My Amazon Review of Jeffrey Garten's "Three Days at Camp David..........."

 

The Nixon Shock

 

Former Yale School of Management Dean and long-time economic policy official in the Nixon, Ford, Carter, and Clinton administrations as well as being husband of Ina Garten, the Food Network’s Barefoot Contessa; Jeffrey Garten placed you in the room where global monetary policy was upended over an August weekend in 1971. Garten offers keen insights into the personalities in the room at Camp David. Of course there is Nixon whole loved to do bold and daring things, there is his Secretary of the Treasury John Connally who was the super hawk on trade and who was completely transactional, there was Arthur Burns the pipe smoking and vacillating Fed Chief, there was Peter Peterson forward thinking Nixon policy advisor, there was William Safire, the man who would write Nixon’s speech and there was Paul Volcker, the Under-Secretary of the Treasury for Monetary Policy who knew more about what they were about to do than anybody else.  And although Henry Kissinger wasn’t present he had to deal with the after effects of of upsetting America’s allies.

 

What they did that weekend was to take the United States off the gold exchange standard which was the foundation of international economic policy since the 1944 Bretton Woods agreement. What they also did was enact a 90-day price and wage freeze which would ultimately turn into an unmanageable regime of wage and price controls that would last for a few years. They also put a 15% tariff on European and Japanese imports upending the United States’ postwar free trade policy. It truly was the Nixon shock. U.S stocks initially rallied and Japanese stocks crashed.

 

Garten explains in a nontechnical manner how the U.S. was running out of gold to back its currency and the economy was suffering from a bout of stagflation with rising inflation and unemployment. Although he doesn’t specifically mention it, Garten was writing about the Triffin Dilemma where the supplier of a global reserve currency has to continually supply increasing reserves to the world and in order to do that it has to run a balance of payments deficit. Thus, in the summer of 1971 U.S. gold reserves stood at $10 billion while foreign central banks had accumulated $40 billion in claims. Simply put we were broke.

 

Garten starts his story in the late 1960’s when in fact he should have started it in November 1960 when after Kennedy’s election the price of gold soared from its fixed $35 an ounce to $40 an ounce. The market feared a U.S. devaluation which last occurred in 1933.  The Kennedy Administration talked the market down but from then on, the balance of payments issue outlined by Triffin was top of mind among economic policy officials.

 

Although it didn’t happen right away the Camp David meeting set into motion the transition away from fixed exchange rates to floating exchange rates, a regime we live under to this day. It also signaled that balance of payments considerations would no longer affect domestic monetary and fiscal policy opening the way to very expansive policies. After all Nixon wanted a booming economy to get re-elected. He got it and along with OPEC the way was open to the 1970’s inflation. Garten, I think rightly argues that the Nixon team didn’t have much of a choice with respect to leaving the gold exchange standard but was horribly wrong with respect to wage and price controls.

 

One of the things that impressed me was Garten’s insights into John Connally. Connally was a brilliant synthesizer of complex information and he greatly respected Paul Volcker. He backed him to the hilt even when Nixon had his doubts. He also writes very favorably about Peter Peterson who ultimately hired him at Lehman Brothers and later at Blackstone. How influenced he was by his friendship with him, the reader does not know. Lastly as with Nixon’s sense of the dramatic, only one month before Nixon upended 30 years of U.S. policy by announcing his visit to China.  All I can say the heads of my left-liberal friends were spinning as Nixon adopted many of their policies.

 

Jeffrey Garten has given us great insights as to how a major policy decision was made and the importance of the personalities involved. I highly recommend the book.

For the full Amazon URL see: The Nixon Shock (amazon.com)

My Amazon Review of Ian Ona Johnson's "Faustian Bargain....."

 

The Secret Outlaw Alliance

 

With the ink hardly dry on the Versailles Treaty Europe’s two outlaw states, Germany and Russia, left the Genoa Economic Conference slipped away to Rapallo, Italy to make a separate peace treaty. What followed was a ten-year period of military cooperation where Germany, in violation of the Versailles Treaty, that would establish three bases in Russia to design and develop aircraft, tank, and chemical warfare technology while Russia would benefit from German know how and engineering technology. Notre Dame history professor Ian Ona Johnson turned his Ohio State Ph.D. dissertation into this very readable book.

 

Johnson goes into great detail in discussing how the German program was funded secretly and was run in succession by generals Seeckt, Groener and Schleicher. The policy was supported by both center-right and center-left governments. Further German firms Krupp and Junkers were in up to their eyeballs in Russia. A major motivation for the Russo-German efforts was Poland. Because Poland was carved out of Russian and German territory both parties had an interest in destroying it. What was talked about in 1922 came about in 1939.

