ballistic missile tests and the sinking of the cheonan, the south korean corvette and now the shelling of an island with civilians on it-- merry christmas-- it's not clear to me that the chinese themselves think they have a lot of leverage. >> rose: we continue this evening with congresswoman carolyn maloney, one of the authors of the 9/11 first responders bill. >> we're working on all levels. we are all... all cylinders are working. the new york delegation has made this a top priority and we're highly focused on it and all i can say, charlie, is i am so worried. because if we don't get it passed before christmas, i feel that our nine years of work for our heroes and heroines, it will be impossible to pass hit in the next congress. >> rose: we conclude this evening with a look at the business events of 2010 with josh tyrangiel, the editor of bloomberg business week. >> so what you're seeing is opportunity spreading around the world. now it's a testament to the american system. it's a testament to capitalism, but it's a new game now and emerging markets are absolutely competitive and not rising, they are competitive. and i think challenge for wave the and really for the rest of the censure i have what is the american system going to do to company state. >> rose: a program note, our session on "merchant of venice" which is now on broadway with al pacino will be seen later this week. tonight david sanger, ian bremmer, carolyn maloney and josh tyrangiel when we continue. maybe you want school kids to have more exposure to the arts. maybe you want to provide meals for the needy. or maybe you want to help when the unexpected happens. whatever you want to do, members project from american express can help you take the first step. vote, volunteer, or donate for the causes you believe in at membersproject.com. take charge of making a difference. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: we begin this evening with tensions in the korean peninsula. south korea convicted live fire military exercises today in disputed waters off the north korean coast. the drills came in response to a series of provocations from north korea over the past year. last spring, north korea sang a south korean warship, killing 46 crew members. last month, the country samed abartillery barrage at a south korean island, killing two soldiers and two civilians. despite threatening brutal consequences if today's exercises went ahead, north korea did not retaliate. over the weekend, the u.n. security council had a meeting to discussion texs. disagreements teen the united states and china prevented the adoption of a coordinated statement. also this week, new mexico governor bill richardson met with north korean military leaders in pyongyang. he reportedly secured a deal that will allow nuclear inspectors back into the country. joining me now here in new york, ian bremmer. he is president and founder of the eurasia group. from boston, david sanger, he is chief washington correspondent of the "new york times." i am pleased to have both of them back on this program. welcome. david, where are we in this story? >> you know, with north korea, you're always wondering exactly where you are, but if you take the day's events in the spectrum of the year, we're looking better than it was just a few days or weeks ago. the north koreans did not respond the way they had promised to the south korean drills and that may indicate that they are pulling back from the brink a little bit. the offers that they made to governor richardson to allow "eyeopener" inspectors back in would... i.a.e.a. inspectors back in would begin to restore things back to where they were around the time that president obama came into office. the inspectors left north korea i think in april of 2009. but the situation in terms of the nuclear program is a lot more complex. the north koreans announced a new facility at the main i don't think bee i don't think complex and almost every expert who has looked at this believes that there are other facilities around the country. there's no indication they would let the inspectors outside of... >> i certainly agree we look better than we did yesterday but i saw the north korean statement they said they did not need to respond to the childish behavior of the south koreans but they also said there will be a second strike and a third strike, implying there will be more shelling along the lines of what we've seen before and/or other sorts of provocations. there's one thing we can say about the north koreans since 2006 is that despite international pressure and chinese pressure, they are prepared to continue to and we're also seeing the south korean government is considerably more hard line because of domestic pressure that they have to respond. they put a new minister of defense in place. they've stepped up their military presence in an area that's considered contested by the north koreans. they've been engaging in these exercises that would be seen by the north koreans and the chinese as provocative and about half of the south korean population-- believe it or not-- think it is south koreans are as least as much to blame as the north koreans are. a story that's not getting out very much in the united states. >> rose: why do they believe that? >> cbs news the nature of president lee, talking about a reunification tax that could be put this place on south korean citizens to get ready for what happens when north korea inevitably craters and falls apart, there's enormous polarization in korea, in south korea, between the younger and older generations. and if you're under 30 in south korea, you're much less well disposed to the united states. you're much more well dissupposed to a sunshine policy towards north korea. you're more well disposed towards the chinese. in fact, one thing we've seen from wikileaks is the united states doesn't do a great job in getting broad intelligence on the ground. we saw that with president a cash shillly in georgia and we didn't have any sense of what was happening with the entire population. we're seeing that in taiwan and south korea where obama has a great relationship with the president but not necessarily an understanding of what the whole spectrum looks like in south korea. >> rose: david, tell me what you think is going on inside north korea and whether any of this or all of this has to do with succession. >> well, certainly analysis of the u.s. officials i've talked to is that almost all of the acts of aggression we've seen from north korea in