>> Prime Minister Howard: It's a pleasure to be with you Peter.

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1 >> Peter Robinson: Welcome to uncommon knowledge, I'm Peter Robinson. Active in the politics of his country for some five decades, John Winston Howard in 1996 became the 25th Prime Minister of Australia. Prime Minister Howard headed a coalition government made up of two parties, one, the Liberal Party which was and remains the biggest conservative party in Australia and was the Prime Minister's Party; the other, the second biggest center right party, the National Party. Mr. Howard led the coalition to a total of four electoral victories, remaining Prime Minister until Prime Minister Howard, thank you for joining us. >> Prime Minister Howard: It's a pleasure to be with you Peter. >> Peter Robinson: John Howard on the war in Iraq: "The invasion to disarm Iraq is right, is lawful, and is in Australia's national interest." You sent naval forces and some 2,000 troops to participate in the war in Iraq. Why was it in Australia's national interest? >> Prime Minister Howard: Well, it's always in Australia's national interest to work closely with the United States because ultimately the United States is our security guarantor. It was also in Australia's interest because disarming Iraq and getting rid of Saddam Hussein removed a potential facilitator of future terrorist activities. I mean I didn't believe that Iraq was involved in the attack on the 11th of September, but I did believe on her past track records such as giving 25,000 dollars to every Palestinian family that sent a suicide bomber in Israel. I did believe that Iraq might be involved in future terrorist activities and I think one of the things we forget about the days that followed the 11th of September is the mind preoccupation of the world, particularly American was when was the next attack coming and who might be involved in it. So I have never regretted that decision of sending naval units, troops and also a squadron of [inaudible]. Never regretted that decision and things are looking better in Iraq although there is still a long way to go and -- >> Peter Robinson: Let me back up just a moment though. You said it's always in Australia's interest to side with the United States because United States is the ultimate guarantor of your security. >> Prime Minister Howard: Hmm. >> Peter Robinson: Almost the same words could uttered by the Prime Minister of Belgium or the Prime Minister of the Netherlands. Australia has a population of about 21 million. The Netherlands has 16 or 18 million. These are countries of roughly the same size and roughly the same GDP. Why doesn't Australia just free-ride on the United States the way counties in Europe do? What makes Australia distinctive? >> Prime Minister Howard: Well, we don't believe in free-riding on anybody. That's not our character. And we don't always agree with America on issues. I mean for example I didn't agree with President Bush on the International Criminal Court. After a lot of

2 debate, we ended up signing up for that, yeah. The Bush administration had a different view. So we do have differences on issues but the history of our two countries is that we have fought together in every military conflict in which America has been involved in many consequences since World War 1. And we see the contribution America makes to world's stability as being important not only to the Atlantic and to Europe, but also to our part of the world and the more that America is involved in our part of the world and Southeast Asia the better and that's why it's always in our long term interest. It's not to blindly follow. You can even do that but I had a case in the concern about possible future involvement of Iraq in another terrorist activity, not a belief that she was involved in 11th of September. It was one of the reasons why we took that decision. >> Peter Robinson: Alright. Prime Minister Howard, in February 12, 2007, you were still Prime Minister: "If I were running Al Qaeda in Iraq, I would pray for a victory not only for Obama but for the democrats." >> Prime Minister Howard: I did say. >> Peter Robinson: Why? What were you thinking? >> Prime Minister Howard: Well, well, I sought the plan then being annunciated by candidate Obama which was different from what he implemented as president. >> Peter Robinson: As candidate, he said I wanna get out as fast as we can. >> Prime Minister Howard: Well, well, he was talking about getting out in >> Prime Minister Howard: Yeah, that would have been crazy and that's why I said what I did and we had a stuff and -- but that's alright. I mean-- >> Peter Robinson: And you view of President Obama's policy toward Iraq now? >> Prime Minister Howard: Well, I think what he said thus far, which is a lot less precipitant than what he said as a candidate, thus far what he said is much better in my view and that, you know, the proof the pudding will be in the eating. The speed of the American toward -- we all want them to get out. I mean nobody wants to and America has paid a very heavy price and I'm very conscious of the fact that more than 4,100 American -- 4,100 Americans died in Iraq, I'm very conscious of that and I'm sure that mothers and fathers and wives and whatever watching this would want their boys home as soon as possible. But having given so much, it would be a tragedy if the withdrawal would premature now. What in my respectful opinion the president is now saying is very encouraging, a lot more encouraging on Iraq than what he was saying as a candidate. >> Peter Robinson: Alright. Three leaders whose nations contributed the most to the invasion force: George W. Bush left office this past January as one of the most unpopular

