Thought-Provoking Reads 2018

As 2018 winds to an end, and 2019 lookaheads are completed, its time to share a few books that stuck with me this year from the 50 non-fiction books I read or listened to this year. Given my IPE teaching this fall, and ongoing macro risk work for clients, my non-fiction reading was dominated by corruption, country risk cases as well as a lot on AI, future of work and big data. Surprisingly, I read a lot of fiscal policy, perhaps fitting in the year when the biggest expansionary policy in peacetime came into effect and in which the costs of unwinding the big monetary stimulus experiment began.
What were your favorites, what did I miss and what’s on your reading list?

Taxing Wars by Sarah Kreps
Kreps’ summary on the financing of war does a great job of summarizing the key political economy decisions of conflict finance, as well as the development of taxes more general. She highlights the difference between total wars which included major mobilizations of financial and human capital via taxes, war bonds etc and troops – the world wars – and other conflicts, particularly more recent ones that relied on broader debt accumulation that was hidden among overall spending. Unsurprisingly as time went on both financing and fighting of wars became harder to isolate from broader spending, something that culminated with the 21stcentury conflicts in Iraq and Afghanistan, but became an issue also during the Vietnam war.  The later conflicts, with the financial burden deferred and military burden borne by a select part of the population raise a set of choices. I followed up by listening to Michael Beschloss’ book on wartime presidents, which tackled many of the same conflicts, from a broader political angle. Both books highlight the interplay between Congress and the presidency about the act of war, something relevant today when asymmetric economic war is far too frequently addressed.

Crashed by Adam Tooze topped many an econ list in 2018, and will likely go on my IPE syllabus next year. It took me back, occasionally a little too vividly, to many an intense weekend writing about policy failures in the waves of financial crisis of the last decade. This is the first real history of these years and is particularly strong on the transatlantic implications and policy failures in Europe.   Tooze highlights the power structures and interests that shaped crisis response, increased vulnerability to the financial aftershocks and ways in which the USD financial system – a mainstay of the sanctions regime – increased rather than reduced its influence in the world. I’d have liked to see a little more reference to energy and emerging markets, but perhaps for the next book.

Billion Dollar Whale by Tom Wright and Bradley Hope. An eye-opening cautionary tale of transnational fraud, financial exuberance and the importance of due diligence. Wright and Hope illuminate many of the scams that led to the failure of Malaysian fund 1MDB scandal, the fall of the UNMO political grouping and ensnared a range of asset owners in Asia and the Middle East and many global asset managers who were too focused on high fees to do enough due diligence. I’d been familiar with some of the nodes (in Abu Dhabi, and Malaysia in particular), but they do a great job connecting the dots. In a world of so much financial scrutiny for individual transactions and KYC measures, the story is even more shocking.

Billionaire Raj by James Crabtree, details a range of India’s super rich, the political system that empowers them and some of the challenges capturing and channeling that wealth. The book highlights the increased extreme inequality in India, and highlights important moves and shakers. Like Alex Cuadros’ Brazilionaires, one of my favorites a few years ago, it highlights important power and financial bases that have been able to succeed despite and perhaps because of government changes. An important read ahead of next year’s election. Alyssa Ayres book on India was a another good assessment of India’s increased regional and global role and the constraints to doing so.

Revolution Francaise by Sophie Pedder  Pedder’s biography of Emmanuel Macron was a late addition as I picked up in the last few weeks to better understand the Gilets Jaunesprotests and other challenges to Macron’s policies. Pedder, the Economist’sParis correspondent, draws on a long relationship with the young leader, highlighting several factors that coalesced in his win – including the dichotomy of a grass roots movement with a clear leader, and his “both-and” philosophy. Both are being challenged against a more traditional grass roots movement, and call into question Macron’s focus on Europe and some of his reforms.. A good catch-up for those who hadn’t been watching France.

China’s Great Wall of Debt Dinny McMahon manages to shed a lot of light on a topic that many have written about in the financial press – Chinese debt burdens and the political structure that avoids dealing with them. McMahon, who reported on many of these issues as a journalist has put a strong structure around the issue, addressing the local and national issues around these debts and the varied interests. Other good books on China I read this this year include Elizabeth Economy’s Third Revolutionon the overall policy changes under Xi Jinping – and Kai-Fu Lee’s AI Superpowers– both required reading for those wanting to assess U.S. China strategic competition, which is set to be a major driver in 2019 and beyond.

Public Wealth of Cities by Dag Detter and Stefan Holster
Detter/Holster follow up their Public Wealth of Nations with a volume focused on how cities can better value and utilize their public assets (property etc). Key in their view is creating a city balance sheet, handing over management to private sector and planning for the long-term as opposed to just treading water and meeting the current deficit. Lots of good case studies of cities infrastructure solutions. I fear they understate the importance of very clear regulation and guidelines to make sure any private sector managers and civic authorities stay aligned.

Taming the Sun by Varun Sivarum
 This call to action on solar energy investment has a nuanced argument – make sure to invest both in installing existing technology, but also continue to invest in new tech to avoid lower marginal benefits and challenges to the system.  Sivarum who has spent time on the technology and research side as well as policy argues for investment in research of new technologies as well as installation. His edited small volume on digital decarbonizationis also worth a read, especially regarding the extensive energy demands of major data transfers and processing.

Dopesick by Beth Macy connected the dots for me about the drivers of the opoid crisis, the role of some of the pharmaceutical firms that were slow to adjust their products and contributed to over-prescription and some of the socio-economic factors and regulatory decisions that extended their hold, including choices of many rehab clinics to restrict methadone use. It was light on some of the cross-border implications including the synthetic opoids from China or smuggled drugs across the Mexican border better tackled elsewhere.

Give People Money by Annie Lowry and A Fine Mess: A Global Quest for a Simpler, Fairer, and More Efficient Tax Systemby T. R. Reid. 
These two books use international examples to articulate recommendations for U.S. fiscal policy with a focus on Universal Basic Income and a broad, universal tax system respectively. Both suggest that we look closely at experiments in a range of jurisdictions to assess their potential implications. While occasionally summarizing too much, they are useful primers on fiscal tradeoffs. Lowrey highlights cogently the challenges some people face in collecting benefits, especially once they fall out of housing, medical access and the like. While UBI has some issues especially regarding the appropriate level, its worth thinking about ways to provide a safety net.

Milk: A 10,000-Year Food Fracas by Mark Kurlansky. The latest of Kurlansky’s dives into a key commodity, Milkdetails human consumption of milk, its products and regulation and preferences across country and time beginning in prehistory. The centrality of milk implies some insightful sections of the regulations of women’s choices around breastfeeding and other consumption and the way milk products became such an important part of key societies. Interesting insight into the divides between “butter peoples” coming from northern climes and those heavier on cheese consumption, to avoid milk spoilage. Throughout, the changes in the relative status of dairy drives the story, concluding with important considerations on the tradeoffs on the institutionalization of dairy, its carbon footprint. Perhaps its no surprise I read this just after the NAFTA/USMCA talks concluded with concessions on supply management.
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The Long Hangoverby Shaun WalkerA compelling story of how Russian leaders, especially Putin have used history to justify war and conflict and how nationalistic rhetoric and policies have supported recent resilience. A good read especially for those who are less familiar with Russian history.  Other “Russia related books included Craig Unger’s House of Trump, House of Putinwhich told a scary story of financial interlinkages from the FSU to New York real estate, including many names made famous by the Mueller investigation