the past year have been about succession. and certainly you go back in north korea's history, wherever there has been a time of succession. >> there have been acts that could be attributed to the heir apparent. when kim jong il, the current president of north korea was being prepared by his father to take over there were a number of acts, including the bombing of the south korean cabinet when they were visiting burma, now myanmar. attacks on blue house, the south korean president's house so all of these things were at the time-- rightly or wrongly-- attributeed to kim jong il. and rightly or wrongly we are now attributing some of the 6-attacks, including to the sinking of the cheonan, to kim jong yuan, his son. it may that during a time of pran session the north koreans believe they can't look weak. it may be the civilian leadership believes a young leader-- and kim jong unis either 25 or 27 or 28 despending on who you believe-- has to build up credibility with the north korean military. if that's the case ian is exactly right. we're going to see more of this next year and the big question is how the south korean respond. i thought it was interesting in the wikileaks document, certainly when we wrote our north korea story out of wikileaks, we began it with a discussion that took place earlier this year between the american ambassador to seoul-- kathleen stevens-- and the vice foreign minister at the time in south korea and they were spending a lunch talking about how how you would buy off chinese acquiescence to the south taking control of what is now north korean territory once the north imploded. that gives you a pretty good idea of where president lee's government is right now. >> rose: eurasia has sort of said the chinese rationalize north korean's action? >> well, "rationalize" might be more assertive span than i would put on it. but certainly the chinese are doing everything possible in the international community to say that they understand that there are two sides here. so that immediately after the shelling of this island, there were some chinese media sources that came out. i'd be hard pressed to believe the chinese government wasn't involved with this. they actually said well, the south koreans were shelling first. then the government can say "we don't know what's going on in the fog of war, we don't want to blame the north koreans." of course, at the security council emergency meeting this weekend, the chinese response was "we do not want to publicly shame the north koreans." now, that has been the consistent chinese policy for years on north korea. but, of course, while this has been going on, the north koreans have gotten more and more assert and their view is, well, the chinese are going to protect them a degree. they're not going to punish them. the real question is how much do the chinese believe that they have over north korea? and frankly after two two years of two nuclear tests and ballistic missile tests and the sinking of the "cheonan" the south korean corvette and now the shelling of an island with civilians on it-- merry christmas-- it's not clear to me the chinese themselves think they have a lot of leverage. the policies they're putting in place are hurting the chinese in terms of improving their own relations with critical allies in the region of the united states. south korea and japan. and yet the chinese are still sticking with north korea. not because they're buddies but because they think it's hard to reign them in. >> that's right gushgs chinese have not been willing to take the risk of finding out how much rev ledge they have. there was a moment when the north koreans gave them trouble in the nuclear arena a few years ago when the chinese temporarily turned off the oil to north korea saying they were having technical difficulties with the pipeline. it sure got the north koreans attention very quickly. they have not been willing to do that so far and when you ask them why not-- i was in beijing just a few weeks ago and posed this question at some meetings we were at out at the central party school where they train the elite-- that the answer that we got back was that you don't want to risk breaching the relationship with north korea at a time of succession. that china needs to maintain its open conduit as the only country that can really talk to the north koreans. so they're not really willing to take the steps that the u.s. or others in the west would like to see china take to bring north korea under control. >> and it may not be a good idea for china to take those steps. >> that's right. >> david is absolutely right, they are acting cautiously but they're acting cautiously in part because they're trying to game why the north koreans are doing this. the steps the north koreans have taken are not about blackmail. they're not... by shell ago south korean island, they're not likely to get more cash from the americans, the japanese and the south koreans as a consequence of that. so it's probably about succession. we don't have any transparency. but there are two different ways you can play succession. one is the succession in internally in north korea is going find but they want to show the rest of the world "you won't push around kim jong un just because he's not well known." that's possible. it's also possible that internally within north korea, this untested, unknown guy isn't really standing up very well, they're concerned, kim jong sill not going to be around that much longer. is he going to be able to ensure a succession for his son once he's gone. and putting the country on a serious war footing and riling up the population and the elites in the military to make sure that you're focused on a war with south korea and that you have succession, that's a real scenario and one the chinese are worried about. >> what is the scenario that the people figure is most realistic and most fearful. >> the scenario that worries the u.s. the most and the one that they have discussed the most, had the military try to plan for the most is either a nor korean implosion-- that is the state collapses and there is a scramble for both territory by south korea and china and for those nuclear weapons, wherever they're hidden away and the best estimates are the north koreans probably have the fuel for six dozen weapons depending on how good they are at designing them. the other scenario is a north korean explosion. that is that in an effort to protect themselves they lash out as they have done in recent times, with the sinking of