the u.s. military is being asked to basicallyeduce some of these night raids and some of these operations in return for an end to the taliban assassinating people. it'sogged down at the moment because i don't think the u.s. military wants to give any ground. >> rose: because they believeitg taliban leaders. >>eah. they want to continue this policy for another year or so.iç g;;?ñìs contm4((6#!z$7shat.os$ue >> rose: whu&d!they÷pjhi@ therh

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suggested theygsuz such@cm# )ñíbyd au3 circumstance[talibanw is that the reality? >> well, no, i think it's exactly the opposite actually. mean, i think the more military action you have -- >> the less successful, and therefore the less willing the taliban are to talk, because they think they're winning on the battlefield? >> yeah. >> rose: you hear that?yeah. i think it's pretty troubling right now. look at 2010. i mean, we're at the end of the surge now. the0,000 addional troops were now going home. >> rose: right.last year the am, by their own measure, they took off the basketsfield about 10,000 taliban. they killeabout 5,000 and captured about 5,000 oops. the violence is higher now than it was a year ago. so it's not working. and so at the same time i think -- i think the danger of these -- of these talks -- or the potenti danger there's if

you're the taliban, you know, you're just looking at your watch. you know, they're just going to run the clock out. i mean, i think the americans aren't in a position where they can really -- it's just the opposite from what you were saying. things are not going well for them. and so why -- what incentive does the taliban have to make a deal? i think that's why they want to continue to fight. it's not going very well. >> rose: okay.but american mili, we're talking about petraeus suggested things were going well, and they were achieving some of their objectives. >> they've cleared somethey cle, particularly in the south, that they hadn't gone into before, that were voled by the taliban. so in that sense they have, but the taliban ha been able to increase the level of violence, and i think over the long term, what is so troubling to me every time that i go there -- i mean, to me the big question is, okay,

so the americans can fight their way into this village, and they can hold the village, what happens when they leave? you know, and thas the part -- that's the part that has never worked. >> that's always been the problem. >> it's always been the problem, that we haven't built anything that with can last after we leave.2i+iq frankly there isn't evidence that there'snything there now. >> that's absolutely right. what the americans have built -- in other words, an afghan administration is being totally wiped out by the taliban in the south. i mean,hey've -- in the last two months, they've killed three top officials, including karzai's brother. now, these were the power figures in the south who controlled the afghan administration, the -- >> rose: in kandahar?in kandaha. if you knock out three people like that, i mean, you know, karzai's running around trying to find replacements. nobody wants to go to kandahar, because -- you know, nobody wants to take that risk, because they know there will be a bomb -- i mean, they kill these

people by putting bombs in the turban. this is a new innovation. so the real point is does -- is the u.s. going have a partner to which it can transition to? in other words, when it leaves, will there be a partner who is sufficiently strong enough to hold the country together? >> rose: and it looksincreasing. >> yeah. >> rose: some say the thing thee governance part of it. >> that's the piece. ev if you take karzai's half-brother, one these people who was assassinated, these are deeply unpopular people. they -- you know, they rule in the way that warlords or mafia bossesdo. theyre not popular people, but this is what we've built, you know. >> rose: even though they wereny effective? >> you know, they were effective at carrying on dayo day. they were effective at helping the americans find people that

they wted to kill and capture. >> rose: and they were noteffecr because of corruption? >> mostly. corruption and failed dysfunctional governance. nothing works. so -- and all u have to do really -- i mean f you go to kandahar, walk out on the street and art talking to people. everyone will tell you a story. they say the government came and plowed down my store and took the land. you know, i'm going to go join the taliban. >> rose: so when you come backte both doing now, and you go to washington and you ask people, who's in charge of afghan/pakistan policy, what do they tell you? >> well, they don't tell us anything, but, i mean, the impression certainly in pakistan and in afghanistan is that the policy is not being run out of the white house. it's run out of the cia and the pentagon. you know, then you ask -- >> rose: look who's in charge.e.

this is the worrying part. where is the u.s. political strategy in afghastan? it seems to be missing. the milita is dictating, the cia is dictating the show. >> rose: this is holbrook'snigh. >> exactly right. >> this is what he suggled against. >> it's all stick and not much carrot. no governance. what are we building? we're killing a lot of people. we're not building anything. >> rose: when history iswrittena failed effort as it was a failed russian effort as it was a failed british effort? >> i don't like to predict the future, but -- >> rose: you can see the cards.e pretty bad. >> rose: what could turn itarou? >> well, i think if we had been having this conversation about -- i mean, this is apples and oranges, but having this conversation with about iraq in 2007 at the height of the surge, it was a nightmare.

