Zakaria: This is stupid government
September 30th, 2013
10:04 AM ET

Zakaria: This is stupid government

CNN speaks with Fareed about the gridlock in Washington, the U.S. economy and why the lack of investment in America’s future matters. This is an edited version of the transcript.

President Obama’s former defense secretary, Leon Panetta, spelled out the price of governing from crisis to crisis.  He wrote recently in an op-ed, "U.S. citizens will lose trust in our system of governing and the world will view the United States as less able to back its word with power."

How much does this eternal internal struggle in Washington damage us in the eyes of the world?

I think it does. Right now, we don't have a competitor. And so it seems as though we can careen from crisis to crisis and there really doesn't seem to be much of a price to pay. With the American economy, the recovery is continuing.

But there are two areas. First is the credibility of American government. We benefit enormously from the fact that the dollar is the reserve currency of the world and our Treasury bills are the reserve investments of the world. If that changes, if people start worrying about getting repaid – as they should frankly worry, given what we're doing – that would change things dramatically. It raises huge costs for the United States.

The second is, in all this crisis management, nobody is talking about what we should be doing for the long term in this country. We are seriously underfunding investments in education, in infrastructure, in basic science. That's the seed capital that produces growth. You know, we had these slogans where people said it's not about big government or small government. It's about smart government. Well, right now what we are doing is stupid government.

And when you look at how petty and stupid it is in Washington, and sometimes there's a news event around the world that really puts it in perspective. For example, more than 60 people killed in Kenya, terrorists attacking a mall, raising a lot of fears about soft targets around the world and here in the United States.

The Al Qaeda leader Ayman al-Zawahiri said he's encouraged his followers to force the United States to spend more on security in order to, quote, "bleed America economically." Does all the fighting over the budget telegraph an economic vulnerability?

Well, I think people see that we're dysfunctional. They see that we can't get our act together, we don't have a strategic plan.  I wouldn't worry too much about Zawahiri. He hasn't been able to orchestrate anything in years. That al Qaeda central, the guys that planned 9/11, are really on their heels. We've pushed them back.

He's just throwing out an insult.

He's just trying to get something going. He knows that the only thing he can do, really, is try to encourage somebody out there to walk into a mall because he can't plan any of it.

And by the way, I hate to put it this way. If we spent more on security right now, it would be good for the economy. What the economy needs is more spending and more consumption.

Switching gears. Russia’s leader, Vladimir Putin, took to the New York Times recently, where he criticized the president and his policies, and he did that directly to the American people. And then the president's 2008 Republican opponent, Senator John McCain, responded with an anti-Putin op-ed to the Russian people. He said this: "I believe you deserve the opportunity to improve your lives in an economy that is built to last and benefit the many, not just the powerful few."

He was writing to the Russian people about an economy that benefits everybody. And we looked at these statistics. In 1989, the year the Berlin Wall fell, the ratio of CEO compensation to the average worker was 58 to one. Last year it was 273 to one. The poverty rate in '89 was 12.8 percent. Last year it was 15 percent. 

The typical American family now makes less than it did in 1989, Fareed, when you adjust for inflation…A lot of people here are saying, wait, I don't feel like this economy is fair for me.

Look, we're a lot better off than Russia, but I think your point is valid.  And part of this is broad structural trends. There's globalization, there's technological change, there's the rise of the knowledge economy – all that creates a winner-take-all system. And the successful CEOs tend to do very well, partly because their compensation is tied to the stock which rises.

But that's all the more reason why we should be making public investments in education, in daycare, in things that can help people move up the ladder of opportunity.  I don't begrudge CEOs doing very well, but I want to make sure that anyone can get to be a CEO and the game is not set so that if you get to school when you're 6 years-old and you're malnourished and you haven't had any kind of pre-K, we now know you're not going to do well in school, and that means you're not going to get into a good college. And that's the trend we have to stop.

And again, as I say, part of that is our stupid government, that is, the inability to get anything done means we don't invest. We don't spend much money on poor people in America. We think we do. We spend a lot on the middle class. We have lots of subsidies, lots of…

Tax breaks.

