>> welcome to the program. i'm ian bremmer sitting in for charlie rose. we begin this evening with a look at the economy. we're joined first by larry summers. >> there's a long history of presidents proposeing vague, vague huge cuts in the discretionary budget. and then not being able to achieve them. my guess is that at the end of the day he won't get all the tax cuts he wants. he certainly shouldn't get all the tax cuts that he wants. and that he won't get discretionary spending cuts that he wants either. i unlike many people who i agree with on many issues think that some increase in the defense budget probably is a prudent thing. >> we continue with economics

professor and columnist tyler cowen. >> i agree with a lot of the policy solutions proposed by other economists including larry. but i also think they're asking the wrong question. the right question is why is there so little interest in listening to economists. people are in a kind of denial. they want america to go back to an earlier time, make america great again. they're not willing to suffer losses to their own budgets or situations in life. so it's ultimately a psychological and social logical problem. not just one of the economists lecturing people more and more. >> wnd's conclude tontd with foreign policy and an assessment of the trump administration's platform in relationship with russia. we talk to julia loffe of the atlantic an evan oses no of the new yorker what he involved was really an outgrowth of a long-standing tradition in soviet intelligence was the idea of active measures, that is where the title of this piece comes from. is that espionage is traditionally about the collection of foreign secrets, about trying to understand and

anticipate events based on things that foreign powers don't want you to know and then there is something else. which is a kind of covert action. and that's what active measures were. in this case what we saw was an active attempt to try to shift the course of american plilt kal events. and it succeeded frankerly to a degree that i think russian side really didn't thoroughly anticipate. >> the economy, and foreign policy when we continue. >> funding for charlie rose is provided by the following: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications

from our studios in new york city, this is charlie rose. >> good evening, i'm ian bremmer sitting in for charlie rose. we begin this evening with the economy. president trump will seek to boost defense spending by 54 billion dollars in his proposed budget pan for 2018. 10% increase is set to be counter balanced by spending cuts from other federal vegs including the epa and the state department. the proposal expected to be released in march does not plan to change social security and medicare. all this and more concerning the u.s. economy will be the focus of president trump's prime time address to congress on tuesday. joining me now from massachusetts is larry summers. he is a professor at harvard and its former president. of course he also served as treasury secretary under president clinton and as director of president obama's national economic council. i'm pleased to have him on this program. welcome, larry. glad that you are with me.

>> good to be with you, ian. >> you heard the headlines as i have. we've got a big increase in defense pending. everything else that can be pulled back is going to be pulled back. and budget numbers at least for growth for 2017 not three to four percent as they've been talking about. how does this strike all of you from harvard? >> well, i won't speak for harvard. the numbers on the budget, the economic forecast is optimistic but not as ludicris as some feared. raising the defense budget i think is probably a prudent investment in a dangerous world. seeking to combine that with massive tax cuts, i think, means untenable cuts in other parts of the budget. look, we've got more people in the united states who are in military bands than we do who are in the entire foreign

service. in a world where our ability to get along with other countries, our ability to run effective counsel siller offices is is essential to controlling immigration, something the president has talked about, these kinds of slashing of the budget for diplomacy i think is very dangerous. we haven't seen, and it's no accident, what the plans are for domestic budgeting. but people in his world have talked about a two thirds cut in the number of employees at the the epa. anything like that, approaching that, would mean the degradation of environmental regulation to the point where tens if not hundreds of thousands of people would die each year of pollution. we haven't seen the budget plans for other agencies but what kind

of civilization are we going to be if as rumors have it, the federal government zeros out funding for the arts, funding for our culture. so i think this is a budget that is going to be unrealistic to execute and dangerous in terms of the civility and generosity of our society, if it were to pass through the congress. but i think it's very, very unlakely. there's a long history of presidents proposing vague, vague, huge cuts in the discretionary budget and then not being able to achieve them. my guess is that at the end of the day, he won't get all the tax cuts he wants. he certainly shouldn't get all the tax cuts that he wants.

