Our Recommended Summer Reading List (Part I)

Memorial Day is here, and that means summer is upon us. I" 'm a big fan of recommended book lists - I collect them! - and, for the first time in my life, I took a stab compiling a list of ten books I've read this year that I really liked. Hopefully, you will find them as entertaining and enlightening as I did when lounging on the beach. I hope to have a second list of recommended books later this summer, too. 

The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism by Sebastian Edwards (Princeton Press, 2024, 376 pages)

In 1955, the U.S. State Department launched the "Chile Project" - an effort to train and assist Chilean economists at the University of Chicago to help embed free market policies in the country. A steady flow of Chile's best and brightest matriculated through the University's graduate program, studying under some of the most brilliant economists in the World, including Milton Friedman. By the time General Augusto Pinochet overthrew the Neo-Marxist regime of President Salvador Allende in 1973, this cadre of free market economists was in a position to move sweeping reforms of privatization and deregulation. This is a fascinating history of what happened, the impact it had not only on Chile but the whole region, and how Chileans ultimately rebelled in 2019 against neoliberalism and elected Gabriel Boric president, a socialist dedicated to ending "neoliberalism." We would note, however, that Boric has struggled badly to implement his promised changes, including two failed efforts to rewrite the constitution.

US - Taiwan Relations: Will China’s Challenge Lead to Crisis? By Ryan Hass, Bonnie Glaser, and Richard Bush (Brookings Institution Press, 2023, 184 pages)

Over the last two years, markets have been concerned about a possible invasion of Taiwan, how the U.S. would respond, and what it would mean for the global economy. However, in our conversations with numerous market participants, many do not understand the dynamics of the US-Taiwan relationship, the history of China-Taiwan relations, and other important dynamics. Hass, Glaser, and Bush have published an excellent and much-needed examination of all these critical questions. To understand what is happening and what might happen, you must read this well-written and indispensable book.

We Win, They Lose: Republican Foreign Policy & the New Cold War by Matthew Koenig and Dan Negra (Republic Book Publishers, 2024, 220 pages)

Matthew Koenig's and Dan Negraea's book is getting wide circulation as something from a Republican foreign policy historical manifesto. The title comes from Ronald Reagan, who was asked in 1977 what the driving principle of his foreign policy was. His response: "My idea of American policy toward the Soviet Union is simple, and some would say simplistic. It is this: We win, and they lose." The authors, both admirers of Reagan and veterans of the Trump Administration, push back on the strain of isolationism currently running through the Republican Party. And it is having an effect as countless Republican operatives and strategists we've spoken to have recommended the book to me - and I'm glad they did, as it gave me an excellent inside view of where Republican foreign policy will likely go in the years to come.

Breaking the Mold: India’s Untraveled Path to Prosperity by Raghuram G. Rajan (and Rohit Samba ( Princeton University Press, 2024, 336 pages)

Former Reserve Bank of India Governor Raghuram Rajan and Penn State Professor Rohit Lamba write a fascinating and taunt guide to understanding what India has accomplished economically and what it still needs to do going forward. India's economy has overtaken the United Kingdom's to become the fifth-largest in the World. However, it is still only one-fifth the size of China, and India's economic growth needs to be faster to provide jobs for millions of its ambitious youth. Blocking India's current path is intense global competition in low-skilled manufacturing, increasing protectionism and automation, and the country's majoritarian streak in politics. Rajan and Lamba outline what needs to be done to overcome these challenges. 

The Dillon Era: Douglas Dillon in the Eisenhower, Kennedy, and Johnson Administrations by Richard Aldous (McGill - Queens University Press, 2023, 296 pages)

Having grown up in Washington, I was taught by my grandfather (who was a mega-lobbyist who knew presidents and the most influential members of Congress while having a brother who was the FBI Deputy Director under J. Edgar Hoover) that history is more often quietly made by the extraordinary men and women serving the President than the President themselves. Douglas Dillon was one of those men - who is sadly fading away with the sands of history. The scion of a fabulously wealthy family that founded the then-Wall Street powerhouse investment bank Dillon Reed, he never forgot the real roots of his family - his grandfather had been a poor Polish Jew who emigrated to the U.S., settled in Texas, changed his name to "Dylion" which was his mother's name and from which it was anglicized to Dillon. This thin biography does a fantastic job recounting Douglas Dillon, who served as Treasury Secretary, savvy advisor to Presidents, Ambassador to France (back when that meant something and was not just an honorific), and Wall Street titan himself. 

Unexpected Revolutionaries: How Central Banks Made and Unmade Economic Orthodoxy by Manuela Moschella (Cornell University Press, 2024, 188 pages)

I stumbled upon this slim little book in a bookstore, and once I started reading it, I could not put it down. A fascinating read looking at how central banks - specifically the Federal Reserve, the European Central Bank, and the Bank of Japan - have massively transformed from the staid and predictable institutions of the last century due to the shocks of the 2008 global financial crisis and COVID. 

