troops without leaving chaos in its wake? next up, debt, shedding real light on our present situation in the united states and europe. we have the author of a phenomenal new book, phillip kogan. i'll explain. first, here's my take. some of you regular viewers will recall that at the start of the first show of this year i predicted hopefully that the u.s. woo economy would recover nicely in 2012. i'm returning to that topic with some preliminary good news. if you look around the industrialized world, the u.s. economy is the most promising of the bunch. the american recovery is not as vigorous as one might hope, but it is remarkably broadbased. manufacturing is up, including for the first time in 30 years nontechnology manufacturing. retail sales are up. consumer confidence and spending are growing. consider sales are up. the stock market reflects this. >> two areas of the economy that continue to lag are jobs and housing. both critical areas. generating economic growth and profits continues to be easier than creating jobs as this week's data showed. housing, for its part, has traditionally led every recovery since world war ii. this time it hasn't because of the bursting of the housing bubble and the problems associated with mortgages and housing debt. at some point that will end. the united states alone in the industrialized world is demographically dynamic. kids don't want to live with their parents, and that will produce demand for housing, and at that point the recovery will gain full steam. the new process of fracking, and america now has 75 years of natural gas, and most important, it is the world's low cost producer of natural gas. that's why manufacturers like dow chemical are actually opening new factories in the united states. you see, asia has an advantage. lower labor costs, but now the u.s. has an advantage, lower energy costs than asia, and this is a process that has just begun. add all this together, and you have the prospects of a broadbased sustainable american recovery. >> it would send oil prices sky-high and could have other spill-over effects, and to shed light on that issue, we begin the show with a conversation with ehud barack, so let's get started. joining me from tel aviv, the former prime minister and current defense minister of israel, ehud barack. welcome back to the show. >> thank you for having me. >> you have long argued that we need more pressure on iran. president obama announced recently that he believes that there is sufficient oil in the world. the supplies of oil in the world are sufficient to pursue an even more stringent set of sanctions. these will be the tightest, harshest sanctions that have ever been put in place, i think, against any country. do you think this will be enough to put the kind of pressure on iran that you have ped stwloosh no one can predict, fareed. it's clear that the depths of the sanctions different than what we have in the past, and its impact both the closing of the it probably len courage them to move, but to tell you the truth, we hope for the better, but i don't believe that this amount of sanctions and pressure will bring the iranian leadership to the conclusion that they have to stop their nuclear military program. >> if they were to make -- if the iranians were to make some proposal or agree to some proposal, would you be satisfied with the israeli government -- would the israeli deposit be satisfied if they were to accept some version of an international inspections regime or to accept that the enriched uranium be made in russia? are these kind of compromises ones that you could accept as a solution to this problem? >> fareed well, see the iranian nuclear military program as a challenge for the whole world. not just to israel. we are convinced that to deal with it once its nuclear will be much more complicated, much more dangerous, much more costly in terms of both human life as well as financial. >> mainly the p5 plus one will demand clearly that no more enrichment to 20%. all the enrichment material out of the country to enable and trust the country. >> the p5 plus one will set for much low attrition like just top enriching 20%. it means that basically at the very cheap cost they go to continue their military problem, slightly slower, but without sanctions. that would be a total change of direction for the world. >> if that were to happen, if the iranians were to -- if you were to end up with what you regard as a suboptimal or less than perfect solution, you have argued that israel has a closing window of opportunity to act because at a certain point the iranian sites get hardened. do you believe it would then be necessary? is there a time pressure on you? do you believe that you have only a certain amount of time before which military strikes would not be effective against iran? >> you know, by definition we have limited time. every quarter it becomes shorter by a quarter. i expressed my view that we don't have to make a decision next week. it's not a matter of years before israel it will be practically kind of deprived from the possibility to contemplate what could be done. that's not the real issue. i really feel it is a major turn for the whole world. are you really seeing it as a critical time for the rest of the world as well. i really think that the tightest possible sanctions -- that should be racheted in the way that you effectively -- >> you don't have much more than a year, so in effect, you're saying that there is a fairly clear timeline here that around sometime in the next nine to 12 months something has to get negotiated that stops iranian enrichment. otherwise, israel