and that he won't get discretion ary sphending cuts that he wants either. i unlake many people who i agree with on many issues think that some increase in the defense budget probably is a prudent thing. >> market response so far has been these guys are geniuses, right. we're at records in the united states. and everybody likes the regulatory pullback. everybody thinks this is stim latif in terms of taxation and infrastructure. do you think that the markets are wildly ahead of themselves? i saw warren buffett just a few hours ago saying actually no, he's still very bullish on the u.s. market right now. >> look, i think people have a tendency to make a mistake and look at markets and think of them as only being driven by what's happening in washington. there are a lot of things happening in the economy that influence markets and so it

wouldn't attribute it all to any kind of reaction entirely to president trump. my sense is that markets may have, may have a bit of a sugar high going. i don't expect tax cuts of the magnitude that most businessmen seem to be looking for to in fact materialize. i think there are much greater risks to the health of the economy from the protectionist policies that the administration may pursue, than many others perceive. i think there's much more uncertainty being created by the presidents proclivity to policy making by tweet. and dealing in terms of one off ad hoc arrangements with particular companies. and i'm not sure just how much is going to materialize in the,

in the regulatory area. so i have a sense that there may be a bit of a sugar high going but that doesn't mean, that doesn't translate for me into some kind of near term economic forecast. and i certainly wouldn't be one of those whose confidently forecasting a crash. but i think many people are seeing increases in fundamental value that don't seem likely to me to materialize as i watch the political process, think about how congress is likely to act. and i think there are real risks to where we're getting vees a vee the rest of the world that in a world where 40% of the profits of the companies in the s&p 500 come from abroad. i think those issues loom pretty

large. and should loom pretty large in thinking about the stock market value of companies. >> so talk about a couple of the big sort of announcements made by steve bannon on strategy. we've heard him talk about dismantling the administrative state. also talk about economic nationalism, certainly a big departure from where the u.s. government has been going. let me address the last one first. on the administrative state, do you see regulatory pieces in the united states that are just vastly greater than they need to be. do you think for example dodd-frank needs to be taken apart, where would you constructively head if that was your agenda right now? >> look, are there excesses in the regulation of community banks? yes. is there more bureaucratization than would be ideal in the

regulation of-- regulation of all financial institutions caused by dodd-frank ra? quite possibly there are. on the other hand, the president's chief economic advisor gary couldhen a-- couldhen a terted the other day that dodd-frank cost billions of dollars. i have asked repeatedly for some backup, some documentation, some support for that claim coming from the president's chief economic advisor. at a time when the total profits of all the banks are less than $200 billion, no response. in the same interview koan talked about how we allow people to eat unsafe foods, some kind of analogy suggesting that we should dismantle the consumer financial protection bureau. i see the things that are done

in credit arrangements to take advantage of unsuspecting people and it what take too long to explain them in detail to your viewers, but they are unconscionable. and there is much more that needs to be done to assure the proper provision of consumer credit, and the unsuspecting people are not stolen from by major financial institutions. so i think the idea that we should show be stripping away consumer financial regulation is cruel and is badly wrong. i look at what has happened to the water supply in flint, michigan, and in other places and i say to myself, do we need to be scaling back the efforts

we make in this country around safe water? do we want to go back to the days of the los angeles smog by a scaling way back what the epa does or by trying to produce some kind of renaissance of the kohlhepp industry? this is very dangerous stuff. pharmaceuticals are more powerful than they've ever been. that's a fantastic thing. we-- are there adjustments that need to be made? i've seen some situations where the fda would do the country a service by accelerating the approval of drugs, particularly in situations where people are desperately ill. but should we in some systemic

way set the stage for more thalidamides by scaling back pharmaceutical regulation? no, we absolutely shouldn't do that. and what i find so disturbing in the approach that the president is taking and that many of those around the president are taking is not that they have views that are different from mine. i have views on most but not all issues go with democratic add administrations, others will differ. but that they seem to believe, they seem to take the concept of alternative facts seriously. >> so how do you balance, on the one hand you have what certainly seems to be a set of policies that would more greatly empower the big corporations and the big banks. on the other hand, you have a

president that seems to be focused very strongly on calling those very players out, saying that they're globalists and they're not focusing on the american worker. >> one part of this is that this is a long tradition that we've seen in latin america. juan perone in argentina is perhaps a classix example. you reject all the experts. you declare yourself to be a tri beun of the workers. and then once you're in power you cut a set of deals to protect a whole set of moneyed interests who then support you in various ways, perpetuate your power. that's a long tradition and it often produces good results in the first few months because businesses get excited and have good animal spirits. but all you have to do is look at the economic history of latin america to know in the long run it's a passport to nowhere.

