♪ welcome to "amanpour" on pbs. tonight america open for business with stock markets at record highs and unemployment at a 17-year low. but is president trump right to claim all the credit? my discussion with the former treasury secretary larry summers and conservative thinking niall ferguson. plus, president trump's foreign policy and the rise and rise of china. my conversation with kevin osnos of "the new yorker." ♪ ♪

"amanpour" on pbs was made possible by the generous support of roslyn p. walter. ♪ good evening, everyone. welcome to the program. i'm christiane amanpour in london with the global perspective. the american president takes every opportunity to tout america's booming economy as the success story of his first year in office, whether on twitter, last week at the capitalist mecca in davos, switzerland, or tomorrow during his state of the union address. >> there has never been a better time to hire, to build, to invest and to grow in the united states. america is open for business and we are competitive once again. >> so is president trump's tax reform responsible for reversing the american carnage that he deride it at his inaugural last year? and is the boom sustainable? joining me now from new york is the economist and former u.s. treasury secretary larry summers

and from stanford university in california, the historian and writer niall ferguson, whose latest book is "the square and the tower." gentlemen, welcome to the program as we fry try do dig do into what is happening with the u.s. economy. so can i ask you both to take up the premise that i pose? first and former treasury secretary, larry summers, is the president right to take this amount of credit for a booming stock market and, as he says, america back in business? >> i don't think so. the economy's growth rate last year was below its long-term average. if you look at the upwards revision in forecasts, they were much greater for europe and for japan than they were for the united states. in common currency terms, the europe and japanese stock markets rose faster than ours did. and if this was some kind of mecca of american capitalism,

why wouldn't the dollar be going up rather than the dollar going down? that doesn't suggest that we're open for business in some remarkable way. i think the right interpretation is that after many years of crisis, the global economy has started to pick up for reasons that aren't related to president trump. he's not the president of the whol whole world. and the united states and the market has been a beneficiary of that. the claims of credit are unfounded. >> you can't ignore the fact it is a booming stock market over the last year. that coupled with the tax, and especially the corporate tax slashing is very attractive i guess basically to your crowd in davos. >> not my crowd. i wasn't -- >> no, but your like-minded crowd. >> and i'm not a -- i don't know about that. i'm not a -- i'm not a ceo and i don't -- i don't think i'm in

step with those who are behaving i think in some cases almost sycophantically towards the president. yes, if you cut the taxes on major companies, major companies will be grateful that you did that. but is there a basis for assuming that this is going to create some kind of enduring prosperity? i don't think there's anything in the data that suggests that. what we do know is that we're going to be piling up debts at an even more rapid rate than we were before. i think over time we will come to regret the magnitude and the distribution of these tax cuts. >> niall, to you, i mean you've heard secretary summers talk about other economies doing better, other stock markets around the world doing better, the president is not president of the world, and yet there was a huge welcome and a reception for him in davos. do you give him credit for this -- these stats that he is touting? >> well, they certainly didn't

help him with swiss rolls at davos, but that didn't come as a huge surprise to me. look, i'll disappoint you a bit, christiane, by not disagreeing entirely with larry. i think we have to set what is going on in the u.s. into some kind of global context, but i do think it is important to recognize that something is happening here. it is not entirely unfounded. after all, if you look back on the response of markets and business opinion to trump's election, from the minute that it became clear he'd won there was a surge in business confidence, big business and small business confidence. ever since then i think there's been a strange disconnect which people find hard to process between the political news, which just seems to be one disaster after another -- see michael wolff's book "fire and fury" -- and the economic realities as reflected in financial markets which, as you rightly say, have surged. now, you can't give trump all of the credit, but it would be very strange indeed if an economist

of larry summers' stature was to claim it made no difference that a republican won as opposed to a democrat hillary clinton who essentially promised more of the same. and let's emphasize two things that have been done concretely, not only has there been a big tax cut for corporations, i think more importantly this administration is driving a deregulation agenda that is extremely heartening from the point of view of business. i think that gets almost no coverage in the media because it is not very glamorous, but i think from the vantage point of the board room this is the stuff that really counts. so i think we have to recognize that there is some kind of trump trade at work. it has to be said in the context of global conditions. you would have to say central banks still matter more than presidents when it comes to monetary conditions and therefore market conditions, but he is a variable. he is a factor. i find it hard to imagine, with all due respect to larry summers' friends in the democratic party, that the mood would be the same if hillary