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u i think the real danger -- i mean i think the most likely scenario for something really catastrophic there is if you had something like another mumbai attack, like you had in 2008, which it appears -- >> rose: in india?it india. it appears it was carried out with at least some assistance and/or knowledge of the asi, the pakistani intelligence. >> rose: why would they do that? >> well, i mean that's another question, but i think -- i think the danger is you get another one of those, the indians aren't going to wait. they're going to go. they're going to go into pakistan. they're going to feel a pressure to -- >> rose: you mean a land waracr? >> they'll do something. they'll do airstrikes or something. then you have the escalation

with two nuclear powers, one of which is a deeply unstable place. >> rose: that's a nightmarescen. >> it's the nightmare scenario, and it's not that unlikely. it's really not. that's scary right now. >> exactly what dexter is saying, what has made everything much, much worse is the breakdown in relations with the u.s. >> rose: between pakistan andth? >> between pakistan an the u.s. it's a very very, very dangerous -- >> rose: is this because of the? >> no, it's been building up over many issuesver the last year, but the icing on the cake was the killing of bin laden. the u.s. has been demanding many things from the pakistani military, which they've not been able to -- or have been unwilling to do. >> rose: unwilling or unable?we. you know, the military has been overextended and there's no doubt, because they have to watch the indian border, fight the -- both the pakistani taliban, the afghan

taban, al-qaeda is there. i mean, tom, dick and harry is there in pakistan. but the other real problem that we are faced is that everything else, you know, the economy is going down the tubes. >> rose: right.huge ethic proble arriving because of this meltdown situation. what is absolutely critical, we've got to get on to some kind of relationship with the u.s., because, of course, that means at the moment the imf won't talk to us, the international donors won't talk to us. you need the u.s. for this. the problem here that i see is, again, that there's no real leadership in the state department. i mean, who's running pakistan, for example? hillary doesn't seem to be interested. she was very interested. shs probably too busy with the arab spring and other things going on. but again, you know, the negotiations are being done by the u.s. military. now, with the pakistani military. i mean, you know, now is --s

that the way t go back to -- to win back pakistan? i don't think so, you know. there doesn't seem to be, again, the leadership in the white house and the state department way political strategy as to how do we woo pakistan back, bring pakistan back into the fold? >> rose: this is all very, very. >> yeah. >> rose: in part, you don't wano lives in a lost cause. >> well, you know, if you stand back and look at pakistan, what's happened in pakistan today is the culmination, these currents unfolding there for 30 year the main one being the kind covert support by the pistani state of various militant groups, whether it's the taliban orthos that carried out the

mumbai attack. there's an alphabet soup of these groups. what's happened is, some of these groups are strong enough to challenge the state, particularly as the state collapses. so that's the problem. these groups a this problem is many, many years in the making. and it's still gng on. i mean, the pakistani double game. i mean, all the evidence suggests that it's still happening, that the pakistani state, that the militarys still supporting these same groups. >> rose: is the military orthey difference? >> well, how much building there is of these things by people at the top -- >> rose: tell me why it is thatk to, including admirable mullen, including everybody else, they always say we have no evidence at this leadership at all knew about this, was involved in this at all in terms of knowing about and looking the other way about

osama bin laden. >> that's a trickier question. look, i think the bottom line is this, the bottom line is that what's the alternative? the alternative is we just cut pakistan loose? we cut off the money? then it really does fall into the ocean. >> rose: that's the dilemmarigh. >> that's the dilemma. so it's costing a lot of money. it's up to $3 billion a year. but what's the alternative? i mean, you know, nobody's got any better ideas at this point. >> rose: thank you.great to see. >> rose: jorge castaneda ishere. he's a writer, a political scientist, and a teacher. he servedas mexico's foreign minister from 2000 to 2003 under former president vincente fox. he's currently atew york university, and his latest book is "mexico and the mexican," examining where mexico is today and what it needs to do to

thrive in the 21st century. i'm pleased to have jorge castaneda back at this table. >> thanks for having me back. >> rose: so we all see and heart the drug cartels are doing, fueled by american demand, and all the money that's involved, all the violence. 50,000 people have been killed. is that the principal issue for mexico today? >> well, it's the principal everyday issue. it's the issue that dominates the news. it's the issue that dominates debates in congress. it's the issue that dominates conversations in homes and dinners, etc. it's not necessarily the main substantive issue, but there's a lot of people being killed. mexico was a country until five years ago with relatively low levels of violence. this is one of the points i try to make in the book. over the past 30 years, violence has been descending. homicides have tripled i five year we're now back to levels like brazil. the people can't help talking about this and can't help

