By John Cookson
Fareed’s ‘Book of the Week’ is Zachary Karabell’s The Leading Indicators: A Short History of the Numbers That Rule Our World. GPS's John Cookson spoke with him about trade with China and the troubles of telling just how well an economy is doing.
Last year the United States imported $314 billion more in goods and services from China than it exported to the country. This trade deficit is cited by some as an example of America’s economic decline and China’s ascendency. You say in the book, "not so fast."
I do say, "not so fast" because I think we are calculating the way goods and products are made in a way that goods and products are no longer made. The assumption that every product comes from one country is simply not true. It's something that many people who know this world better than I do have recognized and have tried to show the ways in which an iPhone and iPad are made up of multiple components from many different countries. If you were able to break down where the value of each of these products goes you would find that it goes to lots of different places, and it especially goes to whoever has created the intellectual property in the first place. But most of that is invisible for trade numbers. Because there isn't a system of breaking down every manufacturing good in the world into its component parts, we end up ascribing all the value to a country that has the factory, that did the final assembly, missing out on all these other aspects of how goods are made.
You mentioned the iPhone, which of course advertises itself as being "Designed by Apple in California" and "Assembled in China."
The reality is that from a trade perspective and official trade figures there is no "designed in."
You write that there are problems not only with measuring trade, but also with measuring the overall size of the economy. Should gross domestic product (GDP) and other economic measurements be replaced with something different, such as a poll of how happy we are?
I don't think replacing our numbers with other numbers is really the answer. A happiness index is appealing to people because it purports to measure the value of things, the value of life and the quality of life. But all it does is look at a different set of variables than GDP. There's no one number that can capture our experience of are we collectively and individually doing well. The kind of will-o'-the-wisp of we are going to find a number, a really simple number, and if it goes up that means we are all doing well and if it goes down we are doing badly – that's just silly on the face of it.
Considering all the shortcomings of the measurements that are intended to tell us how an economy is doing, how is the U.S. economy really doing?
There's no one answer to that question. And granted, the world is full of "one answers" to that question. What I try to do in the book is help us understand that, first of all, the economy is just a creation of numbers. It isn't a physical, tangible entity that we can easily measure.
If by "the economy" one means GDP, which is usually the default number that people go to to answer the question of how the economy is doing, GDP only measures how much stuff we are making and how much stuff we are consuming at market prices, that we can measure. And those last two parts are probably the most crucial – at market prices, that we can measure.
There's a lot that GDP doesn't include. The limitations of GDP have long been understood, but the degree to which we continue to cleave to it remains pretty much unmitigated.I don’t think there's an answer to how the U.S. economy is doing unless one starts becoming more specific. What is the earning potential of most people relative to their cost of living? How do we even decide what cost of living is? Companies are doing really well. People who are wage earners are not doing so well. Both of those things are true, while simultaneously the GDP could be growing. So, I don’t think there are the answers we would like, which I know is not nearly as satisfying as if I could come up with the perfect other number that would then answer that question. But I think that's a dream world rather than the real world.
By John Cookson
Fareed’s ‘Book of the Week’ is Angela Stent's The Limits of Partnership: U.S.-Russian Relations in the Twenty-First Century. Stent is the director of the Center for Eurasian, Russian & East European Studies at Georgetown University. GPS's John Cookson spoke with her about the ongoing crisis in Crimea and the numerous attempts to reset relations between the United States and Russia.
You say in the book that there has been far more continuity in Russia policy since the end of the Cold War than many would publicly admit. Why is that?
We obviously like in our system to think that there’s a big difference between Republicans and Democrats, but the issue with Russia is that the presidential inbox has remained largely the same for the last twenty-two years. In the book, I go into six sets of issues with which we’ve constantly had to deal with the Russians, starting off with the nuclear legacy, with the proliferation of weapons of mass destruction, disagreements with Russia over the post-Soviet space (which is obviously very much on display today in Ukraine), the question of Euro-Atlantic security architecture (NATO and EU enlargement and the Russian response to that), then domestic Russian politics and more recently with all the upheaval in the Arab world.
These have been constant problems. Sometimes the approaches have varied a little bit, obviously. In the George W. Bush administration the arms control issues were downplayed, and in the Obama administration they were more important. But in general, many of these issues, including Iran which has been a constant for the past 22 years, haven’t really changed. Most of the people that I interviewed for the book – officials who were in the Clinton, Bush and Obama administrations – admit the same thing, that there really isn’t that much difference.
By John Cookson
Fareed’s ‘Book of the Week’ is Paul Brinkley's War Front to Store Front. Brinkley was the Pentagon official tasked with getting capitalism going in Iraq and Afghanistan. GPS's John Cookson spoke with Brinkley this week about his experiences, Afghanistan’s economic potential and the prospects for stability after the U.S. withdraws from the country this year.