…and a bunch on the rich, but the poor are actually neglected, and it's something of a scandal.

One of the things that's clear is the country with the most prepared and best educated workforce is the one that's going to win. The next leader is the one with the best workforce. Are we investing in our workforce?

We're not at all in the sense that we're talking about. What does it mean to have a good workforce? It means you need to have them educated and you need to have the ability to retrain them because some jobs are going to go away, some industries are going away. We do early education very badly. We do secondary education badly and we do job training badly. And in all these cases, while there are lots of reforms that need to take place, it's also true that you just have to spend more money on some of the areas we're not spending it on, and I can't see Washington doing that right now.

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Topics: Economy • United States

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soundoff (543 Responses)
  1. Mitchel

    The most responsible person for American failure is: Hillary Clinton. She damaged US image, has no sound politics, is selfish and not trustworthy. We need new leaders we can trust, but NO 'clinton family'.

    September 30, 2013 at 11:04 am |
    • George patton

      Quite true Mitchel, quite true. I too was very disgusted with Hilary Clinton's arrogance and self righteousness as she defended our right to bully the rest of the world!!!

      September 30, 2013 at 11:32 am |
      • j. von hettlingen

        Let's hope that the GOPs realise what a reckless and irresponsible bunch their Tea Party compatriots are! They are taking the country's credibility hostage, just because they hate the Obamacare.

        October 3, 2013 at 12:49 pm |
    • Jimbo

      Quite a bit of a stretch to blame Hillary for CURRENT problems, especially ones related to the economy. Same with Bill Clinton, because his presidency was over a decade ago.

      September 30, 2013 at 1:21 pm |
    • Eddie B

      and you my son are an id**t paid off by the Koch Bro.

      September 30, 2013 at 1:36 pm |
    • Ronnie

      Let the Hillary bashing begin.....Republicans are so afraid of her running on 2016 that they will say anything to start their Presidential Election propaganda.

      September 30, 2013 at 1:37 pm |
    • Boo

      Just come out of your coma when Bush left office?

      September 30, 2013 at 1:37 pm |
    • Rick

      That is a preposterous statement. Nowadays the image of America overseas has nothing to do with Hillary. I have friends in Australia and Canada who cannot understand how the Republican Party could be so selfish, "my way or the highway". The Affordable Care Act is now the law of the land and has NOTHING to do with the budget. Most of all it is incredible that the mayority of Americans allow a minority to behave in such way. America wake up!

      September 30, 2013 at 1:50 pm |
      • cliffintex

        How odd, I've colleagues in Canada, England & Australia that are cautioning us about the ACA.

        September 30, 2013 at 2:27 pm |
    • 9hydra

      Your pants-wetting terror at the idea of Hillary running in 2016 is noted. I'd be terrified too, if Carnival Cruz was my candidate.

      September 30, 2013 at 1:54 pm |
    • Durundal

      Did any of you fools even pretend to read and comprehend what the article was saying before you predictably started shouting your 1di0t1c rhetoric? drop your backwoods agendas and narrow minded interpretations and go pick up a book or something already

      September 30, 2013 at 2:09 pm |
      • Garrett from Texas

        Says the person who uses "1d10t" and no period at the end of his/her sentence.

        September 30, 2013 at 2:32 pm |
    • Person

      Phhhhhhssst! Anti-Hillary Troll-Begon!

      September 30, 2013 at 2:16 pm |
    • bob

      Are you kidding me? Are you really that mentally deficient?
      Take a good look folks. THIS is what is killing America. This kind of blaind hatred and ignorance. Hillary Clinton is not even remotely connected to the current crisis du jour, nor most of the others, and he's blaming ALL of America's problems on her. A democracy elects the government that it deserves, and frankly the current Congress is a perfect representation of people like this 'genius'.

      September 30, 2013 at 2:28 pm |
    • Perilous

      Kind of sad how terribly frightened of intelligent, powerful women you are. Get used to it, Bubba.

      September 30, 2013 at 2:47 pm |
    • Leslie

      Smart as a brick Mitchel.. smart as a brick.