the ship and the shelling but that they miscal chrais collate. each of these times they've done a very quick strike and pulled back and counted on the pressure in south korea being against really striking back. and over the history of the west conflicts with north korea since the end of the korean war, all countries have restrained themselves from striking back against north korean provocation. if they miscalculated and if this new more assertive policy by the new south korean defense minister and the new south korean government takes hold, then it's possible there could be a retaliation and escalation. and that's what has so many in washington and in asia worried. >> i think they're the worst-case nerios. david articulated them very well. and they're also the likely scenarios that are down side over the next month because this clearly... the reason we're talking about this is because this is just continuing to escalate and has been. now, it seems to me that the red lines... one of the things we expect... david and i, i think, fully expect further provocations from this north korean government. the response you just got from south korea, china, the united states taken together is not going to stop the north koreans from doing more. there are two escalations that would create red lines in my view stepped over there would be a serious response. number one is a direct attack, artillery attack or otherwise on peninsula south korea, not the island. the second would be going after an american base somewhere in the region, an american ship and all the rest. either of those would lead to in my view direct strikes on the north. and that's where you can seriously miscalculate. that's where you can end up with conflict that will first of all drive the markets in south korea down like crazy, it's an important economy, lead to a great deal of panic and also drive a massive wedge between the united states and china. in greater asia and that, of course, has big implications as well. >> rose: bill richardson's trip. what is it about? what did he sflish >> he was timing a trip back. his governor's tenure, i think, ends at the end of this month but he wanted to time a trip back at a time of maximum tension and he certainly timed it well. i thought it was interesting, though, that they did not let him so kim jong il or kim jong-un. he ended up meeting sort of the top tier of the foreign ministry and the military but did not see the nation's leaders. and when president carder went to visit just a few months ago kim jong-ill was out of town. he was in china. so he also didn't see the leadership. and i thought that was striking because if the north koreans wanted to send a message back to president obama i would have thought that they would have had governor richardson meet kim jong il. so whatever message was sent was sent at a lower level. in the end i suspect governor richardson probably accomplished something significant by bringing the inspectors back in if they actually get back in. how long-lasting it is is the big question and i think ian is exactly right when he says, you know, we can expect there's going to be another strike at a time and place at the north koreans choosing. >> we probably is a bit of a recipes here. look, lord knows i don't want to be on record as saying i know what the north koreans are going to do. having said that... >> (laughs) >> given the fact that the chinese have pushed them very hard privately as opposed to publicly and they did not respond to the shelling, you have hu jintao coming to the united states in january. i have to believe that the north koreans are not going to take any unilaterally escalatory step right before the trip of hu jintao's state visit to washington. so i think the next few weeks things should be quieter. >> rose: does the u.s. have any options that are not simply coordination with the chinese? >> well, sure. the united states has the ability to really ramp up direct military pressure with the south koreans and show that deterrence is in serious... >> rose: and is prepared to do that, you think? >> well, they're showing some of that, certainly. though it was very interesting in terms of the american role in the military exercises that the south koreans just had in the past 24 hours, the americans were not up front. they were sort of, you know, in the background. they weren't trying to do anything that would lead the north koreans to hit an american ship, god forbid. so i think the americans are... they certainly need to show the sanctity of the u.s./south korean alliance. they're going to show that they are going to be there militarily for the south koreans going forward. they've sent more military materiel in the region. they'll be engaged in more exercises with the south koreans but the united states does not want to lend its chips to provocation. >> just on that point. i thought it was interesting if you compared the obama administration's decision to keep a very low profile in recent days to say bill clinton's effort to begin to reinforce during the... on the peninsula during the 1994 nuclear crisis or even president obama's decision to send bombers to guam during a crisis in 2003, the obama administration is trying to play it very cool and i think trying not to give the north koreans an excuse by putting american forces up front. >> rose: thank you, david, pleasure to have you on. >> thank you, charlie, great to be back. >> rose: back in a moment. congresswoman carolyn maloney. stay with us. >> rose: in 2006, new york police officer james zadroga died of respiratory disease contributed to his work at ground zero. federal legislation to provide health to first responders, known as the zadroga 9/11 compensation bill failed to pass. in september, the house cleared a $7.4 billion aid package but earlier this month the republican filibuster held up the bill's passage in the senate. the senate is expected to vote this week on a new version of the bill that brings the cost down. at city hall today, new york's mayor bloomberg spoke about the importance of passing the bill. >> this is not a vote on whether we should increase the deficit. it's a vote on whether we should stand by those who stood by america in its hour of greatest need. >> rose: last week, jon stewart of "the daily show" dedicated his final episode of the year to the legislation. >> there was one network that gave the 9/11 responders story the full 22 minutes of intense coverage that it deserved. but that network, unfortunately, was al