amazing images i have seen in the history of modern royalty. ♪ >> a choir on the deck in the pouring rain, one of the great choirs. >> one of the great orchestras singing "royal britannia." let's listen to this. ♪ [ horning horns honking ] you are watching live pictures of the culmination of a remarkable 90 minutes, the queen's diamond jubilee here in london t is pouring with rain it has been horrendously cold, but nothing has dampened the spirits of the occasion. it has really been something incredibly special and you see her majesty, the queen there a fitting image with a large umbrella, leaving the royal barge, followed by her long-supportive husband, prince philip, other senior members of the royal family. they have had an incredible afternoon, pretty well incident-free and i think everyone has had a cracking time and there will be people all over the world watching this thinking you brits are completely mad. and you know what, we are. so, we are proud of it and we are particularly proud of our wonderful queen. your majesty, thank you for 60 great years, you have been a remarkable inspiration, i think to all of us and to everyone around the world, as part of your commonwealth and part of the empire. we are very proud to have you as our queen. and we have been very proud, i think all of us here, dickey, vassi, richard, to see -- to see our royals at their very best on this remarkable day. richard? >> nobody does it quite like the british and if there was ever any proof needed in these conditions, right the way down to the umbrella her majesty is using, it is the famous umbrella so that the public can still see her, the domed umbrella. >> and you got to hand it to the duchess of came bridge, even a matching glamorous red umbrella. >> absolutely. actually, i don't know if you know that the queen's um brel lark the rim, matches the color of her outfit. >> dickey arbiter, sum up the day for me. >> a unique experience, a grand experience, one that only the brits can do, some were rain or shane and it rain and it was cold, you summed it up very well, your majesty, we salute you. >> we thank you. come rain or shine, it rained but it showned. thank you all very much. it has been a really specs day. i feel very proud, very honored to have been part of the cnn team today. i hope you have enjoyed it around the world. the rain didn't have a moment answers effect on any of us, to these hearty soul behind us in their rain-soaked cagools, people prepared to come out in these conditions and say thank you to her majesty, queen elizabeth ii, her diamond joubly you congratulations, ma'am, long may you rain. we will leave you with -- we will leave you on behalf of me and brook balanced bdwin and th with the london philharmonic orchestra, the band, the choir, the orchestra, they have played on. ♪ this is "gps, the global public square." welcome to all of you in the united states and around the world. i'm fareed zakaria. we have a great show for you today. we'll start with mitt romney's plans for the american economy. i have an exclusive interview with his senior economic advisor, glen hubbard. then, syria. what's next after that massacre of civilians, almost 50 children killed? i will ask farwas gergis, the noted expert. up next, the harvard business school's michael porter. he is the most cited on author on business and economics in the world. he has a new study to talk about. first, here's my take. kofi annan's mission in syria, which appears to hope that syria's president assad will negotiate his own departure, seems utterly doomed. instead, america, the western world, indeed, the civilized world should attempt to dislodge the assad regime. but is there a smart way to do it? for a number of reasons, military intervention is unlikely to work well in syria. unlike in, say, libya, syria is not a vast country with huge tracts of land where rebels can retreat, hide, and be resupplied. syria is roughly one-tenth the size of libya, but with three times as many people. perhaps for this reason, the syrian rebels have not been able to take control of any significant part of that country. the geopolitics of military intervention are also unattractive. in egypt, and even in libya, all major regional powers, world powers, were on the side of dislodging the regime or at least passively accepting that it would happen. in syria that's not the case. iran and russia have both maintained strong ties to the assad regime, so were the western powers to intervene, it would quickly become a proxy struggle with great power-funded militias on both sides. that would result in a long, protracted civil war with civilian casualties that would dwarf the current numbers. think of the lebanese civil war of the 1980s that lasted a decade, killed over 150,000 people and displaced over a million. the syrian regime has stayed intact. there have been no major defections from the army, intelligence service, or business community. why? well, the regime is alawite, the shiite sect that represents about 10% of syrians, and the key military and intelligence posts belong to alawites. they stick with the regime because they know that in a post-assad syria they would likely be massacred. but assad has also been able to stop defections from the sunni and christian members of the ruling elite. presumably with a mix of threats and bribes. now, that's where the regime might be vulnerable. syria is not an oil state. the regime does not have unlimited resources with which to buy off elites. so we're truly crippling sanctions to be put in place, including an embargo yes on energy, it is likely that the regime would begin to crack. that might mean a brokered exit for the assad family or a full-scale collapse of the regime, but it seems unlikely that the regime can persist without cash. it would be morally far more satisfying to do something dramatic that would topple the assad regime tomorrow. but starving the regime might prove the more effective strategy. for more on this, you