will feel compelled to act. >> you know, you go beyond -- you go much beyond what i have said. we don't have any decision about what to do or a date for decision, but it's clear that for us it's critical. i strongly believe because for us i belief that it's critical for you as well. i read into your article you, fareed and me, we have differences about it, but i think that you are ronning wrong, and i'm right about it. that no new twally destruction will serve as a modifier or stabilizer in this case because we are now -- israel is not either the united states or this, and it's basically sanctions out there the only option by now, and the fact t t that. >> the report could not leave a doubt in the mind of any serious person that they will determine to reach nuclear military capability in spite of the determination of the rest of the world it can happen. we feel it urgent. of course, we look at it slightly different from other nations, but we feel it's important to deal with it very seriously and not to remove any option from the table except for containment. those who believe in containment see a ray of hope. i don't believe in containment, so i don't feel how easily it's going to resolve, and i'll be happy to be wrong. >> mr. minister, there's a new book out in the united states called a crisis of zionism by peter binart, and in it he proposes that the west bank and gaza should be described not as the west bank and gaza, not jude aa, but as undemocratic israel. the argument being that you have millions of palestinians there who have no vote and no state. is that a fair characterization of the west bank as undemocratic israel? >> i didn't read the book, so i cannot make a statement about, but it's clear the deeper reason to have these -- a solution of two states for two people is in order to make sure that israel -- within which we'll have a solely jewish majority for generations to come, and beyond which we will have a viable palestinian state with a palestinian majority that will express their identity, their dreams and their aspirations. i think that it's possible. it's that simple. it's possible. it needs goodwill for both sides and readiness to take tough decisions. if israel remains, the only political entity, western of the jordan river, the fact that there are blocks of millions of palestinians and that cannot vote and it makes a problem, and if they can vote, it will make israel a state. it's clear to all of us israelis, including israelis, and that's what broke most of us, including the divide and to understand that the only solution is two stt-state solution, and that is -- the only issue we care about is that you, the execution of the meetings of these two states for solution, the kurt considerations of israel and it's not interested. we'll be taken into account. there are 20 odd states of arab nature. in the region and probably the only member of the u.n., which is destroyed by other members of the u.n. that's a situation that needs to be taken care of by us. we realize we are living in a tough neighborhood. no mercy for the weak, and no second opportunity for those who cannot defend themselves. we want to be strong, ready to protect ourselves at other -- whatever kind of threat, but at the same time stretching out our hand to make peace with any neighbor who is ready for it. >> ehud barack, pleasure to have you on, sir. >> thank you. >> up next, we go from israel to another hotspot. pakistan. right back. 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why not give it to me, he said? it's a message of defiance that also highlights the state of relations between washington and islamabad, the capital of pakistan. i have two superb guests to talk about that relationship as well as another crumbling partnership across the border in afghanistan. amman rasheed is the author of a new book "pakistan on the brink" and in islamabad itself, we are joined by cnn's terror expert peter berger. welcome. emmitt, was it a mistake to have put that bounty on his head? what do you think was the thinking behind it? >> i fear now that, you know, both countries have been in this very tense relationship for the last six months. i fear now what we're seeing is a kind of tit for tat, a kind f of -- a kind of proxy war going on now because pakistan did not open the road when the americans expected. that is the road that is transporting goods from car afternoony up to the afghan forces in afghanistan. that road has been shut now for nearly five months. pakistan was supposed to open that road after a parliamentary debate. it hasn't done so. i think this is an american response to that. a week ago we saw an earlier tit for tat when the chairman -- when the head of sentcomwas in islamabad, and that very day the defense department releases a statement saying that the americans were not responsible for the deaths of 24 pakistani soldiers on the border five months ago. you know, both sides are -- instead of coming together and really healing the rift, i fear they're going further apart. >> you wrote in a piece that it really is time to start a serious conversations with the taliban and find some way to create some political stability. you know, this is something weave all talked about for two or three years, and somehow is it doesn't seem to -- nothing seems to move. is there any sense that there is movement on the u.s. side, the taliban side, karzai side? >> you know, i mean, talks have started. there have been direct meetings between american officials and the taliban in qatar. they have been sometimied for the moment because of all the terrible incidents in afghanistan, but