      September 30, 2013 at 5:39 pm |
    • Ted

      Worry that Clinton will win 2016 – keep worrying, she will, and you will be angry and miserable.

      September 30, 2013 at 6:16 pm |
  2. George patton

    Fareed Zakaria is right for a change. Yes, this government is quite stupid indeed. We need to turn over our military bases in Germany to the Czechs, Poles and Hungarians to man and bring our boys home. The same is true in Asia where we have bases in J apan and South Korea. These bases can just as easily be manned by the Philippinos and the Vietnamese, for instance. Furthermore, we don't need to patrol the Indian Ocean with our navy since, India, Australia, Iran and South Africa have navies of their own. This alone will go a long way toward balancing the national budget!!!

    September 30, 2013 at 11:30 am |
  3. JAL

    This is all about influence. Sooner or later, there is a margin call.

    September 30, 2013 at 11:54 am |
  4. Nancy

    The message from the president, since his first days in office, is restated in this analysis: investment in education and infrastructure is critical if this country is going to keep its edge. Right now, our political system is so fragmented by partisanship that neither side has raised these priorities in years. Boehner and the GOP have caved to the extremist Tea Party, the agenda of which has insidiously put this country on the road to ruin. (You don't have to carry a bomb to be a terrorist.) FZ is correct here.

    September 30, 2013 at 12:05 pm |
  5. sly

    Why do you think they call Republicans "The Party of Stupid"?

    Government will be funded without a tiny whimper from the neo-nazi's aka Tea Billies.

    As always, America will win. Our great President will win. Democrats will win.

    We've won every political fight in the past 8 years, and we will continue to win for the next 8 years. These are good times for America. Thank you Mr. President.

    September 30, 2013 at 1:17 pm |
    • GK in WA

      Sly – Be careful and do not spill the kool-aid!!

      September 30, 2013 at 1:22 pm |
    • ml

      I see you are on the one sided wagon who thinks Democrats can do no wrong. They all are doing wrong and if you can't see that join the military that defends your rights and tell the ones that are in harms way that they and their families will not receive pay because they get to go home on th weekend to their families instead of trying to figue out a solution to this mess. They take fire every day in some areas and now have to worry if there families are going to be taken care of while they are defending your rights to complain.

      September 30, 2013 at 1:27 pm |
      • sly

        ml, I too am disappointed that the Republicans have disgraced our military, and are threatening to shut them down.

        I was disappointed that Republicans were afraid our military would lose to Iran/Syria, so they abandoned support to take on genocide in Syria. It took a strong US President to stand up to the world, shake the big stick, and force a negotiated solution, with NO Republican support (save McCain).

        Our President has provided good funding for our military, he has used our military force effectively, and remains one of their biggest supporters.

        Now, if we can just get the Tea Billies out of our lives, our great nation will continue to prosper.

        September 30, 2013 at 2:12 pm |
      • bob

        Because no one in the military votes democrat...ever.
        Oh wait nearly half of them do (49%), which is actually more than the public at large (45%).
        Semper Fi

        September 30, 2013 at 2:32 pm |
    • Ian

      Sly, you point out that the Democrats have won every political battle since Obama (or even before) has been elected. Then maybe you can answer this for has a budget never been passed while Obama has been our leader? At one point, we had a Democratic President (Obama), House, and Senate, and they STILL could not accomplish their most basic function of passing a budget, but they never forgot to pass their pay raises. As a matter of fact, this country is STILL running on the budgets passed under President Bush, with continuing resolutions since then...I am glad you feel good about "winning." Is your nickname Charlie Sheen?

      September 30, 2013 at 1:35 pm |
      • 9hydra

        The Ryan budget was sent to the Senate just this year, and they revised and sent it back to the House, in regular order. And Boehner sat on it. You can't blame the President or the Democratic Senate just because Boehner won't call a conference to come up with a compromise budget. You can, however, blame the extreme conservatives in his caucus who are threatening every GOP member with primaries if they don't cave to extremist views.

        September 30, 2013 at 1:59 pm |
      • Ponder This

        Um... the Senate sent their budget to the House who promptly set in under someone's desk to die.