worrying about this. some people believe thathinks a cost worth paying. others like myself think it's not a cost worth paying, but it's very hard -- >> rose: a cost worth paying fo? >> that's the whole point. what in exchange do we have for the 50,000 dead? we have caught a few important drug kingpins, yes, and -- >> rose: yesterday or the daybe. this guy that kills everybody. >> it' important, but how many dead does each one of those kingpins captured worth? $10,000? $15,000? 20,000? they seize weapons. there's some seizures of cocaine, of marijuana, of heroin, though not a hell of a lot. we have enormous costs, but the benefits, the results are difficult to see. so more and more people in mexico are wondering whether is this all worth it. >> you've got a strong state there, or not? >> it's a very strong state. it's a competent, strong state.

corrupt perhaps here and there, ineffective here and there. we have an army that precisely because it has never been very rich or powerful or well trained has never been tempted to take power. mexico has had civilian governments since the 1940s, and there's never been any suspicn or even hint of a military takeover, unlike t rest of latin america. >> is the military free of eruption? >> no, it's it's not free of corruption, t -- >> rose: no less than thejudici? >> probably better than the police, but it's an army which is not ready to fight a war. >> rose: a drug war?any war. any other war wasn't going to happen anyway. who are we going to fig against? we always say, we should declare war on the united states, lose, and they get a marshall plan. that's what we should be doing. that's not going to happe happe.

>> rose: declare defeat.exactly. get it over quickly. >> rose: you tried running as a. do you believe you could take care of this problem? >> it's a problem you have to manage, it's not a problem you're going to solve. as long as americans consume drugs -- >> rose: and there's moneyinvol. >> it's not going to stop. yocan have changes in the drugs that americans consume, but there's been no real reduction -- >> rose: don't understandwhy --t in every society where there's a huge drug demand, there's a great call for all kinds of social action, treatment and everything else, but the demand comes primarily from the united states. nonotwithstanding that, i don't understand why an army and state can't take care of this. >> well, i think it can, but at such a cost that soety ends up saying, i'm not willing to pay for that.

>> rose: a mility state,spendint of human rights violations, a lot of deterioration of the country's image. mexico lives off tourism to a large extent. >> rose: if things condition as? >> it's been hurt already. the alternative is winning the war or losing it. you'd rather win, but if the alternative is having a war or losing, maybe you'd rather not have the war. >> rose: you try to make theargs war is -- >> it's not worth it. it's much more costly than any conceivable benefit. we have to move to legalization. at some point if the united states doesn't want to move forward, we move forward on our own. remember,anada maintained legal alcohol production during prohibition. >> rose: right, exactly.they we-

>> rose: a lot of trucks camedo. >> they were happy, doing just fine. >> rose: this book is reallyabom achieving its greatness. >> yeah. that's a great way of putting it. >> rose: okay, good.and so what? what restricts mexico from greatness? >> basically the point i try to make, charlie, is that the traits of the national mexican character -- national character, what exactly is that? this is not an academic book for anthropologists. >> rose: or social guests.thosee to build a nation, mican individualism, version of the conflict, mexican suspicion of the rest of the world and intro version, suspect of the law in a sense was a helpful factor for many years because the laws were impossible to comply with that. >> rose: what kind of laws were? >> what we were talking about a

little while ago, not allowing foreigners to own property in baja california, a place that you like well. >> rose: the baja peninsula.at t americans to be in baja, to have land and homes there. first we pass a law saying they can't do it. then we find a trust fund mechanism that makes it possible. so the lack of respect for the law in that sense there for a certain amount of time was helpful. all of these traits have become totally dysfunctional. >> rose: mico is aindividualist? >> very individualistic. >> rose: prove your point.we caf associatns mexicans belong to. tax deductiv association and -- >> rose: a libertarian instincta tremendous suspion of collective action. we still don't have class action suits in mexico. the notion doesn't exist yet.

some laws have been passed, but they haven't come in to force yet. every type of collective enterprise in mexico simply doesn't exist. mexicans refuse to live in vertical housing. every mexican wants to live in his own little home. one of another. all of this has -- there's reasons for it, none of this is either congenital, there's historical, economical, social reasons for all of these this, but these traits of the mexico can national character have become incrediblyysfunctional today. for example, our aversion to competition. we hate competition in mexico, because competition means somebody wins and somebody loses. we don't like to have people lose. we're th world's champions by far in holding guinness world book of records records in absolutely absurd undertakings. the largest taco in the world. the largest number of people