Much of the focus in recent weeks has been on the politics of Afghanistan and on comments by President Hamid Karzai. But you say economics is the underlying issue for the country. What did you learn about Afghanistan’s economy during your time there?
We launched the mission in 2009, seven years after the Taliban had been deposed. We entered Afghanistan at the request of both the command and the embassy in Afghanistan to provide, to build and to understand what was possible economically. What was shocking about that was there was so much potential. But seven years into the conflict it was late to get started. The two areas we were most aggressively pursuing were resource development – both minerals and oil and gas – as well as agriculture.
Oil and gas and minerals had received no attention at all. And agriculture had basically been limited to provision of fertilizers and seeds, but no improvements in technologies, no improvements in yields, no effort to open markets and connect Afghan agribusinesses to international supply chains. So we immersed ourselves and launched an entire effort there to build a basis of economic stability for the country that you could then rest institutions on.
Here is a list of the books Fareed has recommended over the course of the GPS show. Stock up your library.
|7/13/14||The Universe edited by John Brockman|
|7/6/14||Lost for Words by Edward St. Aubyn|
|6/29/14||The Director by David Ignatius|
|6/22/14||Good Hunting: An American Spymaster's Story by Jack Devine with Vernon Loeb|
|6/15/14||The Forever War by Dexter Filkins|
|6/8/14||Age of Ambition: Chasing Fortune, Truth, and Faith in the New China by Evan Osnos|
|6/1/14||Maximalist by Stephen Sestanovich|
|5/25/14||The Mantle of Command: FDR at War, 1941-1942 by Nigel Hamilton|
|5/18/14||Stress Test by Timothy Geithner|
|5/11/14||The Fourth Revolution by John Micklethwait & Adrian Wooldridge|
|5/4/14||Capital in the Twenty-First Century by Thomas Piketty|
|4/27/14||The Rule of Nobody by Philip K. Howard|
|4/20/14||The Story of the Jews by Simon Schama|
|4/13/14||Bloodlands: Europe Between Hitler and Stalin by Timothy Snyder|
|4/6/14||The Confidence Trap by David Runciman|
|3/30/14||Particle Fever from Anthos Media|
|3/23/14||Stringer by Anjan Sundaram|
The Leading Indicators by Zachary Karabell
|3/9/14||The Limits of Partnership by Angela Stent|
|3/2/14||The Up Side of Down by Megan McArdle|
|2/23/14||The Steps Across the Water by Adam Gopnik|
War Front to Store Front by Paul Brinkley
|2/9/14||The Second Machine Age by Erik Brynjolfsson and Andrew McAfee|
Silicon Valley from PBS
Amsterdam by Russell Shorto
India Grows at Night by Gurcharan Das
If Mayors Ruled the World by Benjamin Barber
The Kennan Diaries by George Kennan,
edited by Frank Costigliola
The Great War by Mark Holborn and Hilary Roberts
Reimagining India edited by McKinsey & Company
|12/08/13||My Promised Land: The Triumph and Tragedy of Israel by Ari Shavit|
|12/01/13||Islam without Extremes by Mustafa Akyol|
|11/17/13||The Man He Became: How FDR Defied Polio to Win the Presidencyby James Tobin|
|11/10/13||The Atlantic's Technology IssueNovember 2013 edition|
|11/03/13||If Kennedy Lived by Jeff Greenfield|
|10/27/13||Forgotten Ally: China's World War II, 1937-1945 by Rana Mitter|
|10/20/13||The Tea Party and the Remaking of Republican Conservatism by Theda Skocpol and Vanessa Williamson|
|10/13/13||It's Even Worse Than It Looks by Thomas Mann and Norman Ornstein|
|10/6/13||David and Goliath by Malcolm Gladwell|
|09/29/13||Unthinkable by Kenneth Pollack|
|09/22/13||Innocent Abroadby Martin Indyk|
|09/15/13||A Peace to End All Peaceby David Fromkin|
|09/08/13||The Age of Edison by Ernest Freeberg|
|09/01/13||Harvesting the Biosphere by Vaclav Smil|
|08/25/13||Wealth and Power: China's Long March to the Twenty-first Century by Orville Schell and John Delury; The Sleepwalkers: How Europe Went to War in 1914 by Christopher Clark|
|08/18/13||Scoop by Evelyn Waugh|
|08/11/13||Franklin Delano Roosevelt: Champion of Freedomby Conrad Black|
|08/04/13||This Town by Mark Leibovich|
|07/28/13||Wealth and Power: China's Long March to the Twenty-first Century by Orville Schell and John Delury|
|07/21/13||Museums Matter by James Cuno|
|07/14/13||The Metropolitan Revolution by Bruce Katz and Jennifer Bradley|
|07/07/13||The Idea of America by Gordon Wood|
|06/30/13||Sleepless in Hollywood by Lynda Obst|
|06/23/13||Talibanistan by Peter Bergen|
|06/16/13||Presidential Leadership and the Creation of the American Era by Joseph Nye|
|06/09/13||Strange Rebels by Christian Caryl|
|06/02/13||Strange Stones by Peter Hessler|