and i think there's a lot of that that is going on. then there's a separate issue which is these intermit ent threats to companies like what the president did to the air conditioner company or what the president did about the price of air force-- air force one. and that stuff is symbolic. it is really small ball compared to the size of the economy. look, take one example. he probably did delay or maybe even fore stall the movement of 600 jobs to mexico at carrier. on the other hand, the slil and destabilizing character, his rhetoric has destabilized the mexican peso by 15% or more, and that means that every business think being locating in mexico

or the united states now sees a 15% greater cost advantage to mexico, relative to the day that he was elected. that's got to be a far larger threat to ohio or indiana or pennsylvania than whatever could be accomplished with those 600 jobs. so sure, he'll get some mileage out of these particular stories for a little while. but ultimately what's going to matter is conditions on the ground. but ultimately what the president is going to discover is that we live in a world of global supply chains, in which it's not that we import a product from abroad and just eat it or consume it here. it's that we import and then we process and then we add to it, and then there's further stages

of processing abroad. and then it's brought back here and traded. and if we cut off imports we're going to cut ourselves out of that whole process. and there will still be global supply chains and we just won't be part of them. and that's the threat from the approach that the president is taking. >> but there is a real bully pulpit here, isn't there, larry. it's not just a question of him calling a c.e.o. on the carpet or tweeting against them. if he really truly wants to become a job creation president, doesn't the person who controls in principle how the american government is going to engage with corporations, the person who says the defense department is one of your biggest purchasers and so we're going to treat you differently unless you actually invest much more substantially. i recognize the numbers so far have been small. >> i done think so. he could influence his policies.

he could propose a real program of infrastructure investment on a large scale, not a set of tax credits for pipelines that are already going to be built. but a real program of infrastructure investment, that would create a lot of jobs. he could pursue a serious set of regional policies directed at focusing federal efforts on areas with the highest employment. that would make a real dirchtion. he could propose a set of effective wage subsidies directed at the categories of workers who are having the most deficit, that would make a-- difficulty, that would make a difference. but a bunch of meetings with c.e.o.s where he bloviates about

job creation? no, that will not, over time, have any preeshable effect appreciable effect on the level of job creation. that will serve to divert attention from the many issues the country faces from rising mortality and decreasing health to crucial problems in education, to a genuinely decaying infrastructure that are going unaddressed. he may divert some attention from some national failings and failings of his administration, but i don't think there's any evidence to suggest that hectoring about job creation has effects at the level of the millions of jobs that you need to change if you're going to move the needle. >> if you had to go back and

look at what the obama administration could have done significantly better, if you want to pick on one or two quick things that would have a more meaningful shot of actually persisting, what would they have been? >> a country badly under invested in infrastructure during the years 2009 to 2016 but that wasn't because of the obama administration. that was because the congress was unwilling to support substantial increases in infrastructure investment. the country ran a tax system that created a big incentive for capitol to stay abroad. but that was because the congress wasn't willing to agree on a corporate tax reform that wasn't a major giveaway. could the obama administration have done more to promote business confidence? yes. would i have supported that, did

i urge repeatedly the confidence is the cheapest form of stimulus? yes, i did. but i think when you go back and look at the obama administration, the big story, the thing that history will remember, is that everything on the day the president took office looked like it did right after 1929 when the stock market crashed. and while performance certainly could have been much better, it was nothing like the great depression. i think that will be remembered as a positive achievement. i think the concern right now is that a lot of things starting with the stock market are very much looking the way they did in march of the herbert hoover administration. and that was an administration that didn't work out so well for the economy. >> plenty of confidence right now in and around the administration.

larry, i'm sure we'll be talking about it. thanks for joining me today. >> good to be with you. >> we continue our discussion with a look at the well-being of the american people. joining me now from washington d.c. is tyler cowen. he is a professor of economics at george mason university. and columnist for bloomberg view. his new book, the complacent class, the self-defeating quest for the american dream, identifies a crisis in social and economic mobility here in the united states. and i am pleased to have him on this program. tyler, glad. >> hello, ian. >> congratulations on the book, just out today. and wish you well with it. look, a lot of challenging topics in this book. the biggest one hits you right in the face is that the biggest problem we have in the united states right now is that our people are too complacent. why don't i let you define that for a second just for the

reviewers. >> people are seeking too much safety and too much security and at the individual level. this is fine. we enjoy safety and security. but at the aggregate level when everyone does this wend up with a nation that is not sufficiently dynamic. so we have people who are moving across state lines at much lower rates than before. we're afraid to let our kid goings out and play. we're overmedicating ourselves. rates of productivity growth are actually much lower than they used to be. >> so i mean i get complacency when you talk about, you know, sort of a middle class prapszs. i can even understand complacency when you talk about sort of the wealthy. but when you talk about those that really are upset, you know, those that we have pop lism in the u.s. just as we do in europe right now, the bernie sanders vote, the trump vote, are these truly complacent people? >> even for the lower middle class we see a lot of complacency. there is a new ambition basically to get on disability. or if you look at data on unemployed young males, it is