can read my column in this week's "time" magazine and on time.com. let's get started. my guest, glenn hubbard, is the senior economic advisor to governor romney. in that role, he is the chief architect of governor romney's economic plan that will convince you either the governor is going to fix america's economic problems or not. he also has a day job. he is a dean of the columbia university business school. welcome. >> thank you. >> let's get right into it. governor romney has an ad in which he says the first thing he is going to do is a big tax cut. now, you have talked a lot about the debt and deficit. he has talked a lot about the debt and deficit. how can it possibly make sense, if you're worried about debt and deficit, that the first act you would have would be a massive tax cut, which will surely explode the deficit? >> well, not really the case, fareed. first of all, what governor romney said his first up is a spending reform that brings federal spending down to 20% of gdp by 2016. on the tax sid,e he is not proposing a net tax cut. he is proposing something that's in the flavor of the bowles-simpson commission, to cut marginal rates, broaden the tax base. yes, marginal rates would be cut, but it's revenue neutral. >> the ad then is misleading. i mean, the ad says first thing he will do on day one is cut taxes. >> he is cutting marginal tax rates. he is doing so in the context of a tax reform, the kind of tax reform that economists on both sides of the political aisle have talked about for years, but what's very important is he is doing that also in the context of a plan, day one, that would refrain federal spending so we get the deficit back in order. >> let's talk about the specifics because that's where it becomes -- is often hard to figure out how it works. to cut marginal rates, would you have to do it, as you say, the way simpson-bowles does it. they get rid of a lot of the deductions or so-called loopholes, but the big money is in the very popular deductions. >> what governor romney has said is, look, first of all, we need to cut marginal rates, and he would cut them essentially to exactly the same levels in the bowles-simpson so-called compromise plan. part of that revenue is made up in economic growth. most of that, though, has to come from base broadening, about which he said two things. one, everything should be on the table. there's nothing eliminated. put everything on the table. second, that the bulk of the adjustment be borne by upper-income households. remember, the bowles-simpson was trying to raise close to 2 percentage points of gdp in revenue. governor romney is trying to be revenue-neutral. his tax plan wouldn't have to raise as much revenue from base broadening as bowles-simpson. >> but i want to press you on this, because even if you're not trying to raise as much, it's very tough to get any significant revenue if you don't touch the big deductions. the big deductions are the interest on mortgages, the interest on -- the health care and federal and state taxes. i am sorry, local and state taxes. those three collectively -- >> those are the big ones. >> is he willing to look at those? >> he has said so. he has said everything is on the table. he looks forward to working with the congress to do it. there are many ways to do it. we have dominici-rivlin, we have bowles-simpson and president bush's 2005 commission. there are lots of ways. everything has to be on the table, and again, the adjustment really has to focus on upper income households. >> when you look at the spending reduction, you said he is going to take spending down to 20% gdp. that is from about 23, 24. it's a very big drop. medical record to do that, what is he going to do specifically? what programs would get cut, particularly, again, the big money, that's medicare and to a lesser extent, medicaid, social security? what would he do to medicine conveyor? >> well, he has two parts to the spending plan. the first is the near term, the 2016. getting spending down to 20% is not as radical as it sounds. spending was 20% of gdp, or a bit less before the financial crisis, so this isn't some radical rethink of the size of government. how to do that would be cuts in discretionary spend and block granting the medicaid program. he has been very specific about that. medicare and social security are longer term issues. he specifically said those are not short-term budget issues. how would he do that? for medicare, he said that he would support a move towards more of a premium support system, which would limit medicare support, particularly for more affluent seniors. for social security, he has talked about delaying the retirement age and slowing the rate of growth of benefits for upper-income people. the same kind of progressive solution he is proposing on the tax side there needs to be adjustment but has to have them for upper income households. >> you have worked with governor romney a lot now. >> yes. >> how would you characterize his economic philosophy? is he a supply sider? is he a classic republican-kind of business type? is he sympathetic to the tea party? and don't tell me all of the above, because that's what people worry about about mitt romney. >> no, i think the way i would describe governor romney is he is a problem solver. and i think the issue for him is how do you raise economic growth in the country and how do you make it more inclusive? once you raise those questions, he is interested in practical solutions, not theoretical solutions. how practically can we do that? and if you look at what he is proposing on the budget, on taxes, on regulation, on financial reforms, there are with those two things in mind. i look at him as a practical problem solver that has elements of all of those that you suggested, but not literally all of the above. >> we'll talk more about glenn hubbard, mitt romney's chief economic advisor. we'll ask him about the fiscal cliff, about obamacare. more when we come back. 