3 presidents in American polling history; Prime Minister Tony Blair resigned under pressure in 2007; Prime Minister John Howard after four electoral victories, his party is defeated, his coalition is defeated at the polls in What does that say about the ability of Western democracies to prosecute a long, complicated, painful conflict such the War on Terror? >> Prime Minister Howard: Peter, in -- even myself, I don't see my position on Iraq made any big-- >> Peter Robinson: It wasn't. >> Prime Minister Howard: --contribution to my defeat in November In a parliamentary system -- in your system, you have term limits and everything is predetermined. >> Prime Minister Howard: In a parliamentary system everybody loses in the end [laughter]. I mean that's -- that is a nice-- >> Peter Robinson: You've had a run of 11 years. >> Prime Minister Howard: I mean I had a run far and extensive on what I expected and in the end you lose for a whole combination of reasons. I don't even reckon-- [ Simultaneous Talking ] >> Peter Robinson: So it wasn't decisive? >> Prime Minister Howard: No, no, no. It wasn't a decisive issue. In the case of Tony Blair, I think it played some part but once again he'd been there for a very long time and I'm not sure that the British Labor Party, enforcing him out, did the right thing but that'll be something that the British electoral will make the judgment on. And of course, George Bush had a fixed term and he could serve no more than eight years. Now, talk about his approval ratings, well there was some pretty low approval ratings. Margaret Thatcher for example had very low approval ratings and others have had very low approval ratings on the Harry Truman's Approval Ratings were very low towards the end of his term in office. >> Peter Robinson: So what we went through politically does not bear on the question of our ability, our ability meaning what democracies are [inaudible]. [ Simultaneous Talking ]

4 >> Prime Minister Howard: [Inaudible] I think it -- I think having said all of that, I think it -- the great problem that Western societies have is maintaining support for a military involvement that doesn't yield immediate success. >> Peter Robinson: Right, alright. >> Prime Minister Howard: I mean that is a fundamental problem and we saw it in Vietnam. We saw it in relation to Iraq and we may well see it in relation to Afghanistan. There's an appetite for immediate success which is understandable but the difficulties that our enemies denies it, that is the mood of our societies and they will ply on that and take advantage of that if they can. >> Peter Robinson: Segment 2: Australia without Apologies. Your fan Mark Steyn, the journalist, the great journalist Mark Steyn noted in an to me that you renamed the Australian Department of Immigration and Multicultural Affairs the Department of Immigration and Citizenship. >> Prime Minister Howard: Yes, I did. >> Peter Robinson: Why did you do that? >> Prime Minister Howard: Because I think the whole idea of Bureau of Immigration is to make citizens, not to build a federation of cultures within one nation. I mean my -- I think multiculturalism is a very confused credo. I believe very strongly in multiracialism. I mean I think we draw people as an Australian, as an American, as in the four corners of the earth, different races, different ethnicities, different religions. Once you're here or there, you would become one, and the old American nation of assimilation -- of the melting point rather-- >> Prime Minister Howard: --was right. But that's my view. >> Peter Robinson: Alright. Let me give you -- let me give you two views of Australia. One, whites suppressed the aboriginal population and established an outpost of European culture in the South Pacific where it has no proper place in the words of Australian anthropologist, W.E.H. Stanner through the history of Australia flows "a secret river of blood." Second view Australia, and now I'm quoting your fellow Australian the actor Russell Crowe: "God bless America. [Laughter] God save the Queen. God Defend New Zealand. And thank Christ for Australia." Chip off the old -- would I be correct in supposing that you're on Russell Crowe's side in that moment. [ Simultaneous Talking ] >> Prime Minister Howard: Absolutely. Rusty is dead right.