amazing a, how many live at home, b, how much time they spend playing video games, and c how many don't have a drivers' license. so the sense of urgency in the lower middle class isn't there the way it might have been 50 or 60 years ago. >> and when you hear these stats about well, people aren't staying in the same jobs as much as they used to, millenials aren't as committed. they will do three years here, three years there. are you saying is that a wife's tale, is that not really true sth snr. >> that's a wives tale f you look at actual census bureau data people are staying in their jobs longer than ever before as best as we can tell. and rates of moving across state lines, that is down 50% from its peak. so there are different social logical areas. when you look at information tech, that is our most dynamic sector but what do people use it to do. to have amazon ship them packages and watch netflix at home. again it's very comfortable. it's just not all that dime frick a macro point of view. >> do you think that's starting to change in the sense that-- in

other words, how do you get out of that? the demonstrations that you've seen in the united states over the past few weeks, do you think you'll see more ak vism, or is this something that is just a moras that long-term you see no fix for? >> long-term i'm very optimistic. but i think this deeply in, the only way to get out of it is to suffer a fair amount and hit all of the bumps in the road. so the return of protests and demonstrations, the rather unorthodox political culture we have in washington right now, these are a kind of warning sign that the bath we were on, the place ent path, it's not possible any more. in essence in the broad sense of the term, you just can't pay all the bills. >> so we just had larry summers talking about the challenges of making the kind of investments that would be required to lead to real growth for the american worker. if you had policy solutions here that would improve the social contract in the united states, what would they look like?

>> well, i agree with a lot of the policy solutions proposed by other economists including larry. but i also think they're asking the wrong question. the right question is why is there so little interest in lessening to economists. people are in a kind of denial. they want america to go back to an earlier time, make america great again. they are not willing to suffer losses to their own budgets or situations in life. so it's ultimately a psychological and social logical problem. not just one of the economists lecturing people more and more. >> is there a social and cultural issue which is actually quite distinct from the economics here? >> i think the cultural issue is much more important. so there are some very serious wage erosions in america. i don't want to minimize those problems. but actually america is still a pretty wealthy country. and i think what people are really feeling is a perceived loss of control. and people hate that feeling of loss of control, whether it be trade, whether it be immigrants, whether it be their standing in the local community, the erosion of that community itself,

observing an opoid epidemic around them. so it's this psychological issue. people wanting to do something to reassert control again show. >> so then that would imply that solutions from a trump administration might look very different. that it it has a lot more to do with reasserting that control, control overboarders, control over identity. control over families. i mean do you think that's something that trump could actually do? >> i sometimes call trump the placebo president. i think his domestic agenda, he's not sure what it is. i don't yet see that he has the attention to detail to get very much through. he's still not sure what to do about obama care. i think his strategy actually is to try to reform discourse and raise the status of neglected groups and tell them look, someone cares about you. and do that for four years. and in some funny way that might actually work, as a sort of placebo for our troubles.

and we'll get out of those troubles some other way by growing out of them in a painful set of adjustments. it is mostly about the talk. >> so who do you think is-- who is getting this right? because we're seeing these challenges in across the western world right now. where do you think and why do think countries are having a very different experience of their democracies? >> well, the two countries doing it best as far as i can see are canada and australia. and some of that is the residual from having boosts in resource wealth because of china. but with that ebbing some what, they actually do seem to have healthier institutions, more local governance, a clearer sense of their identity. they have made some decisions in the past about accepting my grants. they're the two places where i don't see much of this infection catching on. >> and do you think that there are any lessons that can be learned for the united states from either of those countries? >> i don't think it's easy.

canada in part works as well as it does because it has the united states to rely on. so candace as a hub of invasion is not very strong right now. it hasn't been strong for awhile. in some ways it may even be getting worse. but since they can use and borrow american invasions, they can proceed along some other course and basically use migration to take in high quality professionals. they don't have to do all these grand projects. >> we hear in the united states that it's really the big cities where you have these extraordinary creative classes that is where you are going to see all the innovation. that's where the people are really mixing. but from your book it implies that you're saying no, no, no, that is one more indication of the problem. it's all like for like. are you not getting the dynamism even there. >> exactly. say you went back to america in the 1920s. ask you where is the next wave of big musical innovation coming from. would anyone have said northern mississippi, the delta. hardly anyone thought that at the time. so i think you have to look for places where outsider cultures