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[ male announcer ] stop the uh-oh fast with kaopectate. and we are back where glenn hubbard, senior economic advisor to governor romney. you've talked a lot, governor romney has, about the uncertainty, the climate of uncertainty that makes it difficult for businesses to invest. i can't imagine something that would be more uncertain than this issue of the debt ceiling. do you believe that john boehner and the house republicans should make it clear that the united states will not default on its debt? >> well, first, the united states is not going to default on its debt. we have a witching hour where the budget ceiling, sequestration and the live and tax rates are all occurring, and that will be part of a political negotiation. as an economist, i would think that if we get to a situation ere governor romney becomes the president, then the lame-duck congress ought to simply shift things down the road a few months to the enactment of governor romney's tax plan. if the president wins re-election, that's a different negotiation, but it should center quickly on the appropriate tax policy, but there's no question that the nation isn't going to default on its debt. >> but should we make that clear to prevent uncertainty? should john boehner make clear that the united states should not default? >> i can't give political advice to politicians. all i can say is the real economic issue here is both addressing the size of spending and then how you want to deal with the fiscal cliff. >> obama care, this is a subject you know a lot about. you wrote a book about fixing health care. when i look at the problem, it does seem as though if you have an insurance based system and you don't include everyone, you end up in a kind of negative spiral for insurance companies where they're trying to kick people off with preexisting conditions because they don't want to just have sick people on. that is the reason that governor romney of massachusetts decided you had to have a mandate. doesn't it make sense then to preserve the individual mandate in obama care because that's what makes an insurance system work, that have you healthy and unhealthy people in it? >> no, i don't think so, fareed. first of all, have you to start with what's the goal of the reform? i think from an economic perspective, the goal of health care reform is to slow the rate of growth of health care costs to make both health care and health insurance more affordable. that, in turn, increases coverage. you don't need an individual mandate to do that, but you do need to help markets work better, and you identified some of the problems. you really do have to go after preexisting conditions. you have to make sure that the chronically ill are taking care of it in a way that doesn't hurt the functioning of private insurance markets. you have to change insurance regulation and make it possible to buy cheaper policies. if you do those things and you fix the tax bias against many ways of purchasing health insurance and health care, you can go a very, very long way towards cost reductions. that's really what a market oriented health care reform is about, and you don't need the individual mandate to do any of that. >> was governor romney wrong to do it in massachusetts, because the philosophy behind it is exactly the philosophy behind obama care. >> no. what governor romney was doing in massachusetts was taking a particular set of state circumstances and a -- >> which is the same that you don't have -- the young healthy weren't buying insurance, and that was a kind of screwing up the insurance system. >> what he has said is that individual states may do all kinds of experimentations. that doesn't follow from that that a national mandate -- >> it only makes sense logically if you say that the massachusetts example then was a failure. was the massachusetts -- was romney care a failure? if it's a success the federal government should adopt it? >> i don't think you can say that. it goes back to the question that you are trying to answer is the goal lowering health care costs? is it increasing the number of insured individuals? i think all of those things that are in the mix. i don't think you can draw the link between massachusetts and the national system. i think what's on offer for the american people to decide is effectively obama care that would double down on all the flaws that i mentioned, all the flawed insurance markets, all the flawed tax system, or a more market-oriented health care system. that's really what's on offer. >> what is the central focus of the romney economic plan? how would you describe it very briefly? >> i would say it's really single-mindedly focused on two things and an important byproduct. the two things are how do we get economic growth back to what this country is capable of, and, second, how do we make that growth inclusive so that all americans see the benefits of it? the key byproduct of that will be job creation. when people see that america is a country in which you should want to invest, whether you are an american saver and investor or a foreign saver and investor. it's really that simple. >> i had paul krugman, the economist, on recently, and i asked him what he thought of governor romney's plan. and he said governor romney's plan, as i understand it, is we need to cut government spending substantially to restore confidence in the markets. what he should look at is the experience of europe, where they have cut government spending. as a result, they are in a tailspin. the budget deficits are widening. the debt is growing because by cutting spending, you are, in effect, reducing demand, destroying the economy in a weak economic climate. and that to him it's bizarre that given this evidence that europe provides, of countries from spain to britain, that they've cut spending, and it hasn't worked, why should you the united states? >> it is unfortunate, i think, in europe and to a lesser extent even in the united states tha