        September 30, 2013 at 4:06 pm |
  6. Daniel6

    Nancy-these "Extremist Tea Party" people are the only rational minds as best I can tell-or should we just keep spending and printing our selves to Argentina. Wake up America-

    September 30, 2013 at 1:20 pm |
    • bob

      Yes, its rational to use myths and legends and not facts and science.
      It's rational to advocate people die in the street instead of get insurance coverage.
      Its rational to defend the current overpriced, underproductive healthcare system which is the WORST of all developed first world nations.
      Its rational to cause a worldwide depression the likes of which has never been seen over a political battle they lost 5 years ago.
      Its rational to advocate revolution and spilling the blood of your fellow Americans because they disagree with you, and you lost the last political fight (hint: democracy involves the risk of your side losing).

      Yes, those tea baggers are sooooo "rational".

      September 30, 2013 at 2:36 pm |
  7. ml

    Everyone is at fault with this. There is no one party to blame as there is enough to go around to all who have a part in this to include the American people who think we should give to every other country in the world but our own. We need to take care of our people as I see nobody coming to our aid. Quit pointing fingers at one another and fix the problem. All politicians should be in office every day until they reach an agreement if not their pay should be stopped as well.

    September 30, 2013 at 1:23 pm |
    • 9hydra

      If House Speaker Boehner put forward a clean bill, without the Obamacare nonsense there are enough Republicans and Democrats who care enough about keeping our government open to vote for it.

      Shutting down the government, going over the fiscal cliff, or refusing to pay the bills our country owes are not ways to negotiate health care reform.

      September 30, 2013 at 2:02 pm |
      • cliffintex

        Obama has vowed to veto any bill that includes defunding the ACA.

        September 30, 2013 at 2:31 pm |
  8. beevee

    This is absolutely stupid and I blame the GOP leadership entirely for their failure to work with the POTUS in solving our domestic and financial problems. Because of these idiots in office weh are so close to a financial disaster. is there a way to get all these nuts out of office with a no confidence motion?

    September 30, 2013 at 1:32 pm |
  9. dnokc

    It's called LEADERSHIP sir, and you would be correct, the empty.

    September 30, 2013 at 1:33 pm |
    • 9hydra

      That's true. Speaker Boehner is the weakest Speaker in recent memory. He is completely beholden to the extreme far-right in his caucus and is incapable to holding them in check.

      September 30, 2013 at 2:04 pm |
  10. theemptyone1

    "Well, I think people see that we're dysfunctional."

    The entire nation, its multicultural society, and in fact the entire West is dysfunctional. That we need an immigrant from Egypt to tell us this is proof enough of that.

    September 30, 2013 at 1:33 pm |
  11. Cesar1912

    This is one of the most incompetent Congress and Senate we have ever had. Sure our government from the 40's and 50's were still plagued by corruption and issues, but they would surely know when to come together, leave their differences behind, inn order for our people not to suffer. What is our government trying to do by risking yet once again our credit history internationally? Do they want our credit downgraded again, meaning our rates will increase and our ability to borrown money cheaply decreased? How can we finally shake up our government? Talking about things that will never happen like changing their pay or benefits is a waste of time. We need real progressive changes and actions, we are sick of this, we need bipartisanship that really cares about our country and our people and we need it NOW!

    September 30, 2013 at 1:35 pm |
  12. J.D.

    "Dysfunctional" says it all, loudly and clearly. But who's really listening in the US...?

    September 30, 2013 at 1:39 pm |
  13. TiglathPileser

    'by the people, for the people, of the people', individuals can be smart, people are stupid, we are presently reaping the benefit of that.

    September 30, 2013 at 1:40 pm |
  14. Dave in IL

    "We are seriously underfunding investments in education, in infrastructure, in basic science". That's true but it's not because we aren't spending the money, it's because the money is funding a bureaucracy of administrators and teachers to pay for their salaries and exorbitant pension and healthcare benefits which politicians have used to buy votes.