can still thrive. oddly in some funny ways washington d.c. is becoming one of those. it's such a formal establishment town. but you know, the fringes you now have some fair amount of creativity, i think. so we're going to find creativity in this country coming exactly where you don't expect it. >> you are just saying that because i live in the fringes of creativity in washington d.c. >> it it northern virginia suburbs, yes. >> so what do you think, does a federal system in the united states, does more decentralization of power state by state, states rights, does that help or hinder this process in your view? >> i think federalism is broken. at the moment i favor it because i feel we need some checks on our executive branch but people are so poorly informed about what their state and local governments are doing, and state and local voting has become more polarized, more partisan. you just vote for the democrat or republican no matter how good or bad a job they're doing. that is another thing that needs fixing. >> so what are the parts, make

us optimistic. what are the parts of the american society right now that you would say actually despite all the trends that you've identified, these are places for hope. these are places where you actually think society is starting to get it more right not less. >> we have two or three big reasons for optimism. i think they're more important than all the reasons for poism. the first is just human talent. more human talent in this country than ever before. and not everyone but a lot of those people actually have a chance to do something. the second reason is essentially information technology. i think up until now we've actually overrated the internet. a lot of it is just fun leisure but the future looking forward, i think we're underrating it and slowly but surely will revolutionize every single economic sector we have. there will be big, big losers from that. but also an enormous amount of wealth created. that will be the american future. we're still the leaders. that will transform everything before us given enough time. >> those two there was a third.

>> i think tolerance, the inherited level of tolerance in the united states compared to our history, to the civil war, to reconstruction, the great depression in the 1960s. in spite of some comments and some leaders on the national scene, i've never actually seen this country have more more tolerance from most people, most businesses, most institutions. >> and would you say that is true despite the great sort that is occurring in the united states right now? >> yes, and i think we will keep that. i think for all the inflammatory rhetoric you hear now, it's probably part of the process where a lot of groups end up being much more accepted. for instance muslims or if you look at the north carolina dispute, i think that will go down in the history books as the event that led transgender individuals to really be accepted into america. >> you look at the level of civic discontent right now, but also link that to apathy. where would you say we're more

likely to see civic discontent actually challenge the model in your book, if in five or ten years time we look back and say actually no, this was-- tyler cowen's book was exactly when people started becoming less complacent. they were becoming less complacent for what reason? >> keep in mind complacency doesn't work forever. it feels good, it's safe and secure. but you run out of the ability to replin-- replenish the sources of your own and your own creativity. so something stops working. that can be a debt crisis as in the case of parts of the euro zone but in the united states i feel it's been a leadership crisis. we have today an unorthodox leader no matter what you may think of him, he cannot pretent-- pretend to really be a leader for all of america. and that's where we're seeing the fraying come first, so to speak. so i think that tipping point for a socialio logical crisis is actually starting now. when i first started writing the book i thought it would come maybe five years from now, seven

years from now, but it seems to come in 2017. >> have you noticed yourself becoming more complacent over the years as the part of this changing u.s. society? >> i tried to remain not clays ent. and i do a lot of that by foreign travel. my last trip was to nigeria. i feel that revitalized my understanding of the world. but i'm someone who has not moved across the state line in 27 years. each year i get a year older and vij lens is the price, correct? >> the complacent class from my friend the economist, congratulations, wish you look with this. >> thank you, ian. >> and we conclude this evening with russia. it is perhaps the biggest foreign policy uncertainty facing the trump administration. representative darrell issa of california has called for a special prosecutor to investigate reported communications between russians and the trump campaign.

meanwhile president trump rejected reports of his ties to russia in a tweet yesterday he called it fake news put out by the democrats. and played up by the media. joining me in washington d.c. is evan osnos of the new yorker, he and his colleagues analyze russia's relationship with the trump administration in a new cover article titled active measures. and here in new york, julie loffe of the atlantic covers politics and world affairs and focuses on russia. i'm pleased to have both of them on this program. welcome. >> thank you. >> so avenue an, your-- efan, your cover, breat piece, a lot of people glad you wrote it, probably not the trump administration. what surprises you most when you look the the amount of confrontation that you see between united states and russia, in the piece you really unpack what the russians have been up to, particularly in a sim et rick warfare against the