it's very clear that the taliban do want to talk. we should remember, fareed, that it was the taliban that approached the americans for talks two years ago through the germans and through qatar, and they sent messages to the americans saying we want to talk. now, i really believe that the taliban do not want to see the americans leave and really even worse civil war erupting in afghanistan as a result of that. >> so they are looking for some kind of a deal. >> they're looking for a deal with the u.s. so that there can be, first of all, i think, a reduction in the violence. in other words, that they want -- both sides will have to build trust with each other and take measures which will hopefully reduce the violence. ultimately, of course, ending in some kind of cease-fire, and then, you know, they would obviously want to talk to karzai about some kind of power sharing agreement with the afghan government, but i think the decision has to be made in washington that they want to pursue negotiations with greater determination than before. the military -- there will come a time when the military will have to play second fiddle to the negotiations. >> do you get a sense that if there were to be some settlement, if the u.s. were to withdraw, does pakistan believe that the taliban are basically there -- is their path to influence in afghanistan that, you know, the last time around the taliban effectively came to power on the backs of the pakistani army. do they view the return of the taliban as something that they, the pakistani military, want to push for? >> i don't think there's any great desire by the pakistani government to have taliban control afghanistan. not at that time. there's been so much blowback into pakistan by, you know, taliban groups. i think they do want to have control and through the account being network in afghanistan, but that doesn't mean that they want the taliban controlled afghanistan at all, and, you know, the blows are hard on their western border to produce huge refugee flows. pakistan has already lived through that with one of the largest refugee populations in the world during the soviet war. they don't want a repeat of that. i think they want a semi-stable government that isn't aligned with india. they see the taliban -- elements of the taliban as part of that. you know, just zooming outs for one second, fareed, i'm kept cal that negotiations with the taliban will succeed because we've already run a controlled experiment in pakistan repeaedly. the taliban government has done -- the taliban has done a peace deal for the pakistani government in 2006 and 2005 and waziristan, north and south and in 2009, and the taliban instantly took reap of those peace deals as an opportunity to regroup and to kind of spread their influence. i don't think that the taliban are sort of rationale actors. they're a group of henry kissingers in waiting with whom you can do a deal, but not necessarily stick as you indicated at the beginning of this discussion, you know, the -- whatever status they were, they're not going very wrl. we don't have a huge amount of time before 2014, and i think it's much more tornt to be focused on the free and fair election in afghanistan in 2014. awe very predictable eth. if that election is not seen as free and fair and, you know, the resources -- that could be sort of an instigator of a greater conflict in afghanistan, and i think that the u.s. government has put this in as a binary thing. if we have a deal with the taliban, somehow that's solving the afghan problem. if we get to a much larger political problem, then to some degree, a free and fair election in 2014 might begin to solve. >> quick final thought, amed. >> there are going to be so many complications that are not necessarily being addressed by the administration or by nato. for example, not only is there a question of the taliban, but there's a question of a regional dialogue with the neighbors, and, in fact, that regional dialogue was even further away than before, because now the u.s. is at odds with pakistan. the u.s. is at odds with iran. these are key neighbors of afghanistan. how were you going to prevent these countries from interfering in afghanistan after the americans leave in 2014. you have to try and get these countries together now. it doesn't look like this will happen. the internal dynamics, the elections in 2014, what role is the northern alliance are non-pash tuns going to play? these are all very important questions. finally, the economic question. there's no sustainable economy in afghanistan. even ten years after the american intervention. the american forces will leave. thousands of afghans who have been service says the americans will be out of a job. >> thank you for discussing the subject that isn't going to go away. up next, what in the world. understanding the problems in the arab world by exploring events that took place 1,000 years ago. don't miss this. ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 to understand you and your goals... ttd#: 1-800-345-2550 ...so together we can find real-life answers for your ttd#: 1-800-345-2550 real-life retirement. ttd#: 1-800-345-2550 talk to chuck ttd#: 1-800-345-2550 and let's write a script based on your life story. ttd#: 1-800-345-2550 for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years. fight both fast with new tums freshers! concentrated relief that goes to work in seconds and freshens breath. new tums freshers. ♪ tum...tum...tum...tum... tums! ♪ [ male announcer ] fast relief, fresh breath, all in a pocket sized pack. 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