May 15th, 2014
08:45 PM ET

Geithner: Strategy wasn’t about picking Wall Street over Main Street

Fareed speaks with former U.S. Treasury Secretary Tim Geithner about the Obama administration’s response to the financial crisis. Watch the full interview on "Fareed Zakaria GPS," this Sunday at 10 a.m. and 1 p.m. ET on CNN

So the strategy that you adopted has often been criticized. It was criticized at the time and is criticized in retrospect as bailing out Wall Street at the expense of Main Street. What do you say?

It’s a common perception, and it's a completely understandable perception because what you had to do to protect the economy of the country – the average person running a business or just trying to keep their job – what you had to do to protect them in a classic financial panic feels deeply unfair.

It's completely counterintuitive. And that's because the central imperative then is to make sure you prevent the collapse of the system. You keep the lights on. You know, think of the banking system. We don't like to think of this way, but think of it as the power grid. It's like a vital, essential thing. And what you saw in the Great Depression and you saw in countries since then is that if you let panic escalate and that fire burn too, too strong, it's devastating.


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Topics: Economy • GPS Show • United States
May 13th, 2014
02:40 PM ET

'Bubblets' in the U.S. economy?

Watch "Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN

Fareed speaks with Steve Rattner, chairman of Willett Advisors, about the U.S. economy.

Robert Shiller, the economist who predicted both the tech bubble and the housing bubble, says we're back in bubble territory. What do you say to that?

Stocks are expensive. There's no question about that. By any historic measure, we look at the price of stocks relative to the earnings of the underlying companies, they're trading at about 16 times earnings, which is high. It's above its long-term historic average.

And you do see little bits and pieces of what I'll call “bubblets” around in the sense that you had a number of tech stocks that were quite high, Twitter, for example. Now they've started to come back down again.

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Topics: Economy • GPS Show
May 12th, 2014
05:45 PM ET

Is China really about to overtake the U.S.?

For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN

By Global Public Square staff

This month, headlines declared that China could eclipse the United States as the world's biggest economy by as early as this year. But before you start lamenting the end of American dominance – the U.S's 125-year run as the world's economic leader – listen to us. America is still number one. It will be for a while. And, as it turns out, China is OK with that.

Let us explain.

A new report from the World Bank's International Comparison Program says that China is catching up to the U.S. faster than anticipated. In 2005, the ICP estimated China's economy was 43 percent the size of America's. But their latest report, which uses 2011 data, puts China's GDP at $13.5 trillion. That accounts for 87 percent of the U.S. economy, which is $15.5 trillion.

Now, given that China's economy is growing 3 times as fast, it is fair to project that China will surpass the U.S. by year end. So, are we bracing ourselves for a big power shift from West to East, for a new Pacific era?

Well, not exactly. The International Comparison Program based their rankings on a measure called purchasing power parity. PPP, as it's called, estimates the real cost of living – in other words, what money can actually buy you in each country, not how much money you have.


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Topics: China • Economy • United States • What in the World?
America's middle class losing ground
May 7th, 2014
03:28 PM ET

America's middle class losing ground

America's middle class has been the envy of the world for decades. But a comprehensive new study suggests that America has lost yet another number one ranking – its middle class is no longer the richest in the world.

Fareed spoke with the New York Times’ David Leonhardt. Watch the full interview here.

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Topics: Economy • GPS Show • United States
May 6th, 2014
06:48 PM ET

Analyst: America's middle class falling behind

Watch "Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN

Fareed Zakaria speaks with David Leonhardt, editor of the New York Times’ ‘The Upshot,’ about his latest research – and why the American middle class may no longer be the richest in the world. Watch the video for the full interview.

The most startling piece of data was this shift that has taken place in the American middle class. One way of looking at it, which you presented, was if you look at the median income...


…of an American – and that's not the richest person, not the poorest person, it’s the person smack in the middle. And I think the Census Bureau defines it at about $50,000 a year, someone earning $50,000 a year. Look at this chart. Since 1981, that's what's happened.

It's not a good story, is it? In 1981, we had, by far, the richest middle class in the world. And what has happened since then is that income growth in these other countries has been substantially faster for the middle class and the poor.

Now, this is after tax income. That's a question a lot of people have. It's after-tax income. It includes direct government benefits, things like Social Security. So this is really what people have to spend. And it's really worrisome. And it's not just a 30-year trend. You also see it if you look since 2000. In some ways, it's more pronounced in the last 15 years.