5 >> Peter Robinson: Why? Why? How do you refute this notion that Australia represents an outpost of Western culture in the South Pacific where it is not -- it simply doesn't fit? How do you refute that notion? >> Prime Minister Howard: Well, a culture in a set of values is not geographically specific and it is not -- Prime Minister Howard: There's no reason why Western civilization cannot be celebrated in any part of the world. I mean that's a ridiculous notion. And Australia is a projection of Western civilization and the enlightenment in all of those things that we associate with Western civilization. I used to say that Australia occupied a unique intersection of history and geography. We're a Western European nation. We're in the Asian Pacific region but we had very close and enduring links with North America, particularly the United States. Now there's really no other society in the world quite like that and I think in a sense here I talk part of Australia and New Zealand. Now to me, that confers great benefits and this whole idea that you count the Western civilization is just for Western Europe is crazy. I mean the contribution that America, for example, has made to the development of Western civilization is arguably greater than that of any other country and the idea that we can't make a contribution. When you look at the history of Australia, many of the things that we've done, for example women got to vote in Australia well in advance in full franchise since getting the vote in either the United Kingdom or the United States. So we've led our own contribution to the development of the genre. >> Peter Robinson: So you weren't even slightly -- I'm waiting for you to say something that sounds a little bit defensive or to grant the point of the politically correct -- you're not -- you don't -- [ Simultaneous Talking ] >> Prime Minister Howard: No, I know I find that -- I find that -- >> Peter Robinson: You won't put up with that even a little bit. >> Prime Minister Howard: No, no, no, I'm right. And I think this river of, you know, this whole idea is that -- to disgrace its path in some litany of shame is why I never ship yet. Of course the indigenous people were not well treated, of course. But equally, there were benefits of Western civilization that were brought to the country which are enormous and the way to deal with helping the indigenous people of Australia is to make them part of the mainstream of their community while it's always recognizing that they do occupy a special place in our history. They were the first Australians and they are entitled to preserve their identities such. But they can only ever be fulfilled if I can put it that way, by becoming part of the mainstream of our community part. >> Peter Robinson: Alright. Everyone of the countries for which Russell Crowe offered things to the Almighty was English speaking, which brings us to your friend and mine,

6 John O'Sullivan and the notion of the Anglosphere. Let me quote John: The Anglosphere is made up of "countries that share a political tradition of law and liberty and economic tradition of free-trade and capitalism and the English language of the United States, Britain, Canada, Australia, New Zealand, but also India and the West Indies. They tend to see the world in the same way and hence to migrate to each other's countries to invest in each other's economies and to fight in each other's wars." You'd grant all that? >> Prime Minister Howard: Yes, I do, hmm. >> Peter Robinson: The Anglosphere has a special place in world history and in world diplomacy and in world trade and in your heart as far as that goes. Alright. Now here's a simple statistic. 40 percent of Australia's exports go to Japan, South Korea and China, a proportion that's almost certain to rise as the Chinese economy continues to grow. Isn't it all but inevitable that Australia will find its interest more and more aligning with Asia and participating less and less in the Anglosphere? How does Australia remained distinctively Australian in the face of the rise of Asia? >> Prime Minister Howard: Well, because there's nothing incompatible and the values of the Anglosphere, if I can put it that way, are not repudiational. We don't say, well, because of who we are, we don't have anything to do with other countries and that would be absurd and the coincidence of trading opportunity doesn't, of course, end up dictating what your values are. I mean we have a very good trading relationship with China. We sell an enormous amount of resources to China, but that political system is oddly different and the success of our relationship with China when I was prime minister was built on the fact that we concentrated on the things that we had in common. If we had argued about the things that we disagreed about, I don't think our relationship would have been as good. >> Peter Robinson: Let's -- >> Prime Minister Howard: But China is a communist dictatorship. It has been and still is. I mean I personally think there will come a time when China will confront -- have to confront its demons in terms of the -- how do you reconcile liberal economic with political authoritarian is when eventually something we'll give and it might not be for several decades but eventually I think it would be. >> Peter Robinson: Segment three here is China. So let's just continue the conversation. You said that China represents a communist dictatorship. You reckon that the folks in Beijing who are running that country are still communists, that they still -- they still take Mao or Marxism-Leninism seriously or is it just at this point a kind of Chinese authoritarianism that their real credo is Chinese nationalism? You reckon their belief in communists? >> Prime Minister Howard: Well, I think -- I mean I associate communism with authoritarianism.