kissing each other multaneously someone else at the same time. >> rose: how many hot dogs youc. >> we're the world champions. the biggest skating rink in mexico city, the biggest skating rink in the world. in mexico city? why do we hold all these records? because we want to compete when ere's no competition. who else wants to cook the biggest taco in the world? nobody else does. can't have a market economy without commission. >> rose: you've got a goodecono. >> it's doing -- it will be growing maybe 4.5 this year. >> rose: better than us.better h barely. >> rose: better than europe.yeae growing at rates much higher, 7 or 8, like chil chile, peru, and

argentina. >> rose: those who say numberont mexico, it's brazil. >> it makes mexicans upset. brazilians love to poke their fingers in our bellies and rub us the wrong way on this issue. they're right, they're doing very well. we're not doing w. we should be doing things they're not doing. >> rose: do they have anythingt? >> they don't have these traits of charter. for example, brazil is a country that is very strong immigrant -- >> rose: more european.and afrit exactly immigrants. ey were slaves. there was no congest, but genocide of the few communities that exist there when the spanish and portuguese arrived. there was a fortunately structured, high arcual civilization, very sophisticated one despite human sacrifice and

what have you, very sophisticated civilization, which was practically destroyed, not anile hated, but destroyed. that makes a big difference. brazil was never conquered, it was lonized, but not conquered. mexico was colonized and conquered. big difference. >> rose: does mexico have afore? >> we have a passive foreign policy right now. we should have a more active one. our international relations is tied what happens to the u.s. one out of every nine mexicans live in the united states. >> rose: you live here foumonth? >> i live here four months of the year and teach at nyu. >> rose: what do you do theother when y're in mexic city? >> i pretty much hang out. >> rose: hang out?with my compa. try to make enough here while i'here to work less than when

i'm there. >> rose: you work four months o. >> i write and read, but i don't have a permanent job anymore. >> rose: what advice do you havg at what it just went through, this economic dance in washington? >> i'm really disappointed, though i understand that the little attention the obama administration has paid to mexico, other than on drugs. it has paid a lot of attention on drugs, but it has not pushed on immigration reform. it has not pushed on building a north american economic community. it has not pushed on getting involved with mexican infrastructure. >> rose: george bush was goingts second term. >> he later acknowledged that he made a mistakeby not doing it i'm sure president obama will acknowledge it later on. he'll try to do it, but he it gets stuck? the senate each time, because you need 60 votes in the senate

for immigration reform. you don't have it. on the other hand, obama hasn't made immigration reform an essential part of his agenda. there's no real problem in mexico, but there's also a huge opportunity that's being lost. >> rose: could mexico could be ? >> we export more than brazil does. we export about 50% more every year than brazil does. >> rose: in terms of dollaramou? >> in dollar amounts. the problem we export almost everything to the united states, whereas brazil has a diversified base. >> ros china is theirleading -- >> their leading export, for chile and pe peru. it's mostly food materials. food,opper, iron, poultry. we export cars to the united states, refrigerators. we export stuff with a lot of imported content.

but nonetheless, our overall value exports are higher than brazil's we have a competitive export sector. problem is it's so linked to the united states, the u.s. tanks, we tank right away. much more than other countries in latin america who have a more devicefied market for their exports. >> rose: as the united statesano late attention to latin america? >> sometimes you wonder if it's not a good thing for the u.s. not to pay attention at the end of the day. >> rose: or maybe a good thingf. >> at least for us sometimes, when theu.s. doesn't pay attention. it depends on what countries. country like brazil, chile today, even argentina, you're a. in mexico, everything in mexico, is linke to the united states. 90% of the tourists that go to mexico go from the united states. 90% of our trade is with the

united states. 100% of the remittances we receive come from the united states. 70% of foreign investment -- >> rose: can politicians change? >> they always say that. it's geography. it's not an economic policy. nobody decided let's be neighbors with the united states. we are. once we are, it's logical that all this happens. why should the europeans comeghz mexico in greater numbers than the americans when it's a two-hour flight from the united states, some the best resorts in mexico and it's a 10-hour flight from mexico? americans are going to come and europeans are not. men live look americans live in mexico. a lot of people. 1 million. >> rose: what are they doingthe? >> they hang out. they're retired, mi retired. they he a great time. their social security checks, or whatever retirement, their

401(k)s go a long way. they have adequate medical care. >> rose: good food?good food, cf all sorts. great golf courses, as you know, from baja. it's a great country to retire in. >> rose: what the he are wedoin? >> the weather's fantastic. that's why there a million. that's why they're there. they know what they're doing. >> rose: okay.absolutely. >> rose: but in terms ofcalderos he doing? is everything he does overshadowed by what's happening in the drug war? >> it's overshadowed. he's done very well in some areas. he's done very well in health. we'll have almost universal healthcare by the time he leaves. >> rose: something we could loo? >> it's a copay private/public partnership for poor people. it's not a bad system. we had a traditional social protection scheme along european lines before. he's broadened this, although fox started brit him, but in general it's been very successful there.