In short, the playbooks central banks had worked from for decades had to be tossed, and new ways of dealing with economic shocks developed. The history the author covers is well-written and fascinating, but what was particularly engaging was how it has led to central banks stretching into areas far beyond monetary policy, such as climate change and inequality. The "neoliberal macroeconomic regime," as we have known it, is gone, and a new age of central banking is upon us in ways we are only just beginning to understand. 

Ian Fleming: The Complete Man by Nicholas Shakespeare (Harper Publishing, 2024, 864 pages)

Since he first wrote "Casino Royale" in 1953, Ian Fleming's James Bond has tightly gripped the imaginations of readers and moviegoers worldwide. It also helped Great Britain, struggling to get back on its feet after World War II, when the Empire began crumbling and colonial states broke away. Indeed, Fleming's Bond recovered a sense of Britain's strength, swagger, and pride so powerfully that James Bond has become enshrined as an actual emblem of "Great" Britain itself (Recall in 2012, then-Bond actor Daniel Craig - playing Bond one last time - joined forces with Queen Elizabeth in Buckingham Palace to go forth together in a grand video production to officially open the 2012 Olympics in London). But who was Ian Fleming? In this superb biography, Nick Shakespeare shows that Fleming was almost as mysterious and adventuresome as his James Bond.  He sought to "live a complete life," which led him to travel the World constantly, have an incredible career in British Naval Intelligence, participates in some of the most significant, most important moments of his time, and know everyone of power and wealth in the World.  It was a fantastic life - one defined by his Bond novels, of which he only spent the final twelve years writing. 

The Achilles Trap: Saddam Hussein, the United States, and the Middle East 1989 - 2003 by Steve Coll (Penguin Press, 2024, 556 pages)

We are now entering, rightly, the phase where historians and policymakers can begin to look back and examine the Iraq War. Why did we go in? Why was the intelligence so off? And, as Steve Coll does brilliantly in this new book, why did Saddam Hussein risk (and ultimately lose) everything by giving the false impression he had hidden stocks of weapons of mass destruction? Coll goes deep, looking at not just the U.S. side but the Iraqi side, the Iraqi generals, scientists, and other people of power who sat by and played into this tragic facade that ended up destroying Hussein's long reign of power, plunging the country into war, and forever changing the future of Iraq.

The Peacemaker: Ronald Reagan, The Cold War, and the World on the Brink by William Inboden (Dutton Press, 2022, 608 pages)

Having served in the Reagan White House, I love to read good, well-researched books on what was actually going on while I was there (I started there when I was 22 years old and left when I was 25). Inboden writes an excellent history of how Reagan and his team successfully ended the Cold War and helped expand democracy and free trade globally. But it was Reagan's determination and focus on defeating the Soviet Union - the Evil Empire - that made it all happen. This is a great read. 

Countering China’s Great Game: A Strategy for American Dominance by Michael Sobolik (Naval Institute Press, 2024, 218 pages)

Chinese President Xi Jinping's "project of the century" - the Belt & Road Initiative - is one of the most significant geopolitical gambits in recent memory, leveraging China's investments for political, economic, and military purposes around the World. Reaching around the World - from Asia to Africa to Latin America - China firmly set its grand strategy. So far, the U.S. and other Western and Asian democracies have not put up a comprehensive counter-strategy. Sobolik explains the Belt and Road efforts and offers an intelligent blueprint for the United States to counter it by playing off the one core weakness China has exposed to their plan: imperial overreach. 

Recommended Weekend Reads

February 17 - 19, 2023

We thought you might find the following useful reading. Let us know your thoughts and if you or a colleague want to be added to our distribution list. Have a great weekend.

·       “Asia’s Interest in Wholesale Central Bank Digital Currency – and Challenges to Cross-border Use” Carnegie Endowment for International Peace

As U.S. policymakers continue to examine the implications of China’s digital yuan in 2023, they should also take note of accelerating wholesale central bank digital currency (CBDC) research and development efforts across Asia. “Wholesale CBDC” refers to a digitized central bank liability designed for sizable (generally interbank) transactions and for which access is limited to certain financial institutions. India, Indonesia, the Philippines, and other Asian nations have launched Wholesale CBDC  pilot projects.

·       “Geo-Economic Fragmentation and the Future of Multilateralism” International Monetary Fund Staff Discussion Notes

Many in the markets continue to ask if we seeing a larger disintegration of global free trade as we have known it versus a global “re-wiring and re-calibration.”  The IMF explored this issue and possible ramifications.  It identifies multiple channels through which the benefits of globalization were earlier transmitted, and along which, conversely, the costs of policy-driven geoeconomic fragmentation (GEF)  and the consequences of GEF for the international monetary system and the global financial safety net. Finally, the Note suggests a pragmatic path forward for preserving the benefits of global integration and multilateralism.