jazeera. (laughter) our networks were scooped with a sympathetic zadroga bill story by the same network that osama bin laden sends his mix tapes to! (laughter) this is insane! (applause) >> rose: joining me now is congresswoman carolyn maloney. she is one of the original sponsors of the zadroga 9/11 bill. i'm pleased to have her back at this table to tell us where it is. so welcome. >> delighted to be here. thank you. >> rose: this is your bill. >> yes. it is. along with jerry nadler and peter king. we've been working on it for seven long years. we finally passed it in the house of representatives with the democratic leadership. it's now in the senate and if it does not pass before christmas, we'll come back into a congress that is republican-led and the leadership has been opposed to it. >> rose: why is the leadership of the house-- republican leadership-- opposed. >> it's patriotic, it's the right thing to do, it takes care of the heroes that took care of us. god forbid that we have another attack, charlie. are people going to say "i'm not going tow go and protect because i'm not going to be taken care of"? it's public policy, humanity, the right thing to do. i can't speak for them. this bill should have been passed seven years ago. >> what's the explanation they give? >> two answers are well, it's for new york, it's for new york. but, charlie, you and i know that the towers are our financial district and was attacked not as new york but as a symbol of our economic strength, the same as they attacked the pentagon as a symbol of our strength of our military. and on 9/11 we completely changed governments. we've completely changed our intelligence system. we're in two wars because of 9/11. we have changed all kinds of ways that we review people going on planes and cargo. we've completely changed our government bauds of 9/11 yet the men and women who were the heroes and heroines, i would say the first veterans of the war against terrorism we have not taken care of their health benefits, their compensation. shortly after pearl harbor, when we were attacked within a year, we took care of the veterans, the personnel that came in and helped. we should do the same for the heroes and heroines of 9/11. and i must tell you, charlie, it's the republican leadership that talks all the time about patriotic duty and 9/11. well, they should take care of those who took care of us. >> rose: so you are saying we've got to get it done before this congress is over. >> absolutely. and i should clarify many republicans are for it. our mayor has come out for it. former mayor giuliani, pataki, former mayor governor is coming out. peter king has been an ally. >> rose: all new yorkers. >> all new yorkers. >> rose: there is this with respect to the senate, this development that senator schumer has been able to with his... your colleague reduce the cost so that it will make it more what for the senate >> well, the first bill, the one that we authored was $7.4 bill. it has now fallen to $6.2 billion. but a lot of that is because of the court case that was settled earlier, the world trade center court case. and that money that will be paid out because of that court case has lowered the cost of this particular bill. the main way it changed is the pay-for. the democrats paid for it by closing a tax loophole. the republicans did not like that pay-for. senator gillibrand and senator schumer have come back with a different pay-for, one that increases the fees for h. 1-b visas in a clever way of increasing fees for government contracts that foreign countries who get our government contracts if they want to allow our businesses to do business there then they must pay this fee. so it that has purpose of raising the revenue for 9/11 but also opening trade and opportunities for american business. so the pay-for has been changed. >> rose: how many republican votes are there in the senate to be had for this bill? >> i'm told by senators gillibrand and schumer that they have roughly five republican votes. that's enough to pass it. >> rose: but not enough to block a filibuster. >> but it's not... it's not... we have the votes now but we're running out of time. >> rose: ah. >> if they get to christmas eve and they've done all of the other work, the continuing resolution, the budget, the tax bill, the start treaty, then they'll say, well, we've done our work and they'll start leaving. and then the senate can pass a bill, but we don't... we won't be in the house to respond to it. so it's a problem. >> rose: okay. so what has to happen now to make it happen and come out the way you would like for it to come out? >> well, we have been urging leader reid and the president, certainly speaker pelosi support putting the 9/11 bill in before we go to these continuing resolution to move it quickly through cloture so that the time that is required to debate it will still be there. they could send it back in time. or secondly we could pass the same pay-for as the senate and get it over there. but the main thing, charlie, as you know, where there's a will there's a way. and we need the political will and the republican leadership to come to the table with the democratic leadership and just get this done. >> rose: and how much... what role does the president play? >> well, the president is abimportant leader. i worked with him on the credit card bill of rights and when he started beating that drum and calling for passage it just sped through. and we're at the ninth inning and we need a good closer. there's no better closer than the president of the united states, president obama. >> rose: where do you stand on that? getting him to raise the priority for him in terms of what it is that he insists on doing before this congress goes home? >> well, we're working on all levels. we are... all cylinders are working. the new york delegation has made this a top priority and we're highly focused on it and all i can say, charlie, is i am so worried. because if we don't get it passed before christmas, i feel that our nine years of work for our heroes and hypos, it will be impossible to pass it in the next congress. so i feel really an intensity and a great purpose, a great commitment and it's now or never. therefore, you're talking about it on this show tonight and mr. stewart highlighting it and others around the country has been so important to build the momentum and support nationally for this bill. because it is a national priority. it's a national... homeland security is a national issue, not just new york issue. >> rose: tell us who james zadroga is... was. >> well, when we started working on this bill there was a lot of resistance to it and many people said that people were not getting sick because of 9/11. you know and i know that we lost almost 3,000 men and women on 9/11. but since 9/11, thousands and thousands more have lost their health and in some cases their life due to health conditions that arose out of the toxic fumes, the burning jet fuel, the pulverized glass and cement that our government said "oh, it's safe, go back. it's safe." people went back to work there and now many of them are sick and dying. and if it had... if this vote took place the week of 9/11, there's not a doubt in my mind that every senator would vote for it. i've never seen this country more united and determined as we were after 9/11. but as the years have gone by, the political will is not there on the part of some. yet... i've got to tell you, commissioner kelly was at our press conference this morning. >> rose: right. >> and he said we've been... there have been 11 other attempts to attack new york since 9/11. and they've all been stopped. but god forbid, charlie, that we have another one. are our contractors, our cleanup crew, our safety workers, our police, our fire, going to run into those blazing buildings to save the lives of others if they know they're not going to be taken care of? it's the humane thing to do. it's also good public policy. >> rose: some would ask why wasn't this with the democratic house and a democratic senate done earlier after he won the majority of the house in 2006. >> well, we tried to get it through in 2006 but in this congress, we had the financial crisis, as you know, and that took all the oxygen out of the room. and then we had health care. >> rose: and then financial regulation. >> then financial regulation on which i was part of the conversation committee. it was a top priority. and congress was very much focused on major, major legislation. the whole financial regulation, the whole efforts to build jobs and pull us out of this recession which the economic shocks have been three times greater than the great depression. so we went through a tremendous economic turmoil that the congress was the number one focus, jobs, the economy, stability. then we did pass it. we passed it in september of this year and the senate is now waiting until the last moment to take it up and we must get it through the senate. >> rose: who was james zadroga. he was a new york police officer. he died in 2006 of a respiratory disease attributed to his rescue work. his death was the first to be attributed to toxic chemicals at the site. >> and, charlie, the reason we named it after him was that government was insisting that he did not die because of health-related items. but he was coughing up black phlegm, he had i don't know if a large detective to a shell of a person and he had a symptom of the 9/11 health crisis where your lungs are coated with a coat so that you literally cannot breathe. so there's no question in my mind. it was a doctor in new jersey that said it was 9/11-related and we never backed off of naming it for him. his father has been at every event we've had. he had lobbied the halls of congress and really been a spiritual force and you really should get him on the program to talk about his son and the long journey he and other victims have been through in the fight to pass this bill. >> rose: the bill is the james zadroga 9/11 health and compensation act. how long the for coming. >> well thank you for having me and thank you for listening to our concerns. >> rose: pleasure. >> and being a part of passing this bill-- hopefully. >> rose: josh tie rang is here. he recaps the major news and trends of 2010. it does so by dividing the year into sex sections-- normal, jobs spills, stuck, currency, and gaga. i am pleased to have josh tyrangiel on this program for the first time and in the interest of full disclosure, i do a column for this magazine since he took it over and... so he may be my boss-- in fact, he is my boss. so tell me what an editor does when he wants to sum up the year? how do you approach? >> it depends on the year i think is the most important distinction. there's some years where there's a narrative and it doesn't take a genius to spot it and put in the context. then there are years like 2010 where things are all over the map. as we s.a.t. down kind of in october and talked through what we would want to say, we discovered that there were two very divergent camps. there's one in which things did not go very well for business this year. >> rose: (laughs) yes >> and there's one in which things went kind of spectacularly. what the job then became is to try and interweave them. a lot is... look, we're in the business of getting our facts right and showing people things, data visualization, putting charts together but we need to do softer stuff and why people thought the year was so bad and what metrix showed that it was quite good. so that was the starting point. you can do a very linear approach and we decided let's go theme atic. let's see how we can reduce these things to their connections. so the new normal was a phrase that took hold this year and we wanted to explain normal in a variety of different fashions. one is the new normal and the sense of lowered expectations that people seem to have about the economy going forward. another is what's become normal. things like exotic temperatures during the summer, incredible heat, extremes. normal, illinois is a town near chicago and we wanted to explore what sort of phenomena happened in normal, illinois. so we're trying to juxtapose a bunch of things and through that process tease out the them themes of the year and we reduced it to the six words. >> rose: are these the themes that would go forward into the new year? >> i think some will stick around. one of the things that we noticed is that because we're in a mediacentric world, a media constant world, themes don't go away as quickly as they used to. you used to notice something and it would not get sustained and sustain bid cable news or news print. here themes stick around. i seem to think that really 2010 is still living off the fumes of 2008. that we are still recovering a lot from what happened september 15, lehman brothers goes under and we're still trying to deal with the reality as it is. and part of that, you know, the year has this kind of seasonal affective disorder that we see we did a bloomberg poll and we asked people