7 >> Peter Robinson: Alright. >> Prime Minister Howard: And I did China is an overwhelmingly authoritarian country. I mean it's, you know, there were some easing at the periphery and I accept all of that and I had a very good -- wonderful relationship with Jiang Zemin when he was president and also with his successor Hu Jintao and -- but the basis of that relationship was we agreed to disagree on those political things and then in fact there's still the things that we had in common. We [inaudible]-- [ Simultaneous Talking ] >> Peter Robinson: The basis of the relationship was business? >> Prime Minister Howard: Yeah. He was-- >> Peter Robinson: It was business like. >> Prime Minister Howard: Pragmatic. >> Prime Minister Howard: They're very pragmatic people of China and we do a lot of business with them and they like doing business with Australia because we're dependable, we deliver on time, we deliver precisely, and they're very happy. >> Peter Robinson: Quote. >> Prime Minister Howard: But we shouldn't be blind to the fact that it's still an authoritarian country. That's the point I'm really liking. >> Peter Robinson: But you would not -- here's what -- there's -- I got this quotation that you said sometime ago: "China's growth is not only good for China, it is also good for the whole world." >> Prime Minister Howard: Yes, I agree with -- I believe that. >> Peter Robinson: But you're saying it's an authoritarian regime. So I'm trying -- >> Prime Minister Howard: He's one of the [inaudible] who lived there. [ Simultaneous Talking] >> Peter Robinson: You live there, you work with these people, you knew the leaders. They're -- you'd -- what I'm trying -- what I'm probing for here is that you would distinguish them from the Soviet Union and that they're not expansionist. They don't have

8 designs on the region. They just want their own country to grow. What do they want? What do the Chinese want? >> Prime Minister Howard: Well, you distinguish them from the Soviet Union because of the particularity of history which allowed the Soviet Union at the end of World War II to occupy a [simultaneous talking] a chunk of Europe, right. I mean that would be denied. That will not happen to the Chinese so you can't really compare them. But I think what we have to do with China, I think we have to deal with them, we have to recognize that a huge country like that has aspirations to be a big player in the world. But we have to understand that they will always operate as an authoritarian country and that you understand the nature of who you're dealing with. >> Prime Minister Howard: And the order of the day is pragmatism. So I thought President Bush, George W Bush had a good policy in relations with China. He kept the temperature down regarding Taiwan. He revitalized America's relationship with Japan which although is very close, they've got a big style, I think and he revitalized it. And also very importantly, he reached out to India. And for the first time in decades, you had the world's two largest democracies, they have an awkward estrangement largely I think because in the early days of the Cold war[simultaneous talking]. I mean not everyone out that was there. They essentially would side with the Soviet Union more often than not. >> Prime Minister Howard: And I could understand the American attitude but I think what George Bush did with his visit to India back in 2005 was to really begin a new era in that association. I think it was very important and he -- I though his policy in that part of the world was quite skillful. >> Peter Robinson: Chinese -- the Chinese military, Chinese military spending over the last decade has risen from under two to just a little over four percent of their GDP and of course, this is at period when their GDP is growing enormously. So they're spending a lot on the military by comparison just a decade ago. Chinese Navy is one figure I was able to find now possesses more than 1,100 ships. That's almost four times as big as the American Navy. We're not saying they're as technologically equipped but in sheer numbers they're big, including three nuclear submarines. >> Peter Robinson: There's a similar debate taking place in Australia and the United States about how we should spend our defense dollars. Here in United State, Secretary Gates -- Secretary of Defense Gates came out with a new budget with remains relatively low. He's getting some of the bigger high tech programs and there's a new emphasis. Maybe he's ratifying the emphasis that's emerged during the war in Iraq on counter insurgency. How do you think Australia and United States should handle China? Should we be paying a lot of attention developing our conventional capability to hold this out to just to keep the Pacific calm?