    September 30, 2013 at 1:41 pm |
  15. Chad

    Point a finger point a finger. That's all politicians can do. its like a really bad episode of "survivor" . Most Americans, truth be told, are fed up with both sides. If a Democrat says the sky is blue a Republican will say its not just to oppose them.
    America once the solid Nation of moral stability and for doing what is right is slipping fast. The Nation is like a family with money problems, it typically becomes dysfunctional, argues and struggles day to day week to week. Sound familiar??

    Until the powers that be get the budget on track and start getting the debt down, the American people will struggle.

    September 30, 2013 at 1:42 pm |
  16. Judgmentallady

    I don't understand... when manager in any American company is not able to put all people under him , the board of directors , unions and all other different forces, to work together to achieve good results, we call this bad management ... When the manager of our country could not figure out how to work with people he should work to run the country we blame them not him. Why is this?

    September 30, 2013 at 1:43 pm |
    • TiglathPileser

      because your perception of how an American company operates is wrong, they do exactly the same things as the government...hence the economic issue.

      September 30, 2013 at 1:54 pm |
      • Judgmentallady

        Interesting assumption , but I'm working 20 years in American high-tech, and managers who not deliver results, but blame everybody around sooner or later laid off or forced to make early retirement.

        September 30, 2013 at 1:59 pm |
    • mytake

      The president does not have the same power as a business man. They can fire their employees. The president has to deal with congress. Have you ever dealt with someone who wont compromise?

      September 30, 2013 at 2:29 pm |
  17. Nophah Kingweigh

    Teabillies rule. We're number one!!!!! The earth is still flat. Rick Perry is an intelligent man. The truck is paid for. "He was just helping that little sheep over the fence"...

    September 30, 2013 at 1:48 pm |
  18. Hamilton

    If the Republicans proposed actions to improve the country, many of us (Democrat, Independent, and Republican) would support them. Examples include: a plan to lower the cost of health care to the people (that is not what Ryan's plan does); an infrastructure bank; elimination of unneeded government programs; revisions to the tax code (business and individual) to abolish unfair tax breaks and lower overall rates; and a plan to solve the immigration crisis.

    Instead, we get endless talking, talking talking, and keep the uninsured without health care. And more destroy the economy and diminish the standing of the U.S. in the world. What are they thinking?

    September 30, 2013 at 1:48 pm |
    • kbh

      Agree. quit saying no to everything and start putting up reasonable solutions that will benefit the majority. The political system is broken, as is health care, education, etc. Let's start working together to make things better, as we are all in this together.

      September 30, 2013 at 2:10 pm |
    • cliffintex

      The problem is that few want solutions. Most want to "win" an argument. The rhetoric is vile on both sides – read these posts. Throw them all out and replace them with common folk (no lawyers).

      September 30, 2013 at 2:37 pm |
  19. jl

    Remember the words: "We will do EVERYTHING to ensure that this President fails." They made it personal versus the good of the people. Live with the consequences of YOUR stupidity.

    September 30, 2013 at 1:49 pm |
  20. Judgmentallady

    With every year budget debate, I wonder about some Freakonomics statistics, what we, the people who paying taxes, really want to fund from our tax money. We all hear mantras : education, infrastructure, R&D, but do we really.
    It would be interesting if with tax form people will put % of their money they want to put to each of federal program, with the ability to drill down in names and programs.

    September 30, 2013 at 1:54 pm |
  21. e

    It looks like if you don't get your ducks in a row pretty soon. It will be the end of democracy and the fall of USA. Time to smell the coffee.....

    September 30, 2013 at 1:54 pm |
  22. gkh1977

    We need to break up the two party system as it simply doesn't work. At this point, even a single party system borderlining authoritarianism would be more preferable than this incompetent, dysfunctional mess we have right now. A complete house cleaning of DC is beyond necessary right now, including the agents of legalized corruption that is the special interest groups and Super PACs.

    Only problem? Far too many Americans are simply too uneducated and ignorant to become informed voters who cast ballots with their minds. Instead they defer to their passions or religious indoctrination. The future of the "greatest nation on earth" (yeah right) is indeed quite bleak if this government and this voter base carries on, business as usual style.