clinton had been elected. >> i'll get to larry to ask about hillary clinton, but let me ask you, niall, apparently there's not much evidence to suggest that regulation or deregulation boosts or otherwise the economy. i want to ask you whether you think the forgotten who donald trump is always talking about, his base, are the ones who will benefit from these corporate tax cuts and other tax cuts and the tax reform? because we've just seen walmart has said, you know, for instance it has announced some bonuses, entry level raises, but at the same time it laid off thousands of workers. according to reuters, just 2% of u.s. adults said they got a raise, bonus or other additional benefit because of the tax cut. i guess the people who voted for it who matter, where do they stand in all of this? >> well, i've argued all along that populists seldom deliver to their base, just to make it clear to your viewers i was not a trump supporter and i'm not here speaking on behalf of

president trump. but, you see, the lesson of history is that you can get elected promising income gains, real income gains for lower income families in middle america, but what ends up happening is that they generally don't get the pay-off. it is a bit early to tell how far this is going to feed through to the key swing states that delivered him the electoral college and the white house. i mean i think there's evidence that wages are rising, but the problem is they're rising faster in places like california near where i'm situated, near the stanford campus, than they are in, let's say, wisconsin or michigan or rural pennsylvania, the places that delivered for trump. so i don't think it is possible to argue yet that all of the benefits of the tax cuts are going to flow to the 1%. i think one has to wait and see just how this plays out in the economy at large, and i think workers may see some improvement. the trouble is they may not be the workers that trump really wants to pay off. but one last point, christiane, which is important, in the realm

of populism voters don't just vote with their pocketbooks. there's a solid 38% to 40% of voters who are going to stay on board with trump as long as he keeps delivering on what you might call the culture wars front. i have a sense many people who voted for donald trump back in november 2016 didn't expect a pot of gold at the end of the rainbow. if you talk to people in those states, they don't really expect the 1980s to come back magically and automobile production to expand, employing huge numbers of people. they're realistic i think. what they do expect is a kind of change of tone, and what they voted for was a repudiation of what the elites on the two coasts have come to represent, which was not just globalization, not just free trade, not just easy immigration, but also multiculturalism. s base on those cultural ring to issues. >> right. so, larry, i mean that's a long litany of, frankly, what trump's voters like and want and expect.

you've said that this economy seems to be on a sugar high. what do you think that those people can expect, the people who he was elected by? >> i don't think much is going to flow through to them. there's some cosmetic things like the walmart announcement, i think most of the benefits are going to go into share buy backs, are going to go into measures that benefit those who are most fortunate. yes, there will be some wage increases, but that's a consequence of the fact that there's some long-standing trends pointing towards more tightness in labor markets. i agree with niall that trump has a profound appeal to nativism, people who want to see america look like it did 50 years ago. they are drawn to large amounts of what he is saying, including the forceful opposition to

immigration including the kind of sentiments that were sparked by his comments about confederate statutes. yes, there certainly is a constituency for all of that. but i don't see the evidence that it is really translating into important economic benefits. look, on deregulation, of course if you remove regulations in a short run businesses are going to like it. the problem is that when the financial system becomes less stable, it doesn't collapse over night but you have a greater risk of financial problems. when you do away with environmental restrictions, you don't destroy the environment over night, but over time you are more likely to have the kind of thing that happened in the gulf of mexico a few years ago, the kind of destruction of wilderness that we've seen in other points in our history. so i think it is much too early to come to any kind of balance

sheet on the deregulation. look, there just is a problem for the view that the president and his friends want to push, which is if this was such a great time for investment in america you'd expect the capital would be coming in and the dollar would be going way up. if there was something unsound about this and people were in doubt, then you would expect to see the dollar going down. and, of course, when the dollar goes down things that are priced in dollars like stocks go up, but that's the evidence that you have an unhealthy and an unsound kind of prosperity, which is the kind of thing i talked about when i referred to sugar high. >> just quickly on that issue, what do you make then of apple saying it is going to repatriate billions and billions of dollars and reinvest in the united states? >> apple was holding the money that it was going to repatriate in dollars in global banks.

it is a pure accounting transaction that doesn't have a major economic substance in terms of job creation. >> well, i just want to move on that theme to niall because the title of his latest book is "the square and the tower." he talks -- you talk about silicon valley proclaiming to be very decentralized into the square, the network, and yet actually being quite hiarcical and potentially exacerbating the gap. give us that theory of your book. >> it is extraordinary to witness what is happening here in silicon valley. i say as a kind of segue from our last discussion that without facebook and to a lesser extent twitter i don't think donald trump would be president because those platforms were absolutely crucial to his campaign.