Focus on Russia - 

·       “What Russia Got Wrong. Can Moscow Learn From Its Failures in Ukraine?”  by Dara Massicot, Senior Policy Researcher, RAND Corporation, Foreign Affairs

As the war in Ukraine drags on into its second year, the author argues that analysts must not focus only on Russia’s failures. The Russian armed forces are not wholly incompetent or incapable of learning. Indeed, there is strong evidence the Russian military has learned from its mistakes and made big adjustments. While they still are not been able to break Ukraine’s will to fight or impede the West’s materiel and intelligence support, Russia’s military could continue to adjust its strategy, “eventually snatching a diminished variant of victory from the jaws of defeat.”

·       “Russians abandon wartime Russia in historic exodus”  Washington Post

When Russian troops began pouring over the Ukraine border in February 2021, Russian civilians – many of them young, well-educated, and seen as the future of Russia, begin packing their bags and fleeing, worried about shut borders and martial law.  As many as one million Russians have fled in the last year including, according to the Russian government, more than ten percent of the country’s IT workers. Before the war, Russia’s population was in a spiral as one of the fastest declining in the world.

Charts of the Week

Russia’s Massive Population Exodus – Where Are They Going?: As the Washington Post piece above details, more than one million Russians have fled the country since the invasion of Ukraine.  While data shows, they have dispersed all around the world – with sizeable numbers going to the the UAE, Israel, and Argentina (which is experiencing a population boom of Russian “birth tourism” in a bid to gain joint-citizenship).  But the bulk of the émigrés have gone to these countries below:

The Post-COVID Return to Office Trend is Reversing:  As the risks of COVID began to recede, we all saw and experienced corporations pushing to get workers back into their offices.  As the chart below shows, data from LinkedIn shows that after the return-to-work trend rose last year, it has now begun to reverse.  This could be because more returning workers now want greater flexibility with their schedules and prefer to work from home more.

There are a variety of other factors possibly contributing to this, including weather, the cost of gasoline, and perhaps most importantly, after giving the office a try, workers were happier and likely more productive working from home.  As Axios reports, “It’s a sign that the balance between remote and in-person work will continue to oscillate with the times.”  In short, what many of us thought is true: Work will never be the same after COVID.

Recommended Book of the Week

“The American Imperative: Reclaiming Global Leadership through Soft Power”

by Daniel F. Runde

Full disclosure up front:  Dan Runde is an old and dear friend of mine. That said, writing a review of a friend's book is delicate stuff. It's like eating that friend’s cooking – it's either delicious, and you indulge, or it's terrible, and your mind races to think up fake allergies and/or a strange dietary restrictions you're on to get out of eating any more of their culinary disaster.

Thankfully, Dan made all this easy by masterfully cooking up a powerful, deeply thoughtful, and quite engaging proposal for America's role on the world stage. I happily indulged.

Of late, I've been frustrated by the flood of books on the market arguing about the loss of US power, how great power politics is once again upon us with enormous new security and economic risks, how globalization is over, how the world is falling apart, on and on – most without much in terms of thoughtful policy suggestions on how to deal with all these overwhelming challenges.   

That is what makes Dan's book so refreshing – he does not shy away from making suggestions. Instead, he gives a full-throated and authentic assessment of those challenges and very practical recommendations.  Dan has extensive experience contributing to all this, having worked at the World Bank, the US Agency for International Development, and, currently, as William Schreyer Chair in Global Analysis at the Center for Strategic and International Studies (CSIS).

Dan has achieved a lot in this slim little book – 219 pages excluding extensive footnotes and the index – and he has made a real contribution to the challenging debates, and decision-making needed now and in the future. I highly recommend it.

The Twilight Struggle, Then and Now

The Cold War is a distant memory for many of us of a certain age and nothing more than a textbook history lesson for the rest of us under the age of 40. But now, in the wake of Vladimir Putin’s brutal and bloody onslaught against Ukraine amid our collective prolonged worry and

apprehension about an increasingly aggressive China, many seem to be struggling to understand what it will take to keep the peace. History can and will guide us, so we go back to the history books for guidance and enlightenment. The first place we should start is with Hal Brand’s latest book. Brands, a noted Cold War historian, and former Pentagon advisor, presents an illuminating and richly researched lesson of how the US dealt with the challenge of the Cold War – that “Twilight Struggle” the West fought from the end of World War II until 1991 when the Soviet Union dissolved itself. Brands gives us a crisp examination of the many successes, and more than a few missteps US leaders experienced during these anxious years. Ultimately, it was the power of ideas and free markets that brought the West victory against a hollowed-out Communist empire – but it took extraordinary

work, innumerable policies and programs, and a willingness to stand strong that won the peace.

Brands ventures deep into those many challenges, strategies, and tactics the Cold War American Presidents, beginning with Truman to ending with Reagan and Bush, took up to win that “Twilight Struggle.” To be fair to potential readers, this is not light reading. But it is an excellent read for those fascinated by Cold War history. For everyone else who picks up this book, it is something of an incredibly well-timed primer for what it will likely require from all of us to strenuously defend freedom and democracy as we know it once again.