very successful in housing. 5 million mexican families, 1 out of every 5, has acquired a new home in the last 10 years. >> rose: there's a growingddle-. >> mexico is now a middle cls society. i really emphasis this in the book. barely, huh in it's not 80%, 70%, it's 55%, 60%, but that's an enormous achievement for mexico. this has happened in the last 15 years. x's term, and calderon's term. in these areas, calderon has done very well. combating poverty he's done well also. he's not done well in my opinion on the drug business. he's not done well in terms of having the economy grow. he's certainly not wel in trying to dismantle mexico's huge monopoly, public or private. >>ose: aren't they on theattack? >> sort of, sort of, sort of. >> rose: okay.but there is a len

against carl -- >> it was just a fine. about a billion dollars. but he can appeal this until he's blue in thes face. he will probably end up paying a very mal small part of this fin, because he has great lawyers, very intelligent, and skillful politician, not just a businessman. >> rose: who does he supportpol? >> everybody. he has a finger in every pie. he does thatvery well. you know, there hasn't a real frontal attack, for example, forcing him to divest himself, either of the cellphone company or of the landline company. one of the two. he's got both monopolies. 80% of both markets. get rid of one of the two. there's been nothing done on the television front to open up a third national private nona pay network. hasn't happened. >> rose: is that because thegov? >> doesn't allow it, and it's

scared of the television networks, the existing networks. so it doesn't allow it. general electric and nbc universal went to mexico, talked with calderon, and calderon said no, can't do it. sorry. >> rose: latin america istrendi? >> it's doing very well. by and large, latin america today is doing better than ever. it's a democratic region. it's a region where the middle class is growing in mexico, brazil, chile, colombia -- >> rose: it's got a youngpopula. >> with a few exceptions, but brazil, a young population. mexico a young population. it's thriving. middle-class is growing. human rights are respected more than ever. the economies are growing. there's some discussion about whether it's a great idea to have an economy booming just because the chinese and the numbered have an insatiable appetite for national resources and raw materials. >> rose: for the obvious reasonf your raw materials or something

else? >> there's nothing with getting riof them as long as the other guys keep buying them. >> rose: they might stop buyingd therefore you -- one of your sources of revenue is suddenly dried up. >> you can do that, when you're in, let's say, australia or new zealand. when you have 190 million people like brazil, maybe it's not a good idea, because it's not clear at you can have all those people live only on commodity exports. today that is not the case. brazil exports othe stuff from jet planes to computers to all sorts of things, but the percentage in its exports, of commodities is growing more and more every day. if the chinese stop buying soybeans, there will be a problem in brazil. those are threats on the horizon. the region is doing better than it's done before. there's a corruption problem. there's a drug problem in some places, but just in some places, mexico and central america

mainly. we come back to the issue, why don't the -- do the other countries -- why doesn't peru, which grows more cocoa leave than colombia, why doesn't peru have a major drug war problem? >> rose: why?because alan garcit left office two weeks ago, decided when the colombian growers were moved back to peru, he said, to hell with it, i don't care, let them grow all the cocoa leaf they want, as long as it leaves here where they process it and goes north. not my problem. i'm not going to spend lives or money or image on this iss. this is an american problem. >> rose: how do you think thisa? >> ia similar fashion. we don't grow cocaine- >> rose: i understand, but youte problem? >> ig we shouldignore the problem that involves drugs passing from south america to the united states. we're a transit point -- >> rose: ignore the problemmean? >> do what we did before

calderon declared his war. manage it, contain it. >> rose: the drugs didn't begin. >> of course not. the drugs have been going on different years we didn't have 50,000 dead. we had drugs moving through the country moving to the north. >> rose: it's not gotten muchmof calderon -- >> american demand hasn't grown. it hasn't diminished, but it hasn't grown. >> rose: therefore somethingelsf the way drugs are dealt. >> that's maybe where the fact of declaring a war makes it more violent. maybe the thing is to not declare a war. and legalize. >> rose: that's different.the t. attack collateral damage, kidnappings, extortion -- >> rose: takes the profit out o? >> takes the profit out of it, the drunk people have less money to buy weapons, to recruit foot soldiers, to corrupt officials less money, less killing, less corruption.

it's not a panacea, but it's part of the solution. >> rose: great to have you here. really appreciate it.