9 >> Prime Minister Howard: Well, I don't see China as having an aggressive intent. >> Peter Robinson: Not even toward Taiwan? >> Prime Minister Howard: In -- well, I think there's a better atmosphere in relation to Taiwan largely because of the result of a previous Taiwanese election. >> Peter Robinson: Alright. >> Prime Minister Howard: And I think there is more pragmatic -- I mean eventually, I think something will be worked out. But the imperative for us and for America and everybody between now and then is just to keep the temperature down and prevent a conflict by the end and I thought by the long -- a long progress in relation to that. As far as Australia is concerned, we should continue to spend at least what we are now spending on defense and even more, and one of the things I did in government was to increase our defense expenditure by about 47 percent in real term. It would have been [simultaneous talking]. Quite real. Yeah, in real term. But I heard about it arriving in place. >> Peter Robinson: So that gives you to what proportion of GDP? >> Prime Minister Howard: Well, it's still uneven. It's too [inaudible] and that's still around three percent. >> Peter Robinson: Really? >> Prime Minister Howard: Yet that's still quite low. But what we need to do is to keep building that up in my opinion and I have a very strong view that despite current economic difficulties defense expenditures should continue to grow. We've put a figure of three percent in real terms each year and I think the labor government in Australia should continue that because we have a big responsibility to have a capacity to deal with what are essentially called peace-keeping operations in the Pacific, and we also need to have a capacity to work in coalition with countries like the United States in other military operations in other parts of the world and I think they are the twin imperatives, if I can put it that way, at the slightest defense posture. >> Peter Robinson: Alright. Segment four: The Economic Catastrophe. John Howard on Fox News last November: "There is no comparison between the circumstances we now face and the circumstances in the Great Depression." Explain. >> Prime Minister Howard: Yeah, I think it is a false comparison to talk about the Great Depression in the same birth as what we now face. Because of Social Security advances, they will be nowhere near the social destitution, the world, South of America, South of Australia, South of -- in the 1930's with what one is going to be, which is now being experienced is going to be suffered. So, well, I understand why people measure everything according to the Great Depression.

10 >> Prime Minister Howard: And it might well be statistically. This will be the biggest down turn since the Great Depression. >> Prime Minister Howard: You can't really compare the two. >> Peter Robinson: Alright. Alright. Same Fox interview -- quoting you: "The overindulgence of loan making for those who couldn't afford to repay demonstrates that government should never use financial systems to deliver a welfare policy." What do you mean by that? >> Prime Minister Howard: Well, I think one of the fundamental courses of the current meltdown was that the subprime came about essentially because a lot of people were lent money why they couldn't repay it. >> Prime Minister Howard: And that should never happen. >> Peter Robinson: Too many people got into homes. They just couldn't afford it. >> Prime Minister Howard: It shouldn't [simultaneous talking] without any real capacity to service the loans. >> Prime Minister Howard: And then they just handed in the key and there's a lot of overbuilding and all of that. Now I'm not saying there weren't other mistakes made but this played a very, very big part and the thought I'm making is that if a government wants to help a poor person by something, it's better that they give that poor person a check off the bottom line or the budget than the heavy banks and financial institutions into lending that poor person money in circumstances where he or she can never repay the money. That's about it. >> Peter Robinson: So Congressman Barney Frank who leaned on Freddy Mac and Fannie Mae for years to make low cost subprime loans available, there's a heavy responsibility for it. >> Prime Minister Howard: Well, I mean I don't know Barney and [laughter] -- >> Peter Robinson: Alright.