 

Many of Germany’s World War II generals cut their teeth in Russia including tank commander Heinz Guderian the lead author of Blitzkrieg warfare. The protypes of the tanks and aircraft that both Germany and Russia went to war with in 1939 were developed in Russia. Further, it was in Russia, where Germany developed the use of radio transmissions to coordinate their tanks in the field, a major advantage of the flying of flags. The Russians developed a tank that would allow for tree person crews which freed up the commander to guide the battle. Both the three person crews and radio coordination would prove decisive in the Battle of France in 1940.

 

For their part, the Russians upgraded their military to adopt the German general staff model. It was his contact with the Germans that Russian general and strategist Mikhail Tukhashevsky developed his theories about deep battle, maneuver, and economic mobilization. Although shot by Stalin during the great purge, it was Tukhashevsky’s strategies that saved Russia from the Nazi onslaught. It was also during this period that Russian airplane designed Tupolev upgraded his craft.

 

The period of joint cooperation would end with Hitler coming to power in 1933. However, by that time both Britain and France were no longer interested in enforcing the strictures of the Versailles Treaty that Germany no longer needed secret bases in Russia to test their weaponry. A new Rapallo would emerge with the signing of the Molotov-Ribbentrop Pact in 1939, but that would end in June 1941 when Germany attacked Russia where both parties utilized what they learned in the 1920’s to a devasting effect.

 

Great credit is due to Johnson to keep the reader interested in what could have been very dry military history. Also of note is that he supports my theory that the untimely death of Foreign Minister Gustav Stressemann’s death in October 1929 could have had far reaching consequences. Stressemann was the only politician in Germany who could have stood up to Hitler.

For the full Amazon URL see: The Secret Outlaw Alliance (amazon.com)

My Amazon Review of Francine Prose's "The Vixen"

 

Cold War Fantasy

 

Francine Prose has offered up a Cold War fantasy. She has Simon Putnam, who despite his name, is a Coney Island Jew who recently graduated from Harvard with a folklore major. Through his uncle he ends up being a very junior editor at the snooty publishing firm, Landry, Landry, and Bartlett. There the very naïve Simon is chosen to edit a bodice-ripping fantasy that turns the very frumpy atomic spy Ethel Rosenberg into a Mata Hari who has sex with her Soviet controllers and her prosecutors. 

 

The book entitled “The Vixen, the Patriot and the Fanatic” was presumably written Anya Partridge who has very kinky tastes about the places to have sex. Further the book was supposed to be a bestseller that would financially rescue the failing publishing firm. Of course, Simon does not ask why he was chosen to edit the book and he is looped into Anya’s life with a series of sexual encounters. Not only is Simon naïve about his assignment, but he also has a habit of falling in love way too easily.

The story is all personal to Simon because his mother knew Ethel Rosenberg from her neighborhood and the book opens with the execution of the Rosenberg’s in June 1953. All of this is going on against the backdrop of the growing power of Senator McCarthy and the misadventures of the early CIA.

Prose is way too sympathetic to the Rosenberg’s, especially Ethel. Her husband Julius was running a vast spy ring more encompassing that stealing atomic secrets. And Ethel was no communist wallflower, she was into the party up to her eyeballs and Julius’ work. Whether she deserved to be executed is a separate question, but remember the Soviets wanted her dead too.

Prose knows how to write, and if her politics did not get in the way it would have been a better book.

For the full Amazon URL see: Cold War Fantasy (amazon.com)

My Amazon Review of Taylor Jenkins Reid's: "Malibu Rising: A Novel"

 

Malibu Soap in the Surf

 

Taylor Jenkins Reid tells the story of the trials, travails, and successes of the Riva family in Malibu. The book revolves around a 1983 end of summer party at their Malibu home where Hollywood and the surfer contingent engages in debauchery along with lots of family drama. We learn of the Riva family through flashbacks going back to the 1950’s. And we know from the introduction that it will end with a fire. This is not a serious novel; it is a light summer beach read.

 

There are strong, yet flawed women; all of them drop dead good looking. The men are serial philanderers, especially Mick Riva, a super star ballad singer. Riva succeeds in messing up his family on many levels and his four kids and wife suffer for it. His eldest daughter Nina holds the family and the story together. She exhibits great strength, and her body enables her to become a pin-up surfer girl that rescues her from her family’s restaurant. She too follows in her mother’s footsteps by marrying a philandering tennis star. In the end she rises above the family drama and finds herself. As I said at the outset it is a beach read.

For the full Amazon URL see: Malibu Soap in the Surf (amazon.com)