|05/26/13||The Annals of Unsolved Crime by Edward Jay Epstein|
|05/19/13||Return of a King by William Dalrymple|
|05/05/13||Foreign Policy Begins at Home by Richard Haass|
|04/28/13||The New Digital Age by Eric Schmidt and Jared Cohen|
|04/21/13||The Way of the Knifeby Mark Mazzetti|
|04/14/13||The Sleepwalkers: How Europe Went to War in 1914 by Christopher Clark|
|04/07/13||This Explains Everything by John Brockman|
|03/31/13||The End of Power by Moises Naim|
|03/24/13||Catastrophic Care by David Goldhill|
|03/17/13||Double Entry by Jane Gleeson-White|
|03/10/13||China Goes Global: The Partial Power by David Shambaugh|
|03/03/13||Lee Kuan Yew: The Grand Master's Insightsby Graham Allison & Robert Blackwill|
|02/24/13||Here's the Dealby David Leonhardt|
|02/17/13||Engineers of Victory by Paul Kennedy|
|02/10/13||Invisible Armies: An Epic History of Guerilla Warfareby Max Boot|
|02/03/13||After the Music Stopped by Alan Blinder|
|01/27/13||The Idea Factory: Bells Labs and the Great Age of American Innovation by Jon Gertner|
|01/13/13||Why Romney Lost by David Frum|
|01/06/13||Foreign Affairs January/February 2013 edition|
|12/23/12||The Future of Freedom by Fareed Zakaria, The Post-American World by Fareed Zakaria|
|12/09/12||Red Ink: Inside the High-Stakes Politics of the Federal Budgetby David Wessel|
|12/02/12||Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb|
|11/25/12||Thomas Jefferson: The Art of Power by Jon Meacham|
|11/18/12||A Nation of Takers by Nicholas Eberstadt|
|11/11/12||The Revenge of Geography by Robert Kaplan|
|11/04/12||Iron Curtain: The Crushing of Eastern Europe by Anne Applebaum|
|10/28/12||Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else by Chrystia Freeland|
|10/21/12||The Signal and the Noise: Why So Many Predictions Fail, but Some Don't by Nate Silver|
|10/14/12||The New New Deal: The Hidden Story of Change in the Obama Eraby Michael Grunwald|
|10/07/12||The Parties Versus The People by Mickey Edwards|
|09/30/12||The Oath: the Obama White House and the Supreme Court by Jeffrey Toobin|
|09/23/12||The Future of Freedom by Fareed Zakaria|
|09/16/12||This Republic of Suffering: Death and the American Civil Warby Drew Faust|
|09/09/12||Interventions: A Life in War and Peace by Kofi Annan|
|09/02/12||Connectome: How the Brain's Wiring Makes Us Who We Areby Sebastian Seung|
|08/26/12||Einstein: His Life And Universe by Walter Isaacson|
|08/05/12||The Book of Joe by Jonathan Tropper|
|07/29/12||The Righteous Mind: Why Good People Are Divided by Politics and Religion by Jonathan Haidt|
|07/22/12||The Sense of an Ending by Julian Barnes|
|07/15/12||The Tell-Tale Brain by V.S. Ramachandran|
|07/08/12||Adapt by Tim Harford, Franklin and Winston, an Intimate Portrait of an Epic Friendship by John Meacham, The Making of the President 1960 by Theodore White, The Increment, by David Ignatius, and The Post-American World: Release 2.0 by Fareed Zakaria|
|07/01/12||Land of Promise: An Economic History of the United States by Michael Lind|
|06/24/12||Fate of the Species by Fred Guterl|
|06/17/12||The Dictator's Learning Curve by William Dobson|
|06/10/12||Adapt by Tim Harford|
|06/03/12||The Wise Men by Walter Isaacson|
|05/27/12||China Airborne by James Fallows|
|05/20/12||The Post-American World, 2.0 by Fareed Zakaria|
|05/13/12||The Crisis of Zionism by Peter Beinart|
|05/06/12||The Passage of Power by Robert Caro|
|04/29/12||End This Depression Now by Paul Krugman
|04/22/12||Power of Habit by Charles Duhigg
|04/15/12||George F. Kennan: An American Life by John Lewis Gaddis|
|04/08/12||Breakout Nations by Ruchir Sharma|
|04/01/12||Franklin and Winston, An Intimate Portrait of An Epic Friendship by Jon Meacham|
|03/25/12||Paper Promises: Debt, Money, and the New World Order by Philip Coggan|
|03/18/12||Republic Lost, How Money Corrupts Congress and A Plan to Stop It by Lawrence Lessig|
|03/11/12||The Benefit And The Burden, Tax Reform, Why We Need It And What It Will Take by Bruce Bartlett|
|03/04/12||The Making of the President 1960 by Theodore White|
|02/26/12||Behind The Beautiful Forevers byKatherine Boo|
|02/19/12||How to Win an Election by Quintus Tullius Cicero|
|02/12/12||Coming Apart by Charles Murray|
|02/05/12||The Unquiet American edited by Samantha Power and Derek Chollet|
|01/29/12||A Separation, Oscar nominated film FULL POST|
Looking for a good read this summer? On each episode, the "Fareed Zakaria GPS" show highlights a Book of the Week. Have you missed any? Then catch up on these past five recommendations and tell us what you would recommend in the comments below.