what was going on after the country? and two-thirds of people-- two-thirds of likely voters said taxes had gone up, the economy was shrinking and that tarp was going to lose billions and billions of dollars. and... >> rose: all wrong. >> all wrong. not only all wrong in some cases spectacularly wrong. so since the obama administration and dmong the end of 2008 beginning of 2009 taxes have gone down by more than $200 billion. the u.s. economy grew in 2010 sustained growth, as did most major western economies. tarp is on target to make $16 billion in profit. it's not just u.s., though. you asked ask global investors about the euro zone and 77% think that the monetary union is going to break up. despite the one trillion dollar backing and in fact ireland and greece may not be under the best of condition but they are recovering without default. so we try to get it as why do people feel this way. >> rose: and the reason is? >> two, houses and jobs. you look at broader macroeconomic terms that are global. you can hear good news. but if you wake up in the morning and not sure how much your house is worth and then you go to work and realize that 17% of the population are either unemployed or making due on part-time labor, that sense of security, the sense of control people used to have is gone. and you used to look at the government and they they've got my back and i think this is the year when we learned that government doesn't have control of oil spills, doesn't have control over its own information yet is able to regulate finance, health care. it's difficult for people to get a handle on how the affects their lives. >> rose: the future is elusive. >> and i think control is a pretty important word. that when your house is not only under control and the prices is... look, the october housing number for 202,000 homes on the market. last time we had that few homes on the market was june, 1968. so it ain't a great housing market. the jobs number at 18% un'm ploipt plid or part time people don't have the sense of certainty and don't have the control we used to have. now the way we try to spin this in a more positive light-- and i don't think we're spinning it, i think we're showing people what's going on-- is that the right to control your destiny has not been resended from americans, it's just been granded to many more people around the world. so the entire u.s. economy in 2010 added about 937,000 jobs. fox conn, which makes the ipad, the iphone, just about every electronic device you wanted in 2010, fox conn added 300,000 jobs in 2010. one company, one taiwan-based company. and you're seeing spreading opportunities around the world. now it's a testimony to the american system, it's a testament to capitalism but it's a new gain and emerging markets are competitive and not rising. they are competitive, and i think challenge for 2007 and the rest of the century is what is the american system going to do to compensate. the levels of control we are used to are changing. do we have leadership in government and corporate that can say to people okay, new risk new chances, new opportunities or are people going to get what come play tent? are their expectations so set they're not willing to change? >> it's about leadership? >> it is. >> rose: if that's the test. whether you can call on the best instincts within people so they don't become complex and so they don't say well, it's beyond my control therefore i'll take whatever i can get. and my guest is beginning of of the state of the union, that where's the president will be. he's going to try to define how america can get its mojo back. >> i think americans need a story and the president was so good at making himself an aspect of that story. >> rose: his narrative was the american narrative? >> and these are complicated things to tell stories about. no question it's not easy to explain why the economy is working the way it's working. you need to get people behind the message. when you look at the midterms there are a lot of people who would say people weren't paying enough attention. that's not true and people worked pretty hard. to the 80% of folks who don't get an opportunity to pay attention to the business pages and the politics pages in the way that you and i do, you have to engage them. you have to tell them what's expected, what we're going to do going forward to come neat this brand-new world, make it less scary. >> rose: where did you come there from? >> i started at "time" magazine, i was hired in 1999 by walter isaacson. i was hired into a different kind of journalism world. i take credit for them making $100 million. no, i was a junior reporter. >> rose: walter always said that. >> i appreciate that. i grew up in a system where you freelanced around the magazine. >> rose: started in music? >> no, a general assignment reporter. i became a music critic and i was a european correspondent for a while and ran the web site. what was great about time and its big turn-of--the-century prime was you could do anything. provide owed showed up for work and wrote clean you could freelance within the magazine and for a generalist it's a great experience. i think i almost came in a moment in media when people still read out of obligation. "time" magazine has a brand meant something. to have the thyme stamp on a story meant it's different, you have to read it. as we spent the last decade and as my career advanced and the world of media changed, people don't read out of obligation anymore. so when i got job at bloomberg business week, i emphasized we've got to fight for our space effort. everyday off to convince people why your story is the best. these are great jobs. that's what animates me is i have a great, great job. i talk to smart people about things that matter. but we have to be defensive of our position. we have to make sure people understand why it's important but we've also got to give them what they want. and that's very different from ten, 11 years ago where you sat down, you figured out what the story was, you wrote the story the way you wanted to do it and people bought it. there's many more avenues and the attention economy is so much more crowded we've had to clang that. >> rose: what is it you think the audience wants? >> you need to be indispensable in some way and that's not a particularly trenched... >> rose: indispensable and relevant. >> i think they go hand in hand but for us indispenseability is the hallmark of the product. you can't just be another thing people might read. so when we