This is the stunning one. You see all these other countries had much stronger income growth at the median level. But then since 2000, I mean the United States barely grew at all. FULL POST

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Topics: Economy • GPS Show • Inequality
How women could boost GDP
April 30th, 2014
09:19 AM ET

How women could boost GDP

According to the International Monetary Fund, increasing women's employment rates around the globe could result in huge gains. If women worked at the same level as men in Egypt, the country's GDP could grow by 34 percent. The United Arab Emirates would see an estimated 12 percent boost. Germany and France 4 percent...and even the United States could see 5 percent more growth.

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Topics: Economy • GPS Show • Women
April 29th, 2014
12:23 PM ET

Why the world needs more women in the workplace

For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN

By Global Public Square staff

If you watch even just one episode of "Mad Men," it's clear that since the 1960's, women in the workplace have come a long way. But a new study shows that they still have a long way to go.

Women today make up about half the American workforce, a big leap from the 1960's – the Mad Men era – when they constituted about a third. But, for example, only 23 Fortune 500 companies have CEOs who are women. Or look at average wages – in 1963, a woman in the United States made 59 cents for every dollar a man made. Today, women have made good gains, but on average they make 77 cents for every dollar a male counterpart makes.

The most startling data on women in the workplace, though, came from a study just out from two left-leaning think tanks – the Center for American Progress and the Center for Economic and Policy Research.

It turns out that the most important economic trend of the last 30 years might not be high tech...but rather high employment of women. If women hadn't entered the workforce – by the millions – over the last three decades, the study says, the U.S. economy would be about 11 percent smaller.


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Topics: Economy • What in the World? • Women
April 25th, 2014
03:00 PM ET

What world can teach U.S. about entitlements

By Richard Jackson, Special to CNN

Editor’s note: Richard Jackson is a senior associate at the Center for Strategic and International Studies and author of Lessons from Abroad for the U.S. Entitlement Debate. The views expressed are his own.

America’s long-term budget challenge may have dropped off Washington’s radar, but it has not dropped off the public’s.

According to the Fiscal Confidence Index released last month by the Peter G. Peterson Foundation, 59 percent of the public said that the nation is on the “wrong track in addressing the national debt,” while 67 percent said that their level of concern has increased over the past few years.  The public is right to be concerned.

But what many too often fail to appreciate is that confronting the challenge will require a far-reaching reform of entitlement programs, which make up well over half of federal spending today and account for all of the projected growth in noninterest outlays as a share of GDP over the next three decades. The most recent Congressional Budget Office projections may show that the near-term budget outlook has improved, but the long-term outlook, driven by rising entitlement costs, remains as daunting as ever.


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Topics: Economy • United States
How Obama can make Asia trip a success
April 25th, 2014
12:02 PM ET

How Obama can make Asia trip a success

By William Piekos, Special to CNN

Editor’s note: William Piekos is program coordinator for Asia Studies at the Council on Foreign Relations. The views expressed are his own.

President Barack Obama's trip to Asia this week runs the risk of being just that – another trip to Asia. Recent months have seen a slew of visits to the Asia Pacific – First Lady Michelle Obama, Vice President Joseph Biden, Secretary of State John Kerry, and Secretary of Defense Chuck Hagel have all traveled to the region. Now the president is joining them with a whirlwind trip to Japan, South Korea, Malaysia, and the Philippines. Like all his cabinet members, President Obama will undoubtedly convey the message that the United States will be a central player in Asia for years to come. But he has the opportunity to do more than simply reiterate U.S. interests, and he should make concrete progress toward furthering U.S. economic and security objectives.

In East Asia, President Obama’s job is two-fold. First, he should rejuvenate Trans-Pacific Partnership (TPP) negotiations. Unfortunately, his just-completed state visit to Japan was an ominous sign for the future of the TPP – Obama appears to have made little headway in trade negotiations during his stay in Tokyo, with the two sides still apparently unable to reconcile tariff demands in the agricultural and automobile sectors.

During his stop in Seoul, the president should leverage his presence to persuade South Korean President Park Geun-hye to join the negotiations formally and give the trade pact increased clout. Seoul has already held bilateral talks with some of the TPP’s participants and is party to numerous free trade agreements, including one with the United States. The TPP is one of the pillars of the Obama administration’s Asia pivot; after he leaves East Asia, the president must hope that his top-down efforts will bear fruit in the future.