"Land of Promise: An Economic History of the United States." Author Michael Lind, one of the founders of the New America Foundation, gives a revealing history of the American economy, emphasizing the crucial role that the state has played in making America an economic superpower. It will unsettle many of your cherished beliefs.
"Fate of the Species." In elegant, compelling prose, Fred Guterl, who is one of the great science journalists of today, lays out the megachallenges we confront - super viruses, climate change, disappearing species.
Shortly after eleven o’clock on the night of May 1st, two MH-60 Black Hawk helicopters lifted off from Jalalabad Air Field, in eastern Afghanistan, and embarked on a covert mission into Pakistan to kill Osama bin Laden. Inside the aircraft were twenty-three Navy SEALs from Team Six, which is officially known as the Naval Special Warfare Development Group, or DEVGRU. A Pakistani-American translator, whom I will call Ahmed, and a dog named Cairo—a Belgian Malinois—were also aboard. It was a moonless evening, and the helicopters’ pilots, wearing night-vision goggles, flew without lights over mountains that straddle the border with Pakistan. Radio communications were kept to a minimum, and an eerie calm settled inside the aircraft. FULL POST
This week's "Book of the Week" is Peter Godwin's The Fear.
It's a beautifully written, harrowing account of the ruin of a country.
The country is Zimbabwe, formerly Rhodesia, where Godwin was born.
The year is 2008.
That's when the nation's long time tyrannical ruler Robert Mugabe lost an election and brutalized his nation as punishment.
Here's the blurb for the book:
Looking for the perfect Father's Day gift?
How about a book that can put today's rapidly changing world in lucid perspective?
Fareed's updated book, The Post-American World (Release 2.0), is the perfect gift for the intellectually curious father.
My book of the week was published three years ago, but - in a strikingly prescient way - foretold the January revolution here.
It's called "Inside Egypt: The Land of the Pharoahs on the Brink of a Revolution" and it was written by John R. Bradley.
The book was banned by the Mubarak's regime - and understandably so! If you want to understand how Egypt got to this crossroads, read this book.
My book of the week is former U.S. Secretary of State Henry Kissinger's latest, On China. This is a must read.
Part history, part memoir of Kissinger's extensive dealings with Chinese leaders over 40 years and part analysis, this is a major work.
That Henry Kissinger could write such an ambitious book at the age of 87 is just extraordinary.
My book suggestion this week is Katie Couric's The Best Advice I Ever Got, featuring life lessons from everyone from Mike Bloomberg to Donald Trump, from Jimmy Carter to Bill Clinton and from Melinda Gates to Martha Stewart.
There is a chapter by yours truly.
The best part is the proceeds from this book help send worthy kids to college.
This week's book of the week is Innovation Nation: How America is losing its innovation edge, why it matters, and what we can do to get it back by John Kao. From Publisher's Weekly:
"Alarmed by the lack of innovation in the United States today, former Harvard Business School professor and current consultant Kao diagnoses the situation, describes best practices, explains how innovation works and puts forth a strategy proposal, all in an attempt to squirt ice water in America's ear.
Kao - who has been an entrepreneur, a psychiatrist, an educator and a pianist for Frank Zappa - is clearly passionate about his premise. Aimed primarily at policy makers and legislators, his three-pronged agenda is designed to help the government create a culture committed to constantly reinventing the nature of its innovation capabilities."
I'll have a special on innovation on GPS in June.