approached the magazine from the bloomberg point of view and from our redesign and repack jing was how do we make this the one read so comprehensive if that if it's the only thing you need, you'll be prepared for the week ahead. and how do you seduce people... >> rose: stay with the first part then we'll get to the seduction. how do you prepare people for what's coming ahead. meaning telling them these are the events and these are the people shaping the world that you exist in and these decisions that they're faced with. >> look, the most important thing we do is story selection. because a story today may not last in the next week. so you have to look ahead. you have to know what the bigger themes of the year are. clearly when we talked about what we were doing in 2010 a lot was about china, a lot was about financial regulation and we knew those things would be consistent. and we wanted to sketch out an arch that we could follow throughout the year that would work regardless of the news. we want to time our things correctly but you want to stay on things and so that's part of preparing people to compete in the week ahead. then you want to surprise people. >> rose: seduce is the word you use. >> i think you want people to have a muscle memory for a weekly product where they know where things are. the things they love they can find instinctively then they turn the page and go what's that? >> rose: and you want to surprise them >> every week. got to have something that surprises people otherwise the magazine becomes a utility. and there's a difference between being insis penceable. >> rose: but there's a bit of utility in it. you're telling them where hot good things are. you're telling them these are things that people are taking notice of. that that's a certain utility they can expect. if it's a hot product or idea, if it's a hot... >> we don't want to be con ed. we don't want to be there, you turn the lights on. >> rose: (laughs) there you go. >> but as far as utility goes we want to make sure people understand what's going on in the world and the goal that we keep in our heads is how do we make people smarter while saving them time? that's a magic recipe. >> rose: but is the internet going to be like con said? >> you mean in the sense you turn it on and it there's? >> rose: yes. >> well, there is a lack of romance in the internet. in the late '90s people thought oh, my god, this medium could be all-powerful. and like every game people figured out how to score and win. so you've got your clickable page use, your galleries, and things start to look very similar. and it is not the romantic dynamic medium that it once was. i've worked in both and right now i find there's more inventive stuff going nonprint than the web. that will change. >> rose: make the case that more interesting stuff is going on in print than the web. >> well, there's so much competition on the web, it's so ferocious it becomes noise. when you look at this issue it's a very... i will concede, a very non-traditional approach to a year in review. we cleared the decks and said how do we tell the themes not just in themes but info grafxs. >> and i assume opportunity experience of reading it to be part of the story. >> absolutely. you read sequentially by and large in print so that gives you an opportunity... off more focus reader and it may not be the same four million readers we had a few years ago, although we still have pretty much close to that but you have a focused and... a reader who's with you. they've made a choice when they open out your pages to shut out the rest of the economy. on the web you get, i don't know 30 seconds, two minutes. and that battle for their attention drives people to do things that are not conducive to a pleasant experience. >> rose: mike allen was hostile to the idea of blogging or the idea of the internet and you had to convince him. and you had to convince a lot of people that this is the reality that they had to... they had to unburden themselves of the resistance and go with it otherwise you would never appreciate it. >> yeah. and i think that you've got to embrace each medium for what it is. and the web is... just to be fair to mike, mike was blogging but mike... the machine that mike is now where, for people who don't know, he sends out an e-mail with about 3,000 words at 6:00 in the morning. mike has developed into that very much on his own. >> rose: and it's the first read at the white house, the congress the pentagon. >> the first thing anybody who cares about politics looks at. >> rose: just gives you a quick aggregate of everything. >> yeah. i think what we were trying to encourage and what still matters the most is to understand why people like a medium. why do they like it? people like the web because you're grazing. between 11:00 and 2:00 when you're at your desk-- which is web prime-- people don't have a lot of time. so if you can inform them quickly, show them something interesting and get out, that matters and if we want to matter to those people we have to play by the rules of that medium. but you can't just take a magazine story... some of these stories are 3,000, 4,000 words. you and i both know when you're reading into that paragraph the signals a writer sends that you should lay back, it's going to be a while. well if you read one of those throat-clearing paragraphs when you're at your desk, the message from the provider is "we don't care about you." >> rose: right. >> so we've tried to encourage journalists to bear in mind who you're writing for where they are when they're reading you and what you want to say. by and we're in an era where most journalists understand now the difference between web and print. >> rose: i think i've expressed to you before this thought, i can never find the page numbers in this magazine. it drives me nut. where are the page numbers? >> charlie, look under your thumb. >> rose: there it is. >> also, we don't put page numbers on your page. >> rose: (laughs) >> just to see... >> rose: thank you. just to make it difficult for them to get there. >> exactly. a challenge. it's a reward when you get to the charlie rose page. >> i was looking here. that shows you can never think traditional. i'm looking here or here or here. that's not where it is. >> we did it because most people browse and look at this level but we have had a few complaints >> rose: what are the stills that a great editor brings to a project. let's assume you're that with this product. what is it? it's not what you know about business