11 >> Prime Minister Howard: But look, that policy -- >> Peter Robinson: Alright. So it's the point. Alright, the policy, right. >> Prime Minister Howard: The policy is wrong, the policy of having institutions into making unsustainable loans. >> Peter Robinson: Alright. Now, that bit makes perfect sense to me, your fellow conservative, that the government intervened, messed around with the price system, distorted signals and made a mess of the market place, make sense. Milton Friedman would understand that in a moment, Margaret Thatcher would -- here's the bit that I wanna press you on. It wasn't just government policies. These big financial institutions, these people who were in a competitive market place who had every incentive running these big financial institutions to understand their -- they put -- they carried instruments on their books. They didn't understand and they couldn't value. Doesn't that shake your confidence in the free markets in in of themselves? >> Prime Minister Howard: No, it doesn't shake my confidence. I mean the -- I believe in the free market system. It never carries with it the benign belief that some people won't abuse that freedom. I mean freedoms can always be abused and obviously some people did. But one of the fundamental problems was the product that they indulged their abuse with was in many cases is a dead product in the first place and that is a non-sustainably generous subprime alone. >> Prime Minister Howard: I mean if you securitize something that is the same product then the end result of that securitization will not be as bad as the end result of the securitization that's happening into dead product in the first place. >> Peter Robinson: Okay. I'm quoting you once again. "There's been a failure of regulation in some areas but the answer is not to start heavily re-regulating the financial system either in the United States, Europe, or anywhere else." Take that for a moment. Now let me describe what our president and his administration have done in this country. They've effectively nationalized the banks, called for an increase in spending so sharp that it will give us the biggest federal budget deficits since the second World War and cooperated with the Federal Reserve in an unprecedented expansion of monetary reserves. Is the administration prompting economic recovery or getting in the way? >> Prime Minister Howard: Well, I worry about any government which goes too heavily into debt. I think it's unavoidable when you go to recession that your budget will possibly dip into deficit because the revenues fall very sharply.

12 >> Prime Minister Howard: That's actually -- that's unavoidable. But the big question is how far you add to that, how much you add to that and I worry very much that governments all around the world including the Australian government, the British government is spending too much and that -- I mean the British budget as I recall was about 11 and a half percent of GDP deficit. Now that is astronomical, and the problem with Britain and to some extent the United -- well, to some extent the United States, both of those countries have entered this recession already heavily in deficit. And if you add to that too much, I think you are putting a burden on future generation. I think there is a case for governments doing everything they can to reduce the cost of employing people. The key human factor in this downturn is how high will unemployment go. >> Prime Minister Howard: I mean we can talk about it in -- >> Peter Robinson: So it's a little over 10 percent here in California. >> Prime Minister Howard: Oh, yeah? Oh, yeah. Well, this is the human dimension. When you and I both have jobs, it's the people out there who got lazy jobs that we're gonna worry about and I think anything a government can do, reducing payroll checks, removing regulation that discourages people being taken on, stupid, unfair dismissal laws rejects the -- discourage people getting employed in the first place. I think the other sort of things that you should get rid off and I think if governments focused on that and there is also a case for longer term infrastructure investment because infrastructure makes a contribution to the economy operating in a smooth fashion. But I for example have real reservations about just sending checks through the mail to each and everyone. To start with, if I got a check from the government of the present time and I have a lot of debt, I wouldn't spend it. >> Peter Robinson: To pay them, right. >> Prime Minister Howard: I'd use it to pay them the debt and that's why we're taught by our parents. I mean so much of what is being exhorted of people at the moment by governments all around the world is counterintuitive. When things are difficult, you'd conserve. You don't go out and splash. >> Prime Minister Howard: And I think it's a false economy and I'm unconvinced that a lot of this physical stimulus is going to add to economic activity. >> Peter Robinson: Will the Chinese go on financing the American deficit? >> Prime Minister Howard: Oh, I think they will because-- >> Peter Robinson: They will?