so one of the great ironies of 2016 is a community which is very liberal indeed with only a handful of exceptions, that's to say the silicon valley tech community, found itself unwittingly responsible for trump's election, and i think we're still going through the kind of inquest as to how that came about. most of the focus, of course, is on the russian intervention into the election, but i think it is fair to say that whatever russia achieved through facebook advertising and twitter bots was a drop in the ocean compared with what was going on those platforms with american originated content. so silicon valley is in a little bit of a crisis right now as it comes to terms with the reality that it probably bears a very substantial part of the responsibility for trump's election. the other thing i would emphasize is that this liberal community here in silicon valley which loves to preach the virtues of decentralization -- we're all supposed to be net citizens these days in a giant

global community -- must i think admit it is somewhat hypocritical in many of the claims it makes. i point out in "the kwsquare an the tower" one thing is to create enormous wealth for a small number of people, namely the founders and early investors of the companies. >> and you said that the internet may pose a bigger threat to democracies. let me ask you the last point on that, it has been said the liberal world order the u.s. pioneered and led around the world is very much at risk right now. at a who are going to save this world order if it should be saved? >> history, going back to the industrial revolution through the creation of electricity, through the creation of the computer, is that new technologies drive the world forward but they don't do it all steps forward. there's some steps forward and some steps back, and they need to be regulated and appropriate

policies need to be set and social networks aren't going to be any different. it is going to be a huge public policy challenge. >> larry summers, niall ferguson, thank you so much indeed for joining us tonight. so as we heard, countries such as germany and japan are enjoying even bigger booms. another major development is clear. china's economy continues to outperform expectations, and as it grows it gains more influence globally, especially as america pulls back from its traditional leadership role in the world. evan esnos has been covering china and east asia for "the new yorker." his new article called "jared kushner is china's trump card" tracks inside this white house. welcome to the program. >> thanks for having me.

>> you have written extensively now about china and the jared kushner connection. i'm interested because you say that, you know, for a long time everyone has been worried about russia's political influence in the united states, but that the intelligence community is equally worried about china's influence. what exactly are they worried about? >> well, over the last several years china has made a more concerted push to try to practice what's known as influence operations. these are the kind of in some ways conventional intelligence operations that seek to effect policies in foreign countries. the difference i suppose between what's happening -- what russia is doing and china is trying to do is russia after all, as we know, tried to effect the outcome of an outcome of a election in the united states in 2016. china takes a different approach. what they've tried to do is affect the decisionmakers themselves, to try to influence the policy choices that they make. >> let's dig down a little bit because obviously you are suggesting, in fact you have written for "the new yorker" that jared kushner is their connection. that's what you have reported. we know that jared kushner has had many meetings with the

chinese ambassador to washington. is it the fact that he went in to those meetings without the usual support group, the experts, the note keepers, the note takers that worries you? >> well, that's exactly it. you know, in some sense national security 101 is that when you go into a meeting with a diplomat, particularly with a country that is perhaps not an american ally in this case. china occupies a space between being a partner, being a rival. you go in fully equipped with the best minds in the business. you go in with the top specialists in the u.s. government, you go in with note takers, you go in with people to relay a reliable version of events. jared kushner didn't want that, as he said -- and i said as much to us, he didn't want to go using the machinery of government, using the full bureaucracy. he thought if he could get around that he could cut through some of the diplomatic niceties

and try to make progress on the relationships. i should add the intelligence officials we have spoken to about this concept, they were concerned about jared kushner's practices. they also say there's no evidence that it was successful. they were concerned that the way of doing business was leaving himself at risk in ways he didn't need to be. >> we do know because it has been reported by you and others that kushner has very big business interests, or his family operations does, in china and, of course, so does his wife, the president's daughter and adviser, ivanka trump with her fashion business and her trademarks and licenses she has received. >> they have extensive business operations there. to take one example, a recent project had about a quarter of its investment from chinese investors whose names are not disclosed under the terms of the deal. now, the kushner companies and jared kushner himself have said that they have been able to separate him from the business. he resigned as ceo after

january 9tht january 9th, but this points up the fact he remains difficult to untangle from his family business. he retains assets and as long as he does he is vulnerable to the possibility of being compromised. and this is what counterintelligence officials wanted to talk to him about when they briefed him in march. they held a closed-door briefing in jared kushner in which they said to him, they identified him as one of the leading targets of an influence operation in the united states from china but also from other major intelligence services including the russians and the israelis and they wanted him to be on notice this would be an ongoing concern. >> why is this dangerous? why should americans, chinese, europeans care about this? >> you know, in some sense this points to the challenge that the trump administration faced when it came into office under the banner of throwing out the best practices of american governance. what they said was that we are