because i don't think that would have gotten you there. >> i think clearly it wouldn't have. it's tough because i don't have a whole lot of management experience. i'm a journalist. i tend to rely on people's expertise i think the only thing that i spring a sense of amazement. i find... a sense of story. >> rose: i know, is it something other than... it's just amazement? >> yeah, i like to be amazed. i like that when people are enthusiastic about the world we live in and don't cover things out of obligation because, well, we have to do it just as an example about story selection, we were talking about haiti and the haiti earthquake happens and people said we have to do a story. i said well, there are a lot of people on this story. what is our ang? what does bloomberg business week do? i think where i might have some talent is in understanding what our place in the market is and what our readers want from us. and our readers care about business a lot so within that space they give us a lot of liberty. if we're going to go outside of it, we better have a damn good reason to do it. i think some is about discipline and understanding the market and some is i get along very well with journalists. journalist are notoriously obstreperous and difficult to deal with. and i might having a little bit of that as well. >> rose: when you left "time" magazine, they said about you "he's the next "time" magazine editor." how do you make a decision like that? >> there have been a lot of people who have been told "you can be the next editor of "time" magazine." generally that's a good time to short share the stock. >> rose: (laughs) >> i heard the and it's incredibly flattering at the same time i think a little bit like n.f.l. head coaching job. there are only so many editorships of weekly magazines. >> >> when you get a chance to manage, manage. >> sometimes you go to buffalo and sometimes you go to san diego and sometimes you go to dallas and i feel like i ended up in dallas. so you take the opportunity where it is. we're blessed with a loot of great resources and a space i think people are hungry for us to fill. >> rose: and an opportunity to be global. >> yeah. we've got 2,000 reporters willing to contribute to the magazine every week which is a blessing. >> the place you just left put on its cover mark zuckerberg. facebook, "social network" the movie. i'm looking, i can't find mark zuckerberg. was he no part of your career in review when this guy had one of the most successful... >> rose: >> obviously if you look in the top right corner. >> rose: barack obama. >> no, look at the picture. >> rose: ah! there he is! there he is! >> rose: but we did put mark zuckerberg on the cover. i don't know why we haven't gotten nearly as much press. zuckerberg is a completely defensible choice and when you start as the editor of thyme you have to think how do i make sure it's not a disaster. >> rose: right. >> i think zuckerberg is a smart choice for the year. having a social network of more than 500 million speak an incredible story. and facebook itself is interesting as a company because it's done... we talked about control. and the american consumer and the american sort of psyche about control. well, facebook takes this infinite medium and chops it up into cul-de-sacs. so google started the decade taking us out into infinity and i think a lot of people loved it and decided well, infinity is tough to wrestle with. facebook just shrinks it back down to a sense of control and that's why people like it. >> is it the model for the future? is it, in fact, sort of the network of friends or the network of people who have common purpose, whether it's twitter or facebook? is that more important, say, than... >> rose: i think grouping things by behavior is going to be a huge technological market going forward so if you have social connections, if advertisers know a ton more about you, i think facebook's future, if anything, is being underwritten. it has a tremendous amount of financial future ahead of it. and google ought to be a little bit worried about it because if people aren't out there browsing on searchable pages, google's model has some troubles. if people stay within this cul-de-sac of facebook and their behavior is tracked and facebook can solve its privacy problems and make sure its users are made comfortable they have a tremendous advantage when it comes to advertising. >> rose: bloomberg business week year in review. >> it's a crypto gram, this cover. we wanted to make it something to explore. >> rose: steve jobs, ben bernanke, lady gaga, unobtain yum. >> and you noticed... >> and i love gold, euro and bacon. >> all currencies as well. then minors in a quiet tribute. >> and here's wikileaks right here in the middle. what do you think of sfwhaex >> i'm in the minority here but i find wikileaks has exposed an incredibly expressive side of the american government which is we have a lot of people out there doing smart analysis of foreign events and leaders. i don't think anyone following the news has been shocked by it. i've been pretty impressed >> it is a side of it that other people have written about. everything is most about that embarrassment, who's embarrassed because they showed some leader said this or that. but on the other hand, there's all this stuff where you find diplomats and people doing the government's business reaching for the right thing to do. how do we push this human rights question? how do we do this? >> and sometime and again i think robert gates put it best when he said people don't deal with the american government because we're diplomatic. they deal with us out of self-interest. so the exposure of our private conversations he doesn't think will harm us long term. i'd be surpriseed if it harms us long term. there are plenty of things it would be better not to have had out there but i have tremendous admiration for the people doing the work of writing those cables. they're very smart and engaged. i've been a bit surprised by the shock surrounding it. >> we don't know the consequences of whether people lost their lives or something happened and i suspect made it a bit more difficult for people in terms of... joe biden said on the weekend that when he goes for a meeting with the head of state they say "it will be just the two of us, no aide taking notes." >> it's an ice breaker, though, "you're not going to wikileak me, are you?" >> rose: (laughs) thanks. pleasure to have you on the program. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org