13 >> Prime Minister Howard: You know what? I think the Chinese will continue to invest their surpluses in US Treasury. Well, because the reality is that America -- at the end of all these, America is still gonna be the strongest economy in the world and one of the great advantages America has despite what any administration does, it's still fundamentally a capitalist unregulated economy compared with most in the world -- world wide remain so. And that is the reason why although we'll go into this recession ahead of some of the countries and go in very deeply, I think America will come out of it earlier than other country because essentially it's an unregulated economy-- >> Peter Robinson: By comparison at least. >> Prime Minister Howard: Well, by comparison-- >> Prime Minister Howard: --with countries like some of the countries of Europe, I mean which have now got unemployment rates of 9, 10 percent when they entered the recession. Segment 5: Then and now. Here's then. You have referred to Margaret Thatcher and Ronald Reagan as "great warriors in our cause." Here's our mutual friend John O. Sullivan on Margaret Thatcher. He sums her up in three words. "She saved Britain." Do you grant that? >> Prime Minister Howard: Yeah I do, I do that. >> Peter Robinson: You do? >> Prime Minister Howard: I agree with that. I think -- I think Britain was a demoralized country on sharp descent when Margaret Thatcher took government and she gave Britain back to her self-belief. >> Peter Robinson: Margaret Thatcher herself on Ronald Regan. "Ronald Regan won the Cold War without firing a shot." Would you grant that? >> Prime Minister Howard: I do, I think-- >> Peter Robinson: You are not of the school to believe Mikhail Gorbachev is the one who ended the Cold War and Regan was irrelevant or the Soviet Union collapsed under its own? [ Simultaneous Talking ] >> Peter Robinson: What Reagan did -- and Reagan and Weinberger and others did with their renewed commitment, in my view, to military spending and the like, what they did

14 is they confronted the Soviet Union with its inherent weakness and I think what he did is he stood up for what he believed and he had a lot of people shuffle their feet. I mean there was plenty of moral privilege at the time Reagan together. Right. Right. So Margaret Thatcher and Ronald Reagan, both cut taxes, deregulated their economies, limited the growth of government, rebuilt their nation's defenses and in Mrs. Thatcher's case, particularly privatized every industry she could including homes, those council homes where she permitted people to buy those. >> Prime Minister Howard: She also had direct power of the unions. >> Prime Minister Howard: That was tremendously important in Britain. And it worked. By the Cold War I, the economy's alright. Now here we are a quarter of a century later, Prime Minister Brown in Britain and President Obama in the United States have nationalized banks, increased government spending and even though both the British and American Armed Forces have frayed largely because of the war in Iraq, are engaging in only modest defense outlays. So here's the question Prime Minister. Read all your speeches and one is struck over and over again by how optimistic you are, but we don't learn, we don't learn. We have this example in the '80s of a limited government, lower taxes, proud stand in the world for the Anglosphere that we've discussed and here we are just 25 years later, the democracies have put in leaders that are repudiating nearly everything Margaret Thatcher and Ronald Reagan stood for. It's a mess. I put it to you that you're too optimistic. >> Prime Minister Howard: I take a long view and-- >> Peter Robinson: [Laughter] Things will come around in a century or two. >> Prime Minister Howard: Well, no -- well, you know, earlier than that I did take along view because I mean that is -- that is the nature of a democratic system that you guys repeat periods and what is the most decisive thing that happened in my political lifetime and I'm -- I'll turn 70 this year. The most decisive thing that's happened in my political lifetime is the collapse of Soviet imperialism. It dwarfs anything else and the other decisive scene is that despite all of what we are now witnessing in the world, in the last 30 years a liberal economics globalization has lifted hundreds of millions of people out of poverty. >> Peter Robinson: China, India-- >> Prime Minister Howard: China, India, countries like Thailand, Indonesia around here was named the largest Muslim country in the world. Indonesia's economy, well it's getting buffeted. It's doing somewhat better than many people thought it would. So the point I'm making is that sure, we now have a government or economic theory in the