u.s. and increasingly the u.s. what coming into this piece you wouldn't have expected now that it's out. >> this piece which really was a collaboration with deafd recommend nick and-- was an attempt to try to say what is actually going on right now in the u.s. russia relationship. i think frankly for a lot of american this was offer the radar screen for the last few years, people weren't paying that much attention. in moscow it turns out there was a lot of attention on where washington was going and on the nature of how these two countries were going to deal with each other. and what we've learned and i think we will learn aamodt lot more, is that really since vladimir putin returned to the presidency in 2012 he has been what has been described to us by u.s. officials and others is on a fairly active footing towards a more hostile, more confrontational relationship with the united states. he believes the yawnted states sought to undermine his own domestic politics, political stability and therefore undertook measures we're now told that would seek to

undermine the legitimacy of our election here and indeed to promote one candidate donald trump over his opponent, hillary clinton. >> and so were you surprised that the u.s. response given that under president obama was as late and as weak as it turned out to be? >> yeah, it it is basically recognized now both from people who were in that white house, in ot bama white house and then also others in hillary clinton's campaign and elsewhere in the intelligence community that the response was muted and it was probably more muted than it should have been. because the united states, the white house knew as of the summer of to 26-- 2016 that there was a serious and sustained effort to try to undermine the legitimacy of this election. and the white house chose not to as one hillary clinton advisor put it, declare this a five alarm fire. the president came out in october. he said this is a russian effort. he acknowledged it, said we'll do something about it but it was not treated in the way that some

people might have wanted which was to go out in front of the nation and say our democratic institutions are under attack. the argument will you hear which say credible argument from the white house at that point was look, we believe that the important thing was to get through this election without further escalation on the russian side, without them actually trying to tamper with the votes in the ballot boxes and we believe that we could bring them to heal, in effect. but i think in retrospect now that the intelligence community and law enforcement community are beginning to really get their arms around the contours, the full scale of this operation, there is a feeling the response was too little and too late. >> julia, that is the-- what you hear from washington. what do you hear from moscow is the americans do this sort of thing all the time, right. i mean we undermine governments. making too much out of mutual antagonism? >> i think it it is a multiple alarm fire and you know, from moscow's point of view there certainly is a lot of hypocrisy,

right in they saw even what happened on kiev in 2013, 2014 as a u.s. effort to more regime change in the region. and that it was-- it had started in iraq and had crawled closer and closer to putin's borders and had even gone into russian borders it self. i think putin really believes in people around him really believed that the prodemocracy protests of the wirnt of 2011, 2012 were another american orchestrated effort to oust putin from power. what i found what efan said-- evan said really true, that you know, the fact that we weren't paying attention to moscow here was part of the problem. you know, i remember i was in moscow when mitt romney who was then running for president in 2012 said russia was america's number one geo political foe. >> he was laughed off the stage here. and i remember laughing it off in moscow. i remember even liberal russians

being offended by that, you know, because they have all these shows that covered you know, what is the american media say about russia. whole hours dedicated to unpacking what we say about them. and they so want to know what we think about them. and to be told that we don't think about them much at all was really insulting. you know, especially people still remember the soviet union when it was, you know, they were going blow for blow with the americans so the fact that they were ignored and kind of disrespected and treated look a bit player, obama called them a fading regional power. what i have heard from american officials who have dealt with the russians, was that they were constantly hearing these grieps from the russians even from putin who thought we just go on forever, with this, you know, you are disrespectful, you just disrespect us. you don't threet us with the respect we feel we deserve. there is a lot of wounded ego

there one thing that came across from this piece is that putin and the creme lynn seems to be pretty mono maniacal on their focus of the united states. how much do you think that is unique to this administration. in other words, are we talking about a tale of two individuals and you bring some new people in from the u.s. perfective that is-- perspective that hasn't been bad, and if it hadn't been for putin, this might have played out differently. >> i think this intelligence operation, which is really what it was could only be understood in putin's origins, where he came from, this is man when the berlin wall was coming down he was in the base am of an intelligence office in berlin shredding documents. ter, an agent ultimately of an idea which was the notion of soviet empire and what the russian people should and could accomplish in the world. then he watched over the course of the next two decades as

russia gradually eroded, lost its position as a leading superpower and reduced to a point where barack obama could describe it it as a regional po-- power. he was beset in his view by the growth of nationalla -- nato, the power of the united states. so what evolve was really an youth growth of a long-standing tradition in soviet intelligence was the idea of active measures, that is where the title of this piece comes from. is that espionage is about the collection of foreign secrets, about trying to understand and anticipate events about things that foreign powers don't want you to know, then there is something else which is a kind of covert action which is involved in trying to influence events. that is what active measures were and what we saws with an active attempt to try to shift the course of american political events. and it succeeded frarnlgly to a degree that i think russian side really didn't thoroughly anticipate. if you talk to-- if you talk to the american intelligence officials who are focused on these issues, they will tell that you this seems to have