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Topics: Asia • Economy
Has Bangladesh learned lessons from Rana Plaza tragedy?
April 24th, 2014
09:22 AM ET

Has Bangladesh learned lessons from Rana Plaza tragedy?

By Alyssa Ayres, Special to CNN

Editor’s note: Alyssa Ayres is senior fellow for India, Pakistan, and South Asia at the Council on Foreign Relations. She served as deputy assistant secretary of state for South Asia during 2010-2013. You can follow her @AyresAlyssaThe views expressed are her own.

Today marks the one-year anniversary of the Rana Plaza tragedy in Dhaka, in which more than 1,100 workers perished when the concrete building they were working in collapsed on them. The accident – the world’s worst in the garment industry – focused Bangladeshi minds on the urgent need to improve workplace safety. It also compelled governments, especially the United States and EU, as well as international buyers and retailers sourcing from Bangladesh, to address the issue, resulting in several important public-private commitments to support better working conditions in Bangladesh.

But a year later, despite substantial improvement in raising wages and getting factory inspections underway, progress remains patchy. Indeed, it is increasingly clear that unless Bangladesh moves quickly to truly transform safety conditions in the garment industry, buyers will shift their orders elsewhere.

No one who has seen the poignant image of the Rana Plaza couple uncovered from the rubble, embracing in death, can remain unmoved by the tragedy that befell so many workers. But this association of Bangladesh with factory tragedy has overshadowed arguably the most important lesson of its garment industry: despite its clear problems, the ready-made garment (or RMG) sector has contributed handsomely to Bangladesh’s economic growth, and provided livelihoods for some four million Bangladeshis, mainly women.


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Topics: Asia • Economy
April 21st, 2014
12:05 PM ET

What happened to Brazil?

For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN

By Global Public Square staff

The $32 million cable car in the video has not been used since 2012. There is a federally funded extraterrestrial museum, also abandoned. And there is a multi-billion dollar railroad. It was supposed to help farmers from impoverished remote areas transport soybeans. Construction began there eight years ago. Residents have been displaced, land wrecked, but the railroad will probably never be built.

What if we told you that these shuttered, big-ticket infrastructure projects are in the country that will host the world's biggest sporting event in June? What in the world, right?

We’re talking about Brazil, of course, host of this year's FIFA World Cup and the only major economic power in South America. There's even speculation that bus and rail systems being built for the soccer tournament won't be completed until after the games are over.


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Topics: Brazil • Economy
April 19th, 2014
10:09 AM ET

How U.S. is lagging on quality of life

Fareed speaks with Michael Porter, a professor at the Harvard Business School, about a groundbreaking new Social Progress Index – and how the United States is lagging on many indicators. Watch the video for the full interview or on GPS this Sunday at 10 a.m. and 1 p.m. ET on CNN.

You were shocked at what you learned about America.

Yes, I think this wasn’t the picture of America that I think many of us Americans have – that we are a leader, a social leader, that we've advanced the ball in terms of opportunity and the needs of our citizens. And it shows anything but that.

So if you look at the Social Progress Index, on the whole, what's striking is the top countries are New Zealand, Switzerland, Iceland, these small countries. But basically then a lot of European countries and Canada beat the United States.


The United States is 16, Ireland is ahead of it, Japan is ahead of it, Britain is ahead of it, Germany is ahead of it.


What does that tell us? What does that measure?

So this effort tries to really, for the first time ever, take let's call it the social or community or quality of life dimensions of a society, and capture those in a rigorous measurement framework – using the best data available in the world. That's the best and objective measures of these various multiple things. But of course, social progress is a broad concept.

Right. And that's where you break it down into these subcategories. Health and wellness, Japan is number one, Italy is number two, Switzerland is number three. You have to go all the way to 70 to get to the United States.

It's an area where the U.S. – if you actually look objectively, we're just not delivering. We actually spend the most money on this of any country in the world, probably in all of recorded history, in terms of our health care budget every year. But in terms of the actual outcomes – and by the way, the Social Progress Index measures the outcomes you achieve, not how much you spend, not how much you care, not whether you have a big heart…



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Topics: Economy • GPS Show • United States
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