This Berkeley professor's work explaining the fall of the dollar as a global currency -- and why it might not matter -- has made him a "go-to economist on the continuing global financial crisis," according to Pulitzer-winning New York Times columnist David Leonhardt. Barry Eichengreen's new book, Exorbitant Privilege, is an eye-opening look at the history and future of global currency. The bad news, for Americans at least, is that the dollar will soon lose its status as the world's dominant reserve currency, gradually sharing the role with the euro and the renminbi. The good news is that this shift won't necessarily hurt Americans. "[T]he fundamental fallacy behind the notion that the dollar is engaged in a death race with its rivals is the belief that there is room for only one international currency," Eichengreen writes. His latest book presents a sorry picture -- but one with a silver lining: American decline, he says, could be better for everyone.
Muse Aimee Mann.
Stimulus or austerity? Stimulus now. Austerity later.
America or China? Both.
Arab Spring or Arab Winter? Winter comes before spring.
Reading list Poor Economics, by Abhijit Banerjee and Esther Duflo; The Enlightened Economy, by Joel Mokyr; The Museum of Innocence, by Orhan Pamuk.
Best idea Swiss Commission of Experts' proposal for addressing the problem of "too big to fail" banks.
Worst idea Expansionary fiscal consolidation.
Just as Robert D. Kaplan's book Balkan Ghosts and seminal 1994 article "The Coming Anarchy" were required reading in Bill Clinton's White House, the prolific journalist's current writing may become defining texts for the conflicts of the 21st century -- which, he says, will be centered in Asia.
Kaplan's latest book, Monsoon: The Indian Ocean and the Future of American Power, predicts a world where ethnic disputes and the battle for resources make the Indian Ocean the new center of global instability -- with a strong role left to play for the United States. According to Kaplan, the Indian Ocean region "may comprise a map as iconic to the new century as Europe was to the last one." And Barack Obama's administration seems to agree, making much of what Hillary Clinton has called a "strategic turn" east.
Whatever the region, Kaplan remains committed to his long-standing faith in pragmatic realism. He writes in FP, "It is realism in the service of the national interest … that has saved lives over the span of history far more than humanitarian interventionism."
Muse Yearning for dignity and justice in the developing world.
Stimulus or austerity? Stimulus.
America or China? America.
Arab Spring or Arab Winter? Arab Winter.
Reading list Nothing to Envy, by Barbara Demick; China: A History, by John Keay; Doctor Faustus, by Thomas Mann.
Best idea The U. S. presidential system with its separation of powers may not be as well suited to the rigors of the 21st century postmodern age as the parliamentary system used by most other democracies.
Worst idea Realism is dead because of the Arab Spring.
Bruce Bueno de Mesquita doesn't have a crystal ball. But through mathematical modeling and a keen understanding of the nature of political power, the New York University professor has proved remarkably adept at predicting events, from the Tiananmen Square crackdown to the Second Intifada to the failure of international attempts to stymie Iran's nuclear program. Bueno de Mesquita has consulted with the CIA and State Department using his modeling method, which simulates leaders' behavior while making stressful decisions. In May 2010, he and colleague Alastair Smith told a group of investors that Hosni Mubarak's regime was likely to collapse soon.
This year, Bueno de Mesquita and Smith released The Dictator's Handbook, which reduces the art of staying in power to a set of surprisingly simple rules, most of which boil down to knowing which supporters are crucial and figuring out how to placate them. At the end of the day, he believes, leaders will do whatever it takes to retain power. He writes: "It is surprisingly easy to grasp most of what goes on in the political world as long as we are ready to adjust our thinking ever so modestly."
Muse Honest self-reflection.
Stimulus or austerity? Stimulus (increase spending but cut taxes in the short term).
America or China? America.
Arab Spring or Arab Winter? Arab fall.
Reading list Freedom, by Jonathan Franzen; Ultimatum, by Matthew Glass; The Warmth of Other Suns, by Isabel Wilkerson.
Best idea Amnesty for dictators who step down trumps pursuit and punishment.
Worst idea Foreign assistance will help Libya or Egypt become more democratic.