succeeded quote unquote beyond a level that the russian side really ever imagined. >> do you think that success here is that we're all paying attention to russia for this or is success something deeper? do you think it showed a level of american vulnerability that people hadn't been aware of. >> well, i think you know, putin, look, this is the difference between the russians and the americans. the americans unlike many other world powers are perfectionists. they think there is a fix it solution to every problem. the russians don't think that way. they don't need a per spect-- perfect solution to something. they don't need to elect a specific candidate. no matter who won in november 2016 the fact that vladimir putin was the major topic of discussion of pretty much every debate and was the subject of the presidential debates in the general election, he won. if hillary clinton won as they expected her to she would have come in, delegitimized badly hop

hobbled by leaks and revelations and stories that she was dying of parkinsons and pneumonia and whatever else she had. they would have won. the fact that they got trump unexpectedly and they won. if trump goes down in flames in the next four years and is impeached and removed from office or is, badly delegitimized in the office they still win because it undermines the whole enterprise of american liberal democracy. and this goes back again to what evan was saying when vladimir putin was in dress den, he was tallly in eastern germany in dress den. >> right. >> and after 1991, at the end of the cold war, right, the cold war was a battle of ideologies. it was soviet communism versus western transatlantic liberal democracy. at the end of the cold war the consensus was transatlantic western style liberal democracy, representative democracy is the better more moral, more effective, more efficient way to govern people.

vladimir putin never agreed with that. and he has been very consistent saying there is no one size fits all way to rule countries. and this doesn't fit us. we don't want to be ruled this ral and ethical than us,more that's not true. and so part of the goal has been to keep his own people from strifing to keep the western model of democracy. to keep people and keep countries that were in the former sofer yet, fear who were former sofer yet republics like georgia, the balance ticks, from-- baltics from strifing to be more like the u.s., strifing to make their governments like western societies and by delegitimizing the west they say they are just as kie otic and corrupt like we are, why would you want to be like them. >> you can see he is vastly successful in getting the world to say in the a great western model out there and much more

relativism, on the other hand when you look at russia itself and their lack of economic growth and opportunity and the feeling within russia that greatness is something that is really well, well beyond, i mean make a country great again, russia is the one that in principal is in most dire need of such a slogan. how does, how do they balance that. >> i don't think russians see it it that way. for me a really eye-opening text was-- the second hand time, which won the nobel prize last year, for literature. >> talking to all of these gorbachev earlier, living their lives. >> over two decades talking to russians about basically the feblght of the soviet collapse on their lives. and what you see is just this massive spiritual vacuum and how important it is. and you see people in that book who participated in horrible atrocities who were victims of atrocities. none the less, miss the soviet unit because otherwise what was the point of it all. russians are a lot like

americans. and they are more like americans than americans want to admit. they need an organizing principle and motivating idea and ideology to feel like their lives make sense. for most of russian history whether it has been under the sars or under putin or the soviet general secretaries, it has been empire. and it is not coincidence that after vladimir putin came back for his third term in 2012 that the word empire made a big resurgence in the media and just, you know, conversations that i had with russians, they would say well you know, at least we live in an empire. i would sake like do you get more milk, do you get more bread because you live in an empire. they spiritually need it and are willing to take an economic hit for it. so when you have deputy prime ministers who is in charge of the space program say you know, russians will tighten their belts for a great cause. next we're going to colonize the moon, he has a point. russians are willing to take, no one knows where the bottom is with russians.

but they're willing, especially when the decline is slow and not precipitous 6789 they're willing to take a hit economicically for a larger idea. >> so evan, where do you think this goes. >> i think the first step in figuring out what the ultimate strategic consequences are in u.s. russian a relationship, the first step really is to understand exactly what happened here. and that's why the center of the action right now is in the intelligence and the law enforcement community and also on the hill. the senate is beginning to realize that there are serious questions here 68 we're at the beginning of this inquirery, not at the end. what is going to happen, are you beginning to see with darrell issa's commenteds about perhaps the need for a special prosecutor, is that members of the legislative branch are discovering that in order for us to make smart choices about our own future with russia, we have to understand exactly what happened in this election. not just who hacked the dnc and john poddesta's email or who was generating propaganda and what is known as an influence campaign but also what was, in