15 ascendancy which involves too much government regulation and too much government spending for me and for you and for many others. The ledger is very much on the side of economic liberalism and political freedom and those two great events are a signature for what's been achieved. >> Peter Robinson: In his great book Modern Times, the historian Paul Johnson referred to the 1970's as the Western world's suicide attempt. What do you think we're in for now as compared with the 1970's with the stagflation that we've suffered, with this -- the shocks to American and British, the morality of the entire Western world of Soviet expansion, the quagmire in Vietnam? How bad is it going to get now? >> Prime Minister Howard: Well, I think the course of Europe -- the point in line about the Soviet expansion, I think the collapse of the command economy alternative has permanently changed. >> Peter Robinson: That's gone for good. >> Prime Minister Howard: That's gone for good. >> Peter Robinson: And there's no -- there's nobody on the scene now. >> Prime Minister Howard: There's nobody on the scene that's arguing for this. That's gone forever. So -- and that is a hugely significant thing and I guess my view is well as to remain optimistic, is that whatever steps back, they might return us to the circumstances of the 1970's. I mean I don't think we should go into deficit that's too far away. We certainly shouldn't re-regulate. I see no virtue in doing that but I think in the end, whatever happens the degree of government control of economies will be nothing alike what it was in the '60s and '70s. >> Peter Robinson: Now, again, I'm struck reviewing your speeches about your optimism, your optimism about Australia and its place on the world, in the Pacific. Europe has suffered decades of slow economic growth below replacement level birth rates. The United States, we're suffering an economic crisis and the new government intent on expanding state control. Islam, I put it to you, that culture is rising. Asia is rising. But the West, so here's my -- here's my -- yeah, I put this to you that as brave as it is, as admirable as it is, I'm with Russell Crowe. "Thank Christ for Australia." The notion that that outpost of Western civilization can stand as the rest of the Western world weakens and as Islam and Asia rises, I put it to you that though honorable though the struggle may be, there's no good reason to be optimistic about Australia's place in the Pacific. >> Prime Minister Howard: Well, my reply to that is there's nothing fundamentally contradictory between a strong Asia and a strong and prosperous Australia. They can complicate each other, I mean China and Australia but-- >> Peter Robinson: You've already sorted on how to live with the giant.

16 >> Prime Minister Howard: Yes, but look at India. >> Prime Minister Howard: I mean India -- >> Peter Robinson: How much trade does Australia do with the [inaudible]. >> Prime Minister Howard: No, no, we don't have a lot of trade. >> Peter Robinson: You don't have a lot? Right. Right. Right. >> Prime Minister Howard: No, no, no, no, no, we have virtually none. >> Peter Robinson: Alright. >> Prime Minister Howard: But, I mean politically we're very similar and the best improvement of all, we both play cricket. [ Laughter ] >> Prime Minister Howard: And that -- >> Peter Robinson: [Inaudible] playings. The Anglosphere. [ Simultaneous Talking ] >> Prime Minister Howard: That is-- >> Peter Robinson: That's what so important about the Anglosphere. >> Prime Minister Howard: [Laughter] That is very important. So I don't see that count and the other thing that gives me a lot of optimism is Indonesia. Indonesia is the largest Muslim country in the world. >> Peter Robinson: Four hundred million population as I recall. >> Prime Minister Howard: No, no, no, no, about 200 and-- >> Peter Robinson: Excuse me 200. Alright. >> Prime Minister Howard: Yeah, and Indonesia in 10 years has gone from a military dictatorship under Suharto to the third largest democracy in the world under President Yudhoyono. Very important country to Australia and the most important thing about Indonesia is that it is the great, might have put it this way, liberal Muslim experiment.

17 >> Peter Robinson: Islam can coexist with democracy. >> Prime Minister Howard: Well, [simultaneous talking] it can, it can if you have moderate Islamic leaders like Yudhoyono, people are good Muslims and I respect Islam and the religion, its true values but abhor terrorism. I mean we have been joint victims of terrorism. The Bali attack claimed a large of alien Australians and a lot more people in Bali. Now we work together and the people responsible have been executed by the Indonesian authorities and I see a lot of hope in Indonesia but it's very important that Indonesia succeed because if it doesn't, that'll be grist to the mill for the fanatics because the fanatics said, "I believe in democracy, I believe in modern Islamic leaders" and terrorism in Indonesia is something that has to be constantly watched over. >> Peter Robinson: Last question. We have time for me to ask a question as long as I ask you to reply in about two sentences. >> Prime Minister Howard: Hmm. >> Peter Robinson: What do Americans need to know about Australia that they don't? >> Prime Minister Howard: I think I understand Australia is a good friend with essentially the same values but always be blunt but loyal friend. >> Peter Robinson: A blunt but loyal friend. Prime Minister John Howard, thank you very much. >> Prime Minister Howard: Thank you. >> Peter Robinson: I'm Peter Robinson for uncommon knowledge. Thank you for joining us.