    September 30, 2013 at 1:55 pm |
    • Judgmentallady

      If your wish about one party will be granted, I will recommend you to run from this country as far as you can. You don't know what it's look like to live under one party, which not accountable to anyone and I wish you never will.

      September 30, 2013 at 2:14 pm |
  23. Julie Labrouste

    "U.S. citizens will lose trust in our system of governing and the world will view the United States as less able to back its word with power." – This happened quite some time ago.

    September 30, 2013 at 2:01 pm |
  24. Mike Texoma

    What is going on here is much bigger than Obamacare. Obanmacare is simply a convenient label. It is about shutting down the government, and always has been, Darrell Issa to the contrary notwithstanding. They will do it by starving the beast, refusing to pass a budget. They will do it by refusing to extend the debt limit and wrecking America's credit. It is about forcibly dismantling the government in an effort to make it much smaller. It would take too much time and too much political capital to attack big government program by program, so their answer has been to take a cleaver to it in shutdown fashion. They could not do it by the election process because the American people are not with them in this. Now, to rescue America from the cleaver, Americans need to stand up and make themselves heard.

    September 30, 2013 at 2:03 pm |
  25. conoclast

    As long as the US population remains as one of the worst-educated in the industrial world we can only expect the same kind of ignorance & stupidity from our elected "leaders".

    The world is watching our infantile governmental shenanigans very closely, we can be sure of that!

    September 30, 2013 at 2:07 pm |
  26. Han

    Republicans say parts of the Obamacare designed to give low-income people insurance will make companies give them even less hours to avoid the insurance mandate. Instead of coming up with better ways to prevent the exploitation, they agree with the exploitation and don't want the law at all. Does anyone see what's wrong here? Instead of fixing the employers' exploitation, they want to get rid of everything for the poor. It's clear which side they are on when it comes to Wall Street or Main Street.

    September 30, 2013 at 2:10 pm |
  27. conoclast

    Of course it's 'stupid government'! What else can it be when one party utterly refuses to acknowledge defeat and continues to campaign as if it were still 2008? If the shoe were on the other foot the cries of "treason" from the right wing would be deafening!

    September 30, 2013 at 2:12 pm |
  28. Mike Texoma

    Somebody elected these "starve the beast" conservatives to office. If you voted to elect Darrell Issa or Eric Cantor or Rand Paul or this guy Meadows from North Carolina, then you are getting exactly what you voted for. For the love of America, the next time you have the opportunity to cast your ballot, think carefully about what your priorities really are.

    September 30, 2013 at 2:14 pm |
  29. US

    Say something we don't know. WHAT YOU SAY IS SO OBVIOUS. Get your IQ together and say something smart already – stop repeating what others say and we know.

    September 30, 2013 at 2:16 pm |
  30. Blair Watson

    The VERY 'inconvenient' truth is that the U.S. govt. is technically bankrupt & sinking ever-deeper into its debt abyss. The U.S. Treasury's website shows the debt now exceeding $16.73T. To compare, the value of the American economy is ~$15.8T.

    A July 2013 U.S. Office of Management and Budget report revealed that between this year & 2023, Washington plans to borrow another $6.6T (min.). Extrapolated data showed that from 2024 onward, the govt. will have to borrow at least $550B annually to cover its expenses.

    Six weeks ago, FOX News reported that Univ. of CA (San Diego) economics professor James Hamilton indicated that "the real amount [of the fed. debt] is $70 trillion – not $16.9 trillion... Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, and actions taken by the Federal Reserve as well as the cost of other government trust funds."

    Earlier this year, a Bloomberg News report said that "interest payments on the debt will become a growing burden, the CBO [Congressional Budget Office] estimated [in Feb.]... By 2023, the government will spend more than $850 billion annually on interest on the debt - more than it is projected to spend that year on the Defense Department."

    In Aug. 2011, NPR interviewed Boston Univ. economics prof. Laurence Kotlikoff, who said: "If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap. That's our true indebtedness."

    Three weeks ago CNBC reported that "43 percent" of American households "aren't paying any federal income tax."


    September 30, 2013 at 2:16 pm |
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