fact, the level of contact between russian representatives and elements of our political system, perhaps even donald trump's campaign. in order for us to do that there has to be a thorough and robust inimirry. only at that point i think will you find that people who really remember the republican party has traditionally stood for very strong national defense. they're the ones who will want to know exactly what russia did to us so we can prevent something like this from happening both to our own political system and also to the political systems of our allies because you have elections coming up this year in a number of states that already discover thadz there is russian int fearance and i think we will begin to know more once we get to a really transparent and robust inquirery into the full scale of russian interference in the united states. >> julia, do you think that the russians understand that they might have overplayed their hand here in the sense that now it's going to be much harder for them to get anything going with the trump administration because of this extraordinary focus? >> you know, i think part of the

point as evan and his colleagues point out in the article is to be overt about it. you know, it's to let us know that they can do this. it's analagous to fsb agents coming too the homes of western diplomats in moscow rearranging their furniture, leaving all the windows open in the middle of winter. they want you to know they were there. they want to be brazen about it, that is part of the point to show us that they can. >> they want sanctions off from europe too, this makes it much harder to bring that about, right? >> it might. but i think there are other goals that they have. you know, part of it is also just, sanctions haven't been as much of a hit on the russian economy as we would like to think. oil was the major hit. and with that they've been able to pull off other maneuvers like through their intervention in syria, negotiate a deal with opec that lowers production, raises oil prices that helps them. so i think they're going to be okay even if sanctions don't get lifted. also the trump administration

doesn't have to formally lift sanctions. they can, you know, ease up on enforcing them. there are all kinds of ways to get around it and russia can get other things done. a key point of what evan said, you know, part of the reason that it's been move sog fast and been so hard for the west to respond, on one hand you have what in the excellent new yorker piece you have i think a defector from the kgb in the west saying, you know, this is western societies are fundamentally vulnerable to this. and in this way the russians are like the 9/11 hijackers. they found a loophole, they used the openness of western society as a weapon against. >> i love that analogy by the way. >> and the other thing is that the reason it is so-- our response is so ad hoc is the russians approach is very ad hoc. i think the hacking campaign and the influence campaign and the selection from what i have learned from the russian and the american side is it was very ad

hoc and opportunityistic. it started off as one thing and then began, developed into something else. you know, they hacked into the dnc servers and while they were in there it was comeun kateing with the d triple c serves, the congressional committee and so they went in there. and so it it was-- they are evolving quite rapidly themselves too. it is kind of like playing whack a mole. >> so evan, last question, to you. everyone says that putin is such an extraordinary chess player. but what i am hearing is that actually you know, the trade craft is extraordinary. the checkers play is great. but is there a long-term actual strategy here here in your view. do they know the card that they're trying to catch. do they know what they're going to do with it when they catch it. >> my own view based on reporting from talking to people who are deeply as involved with it as they can be, is that this was an improvisation. i think julia's description is exactly right. that this was an attempt to

exploit an opportunity in american political culture. in some ways they didn't hack the vote. they hacked the voter. they figured out a way that they could get into our politics and monkey around. which is really the part, that is is the heart of active measures is to create a degree of chaos. to create a degree of turmoil it doesn't require that you have a coherent plausible obtainable objective. at russia is going to the idea successfully undermine the democracy of the united states is a long shot, but what they have done. just the way that we took some of 9/11. requiring us to say let's intis that democratic system. to some degree the exhiv branch, and figure out well, what exactly happened why are we vulnerable. what are we going to do prevent. more about this program visit us

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steves: nimes' arena, which is still in use, is considered the best preserved from ancient rome. it's another fine example of roman engineering and roman propaganda. in the spirit of "give the masses bread and circuses," admission was free. the emperor's agenda was to create a populus that was thoroughly roman, enjoying the same activities and the same entertainment, all thinking as one. the arena still hosts colorful pageantry. and macho men still face dangerous beasts -- bulls. a bullfight à la provençale is more sporting

than the bloody spanish bullfights. a tiny ribbon laced between the horns sits on the bull's forehead. the daredevil fighters, gripping special hooks, try to snare the ribbon. [ man speaking french on loudspeaker ] steves: the loudspeaker announces the reward various local businesses offer to the man who gets the ribbon. it's both advertising -- "pierre's patisserie offers 100 euros" -- and encouragement for the fighters. [ man whistling and shouting ] steves: if the bull pulls a good stunt, the band congratulates him with a tune from the opera "carmen." unlike more bloody bullfights, in provence, the bull, who locals stress dies of old age, always prances proudly out of the arena.

>> announcer: "a kqed television production." >> it's sort of like old fisherman's wharf. it reminds me of old san francisco. >> and you'd be a little bit like jean valjean, with the teeth, whatever. >> and worth the calories, the cholesterol, and the heart