running against the establishment. we're running against the deep state, as they call it. in practice that means they're often going into the most complicated and sensitive diplomatic negotiations unilaterally disarmed, meaning they're going in without the benefit of expertise, they're going in saying "we're not going to follow the traditional rule billions how do you keep yourself safe, how do you make sure you're advancing american interests." this is part of what has been recognized by american allies and by others around the world as a radical shift in the way america conducts itself as a diplomatic power. after the first u.s./china summit in the spring, chinese officials said and said as much to american officials who later visited that they discovered donald trump was less knowledgeable, less equipped than they expected him to be. they thought he would push back on basic controversial issues, things likity tibet, north korea, and they found he didn't have enough information, didn't know enough to be able to do

that. this marks a break in the tradition of american diplomacy being some of the most sophisticated players around. >> let's dig into the diplomacy because that is obviously incredibly important given the danger north korea poses and the u.s. reliance on china to try to rein in north korea and influence north korea. what do the chinese say? >> china remains wary of king jong-un but also wary of donald trump. this gets to the heart of the problem. from china's perspective they're balancing two unpredictable leaders. for that reason china is conservative in what it is willing to do, not willing to go the extra mile because it is not sure if it does so it can count on donald trump on the other side. >> you have just been to north korea and you have written extensively about it. what did you find in this regard, the whole nuclear confrontation? what did you find the atmosphere to be, the people who you talked to, any difference now and the

previous times you've reported? >> what was interesting about it, christiane, was the degree to which north korean officials i spoke to are following donald trump's every word, every syllable. they follow his twitter feed. they listen to his speeches, they scrutinize them. i was spending time with one of the north korean government analysts whose job is to analyze the american president. in the past they more or less had built up a body of ideas about how american presidents operate. they've sort of had to chuck that out. they truly don't know what to believe. they often ask me questions like, how normal is it for a u.s. secretary of defense or a u.s. secretary of the state to contradict the president on a policy matter like north korea? i was in the position of saying, i mean just as a journalist who was visiting, no, it is not normal, but that's the moment in which we are operating now. for them it is a bit of an improvisation. >> did you come away feeling for all of their questions to you and, you know, their inability

to read president trump, did you feel that they were on the verge of lashing out or are they hunkering down to see what might come their way? >> i would say that i felt that they are not on the verge of lashing out. they don't live as if they are a people who feel as if they are prepared at any moment to enter a conflict that by any rational calculation would lead to the end of north korea. they recognize that the united states is the power that it is, but they also feel that they are in a fight for survival. so the most distinct impression was that if they felt that they are challenged, that they are provoked, that they are facing the end, they are willing to take steps that we would find unthinkable. that is worrisome. i think we have to be realistic about the fact that they are so he is secluded in their own self-image of a country under attack from the united states. in their view they've been under attack from the united states for 70 years.

when we use sort of casual language about provoking a war, about the possibility of nuclear conflict, we have to be concerned about the consequences and take it very seriously. >> i guess in the broader context, how would you describe america's positioning in the pacific right now? how do other countries, whether it is kim jong un or other leaders view america's influence that that region now? >> it is at a moment of tremendous change. china was wary of asserting its role as a primary power in east asia. they wanted to be cautious not to inflame america's anxiety about china's rise. china used to say they would bide their time and not challenge the u.s. overtly. that moment is over. >> and indeed the trans-pacific partnership, tpp has declared itself an 11-member strong unit, free trade unit without the united states. >> this is an important moment. in some sense people expected tpp after the united states withdrew would expire, that would be the end of it.

instead, you found canada and other countries stepped into the breach and said, look, we will seek to maintain the global order the u.s. once chose to lead. the question for the u.s. will be whether or not we want to try to regain that position and reestablish our authority or whether we are more comfortable in an age in which we are not so clearly the primary leader. >> evan osnos, thank you for your insight. >> my pleasure. thanks, christiane. >> my comfort earlier with evan on the continuing global rise of china. that's it for our program tonight. thanks for watching "amanpour" on pbs. join us again tomorrow night. ♪ "amanpour" on pbs was made possible

♪ christian: you're watching "beyond 100 days." our top stories, the deputy director of the fbi steps down with immediate effect. it is believed andrew mccabe was forced out. he faced repeated criticism from president trump. the eu spells out its terms and conditions for the uk's transition period after brexit. britain will have to obey eu rules but will have no say on it. >> it will continue to have all benefits, therefore it must also apply all the eu rules. the single market cannot be [indiscernible] christian: illal