Hard Choices is Hilary Clinton's memoir of her time as the Secretary of State for the USA. It's a long book --- I started listening to it on the train during the Tour of the Alps, and it took the better part of several months of listening before I finished.
Rather than being a strict chronological account of her time as Secretary of State (SoS), the book's divided into sections geographically first, and then at the end based on themes regarding the future of human rights. The choice of geographical partition allowed Clinton to highlight what she thought were important themes during her tenure (e.g., the pivot to Asia), but also served to reduce what seemed to be a particularly hectic time into much more than a frenetic series of activities.
International diplomacy is a strange affair for those of us not particularly interested. In particular, the US has an outsized influence mostly because of its wealth and military prowess. Yet under certain administrations, the State Department tries very much not to appear as though it's twisting arms. I was amused by Clinton's account of how the State Department maneuvered around China's claims of sections of the South China seas: while China would rather do one-on-one negotiations with each of the smaller countries, the US would try to organize negotiations as a group at regional meetings like at ASEAN so that the smaller countries (with US backing) could feel like they could all stand up together against China.
If you enjoy the back-story of various such diplomatic shenanigans, you'll enjoy the book, as there were many descriptions of such back-room arm twisting (such as during the Israeli-Palestinian rocket assaults, as well as sections of the Arab Spring). What comes through is that Clinton tries to sell really hard that (1) diplomacy is much cheaper than military action, and the State Department is massively under-funded and under-staffed, and (2) the US (at least, under Obama) did try to promote human rights throughout the world, even when it has to deal with foreign leaders who aren't as enthusiastic about such rights.
(1) is a slam dunk. It's very clear that when the State department succeeds in achieving US goals without force, it's a huge cost savings. The times when they failed and the U.S. military gets pulled in, it's almost always going to cost more in both lives and money. (2) however gets subject to cynicism. However, Clinton does do a decent job of explaining that whenever the US comes in to help save lives or perform emergency rescue operations, its image in the target country improves significantly (at one point, Japan had an 80% approval rating of the US after the Tsunami aid efforts, up from 60%, which is huge). So the 1% of the federal budget that goes into foreign aid is very good value.
There's also a good explanation for both Clinton's and Obama's support for the TPP, which has been much maligned during the recent election: fundamentally, US diplomacy holds out access to US markets in exchange for nudging other countries towards US policy. Once countries have a taste for the wealth access to US markets can bring, they're much more likely to toe the line when Washington comes calling. It makes sense, but of course, the US is unique in having next to no safety nets for workers displaced by such strategic considerations --- it seems to me that if something like the TPP is an important part of international diplomacy (and the US really does need to pay attention to such diplomacy --- imagine a world in which China dominated South East Asia!), then spending more on social safety nets makes more sense in tandem with something like the TPP than just shoving it down the public's throat, which has not gone over well and probably will never go over well, as recent events illustrate.
Finally, as someone who's an engineer, it was a bit jarring for me to hear Clinton praise someone as being a "great Politician." It's funny since engineers view politicians as people who're great at promoting themselves without actually doing any work, but of course, when you're a career politician, being a good politician would be high praise. Judging by the results of the election earlier this month, most Americans agree with my attitude than with Clinton's.
The book's a bit of a long slog, but I learned quite a bit. It's not my book of the year by any means, but it's still worth your time.
Showing posts with label politics. Show all posts
Showing posts with label politics. Show all posts
Tuesday, November 15, 2016
Thursday, October 29, 2015
Review: A Spy Among Friends: Kim Philby and the Great Betrayal
Truth is stranger and more interesting than fiction. Nowhere else is it more (and better) illustrated than in this book, A Spy Among Friends. While I've never been able to make it past the first couple of chapters of Le Carre's Tinker Tailor Soldier Spy, I picked up this book and could not put it down until I finished it a day later. I abandoned all my other books, and even stopped playing Arkham Knight, which is as eminently playable (and addictive) a video game as I've encountered since Sleeping Dogs.
The book is about Kim Philby, probably the most successful spy of modern times. Infiltrating M.I.6 before World War 2, he became a well-regarded agent, and repeatedly promoted up the ranks until he became M.I.6's liaison with the CIA in Washington, and at one point was tipped to become the head of M.I.6! His contacts and betrayal of both secret services led to internal purges and damaged the trust between M.I.6, M.I.5, the CIA, and FBI, not to mention sending multiple agents into awaiting Russian Troops and counter-intelligence officers. While doing so, Philby managed to collect the OBE.
This all in itself would make an exciting story (though one you would have mostly read about in books such as Declare, or Tinker Tailor Soldier Spy). But Ben Macintyre places everything in context accurately, and is not afraid to draw conclusions and read between the lines of various memoirs, providing accurate quotes that back up his analysis.
We get a good understanding of how Philby was undetected for so long. Fundamentally, the old boys network worked in such a way that no one thought to consider someone who was so obviously English in upbringing and background could be a mole. At every point in Philby's indoctrination into the secret service, for instance, the only background checks were: "Do you know his family?"
Even worse, when evidence that Philby was a Soviet agent emerged (after two already-known spies defected without being apprehended by M.I.6 because of being tipped off by Philby), M.I.6's "young turks" (the group of agents with World War 2 experience who had been promoted into being section chiefs) closed ranks and defended Philby, with nobody slapping surveillance on him. Sure, Philby was ejected from the service for a time, but then later re-hired into Beirut by one of his old friends, Nicholas Elliott. In fact, when Philby was finally unmasked by evidence, Elliot volunteered to interrogate him, and deliberately left the door open so that Philby could escape to the Soviet Union. Macintyre suggests that this was deliberate, in order to avoid an embarrassing public trial in the UK demonstrating the incompetence of M.I.6 and discrediting the old boy's network, and reviewing the evidence that he provides, this does appear to be the case.
More than Philby's story, however, we get several little titbits here and there that loom larger than life. That scene in James Bond where James Bond arrives in a wet suit, strips it off and has a tuxedo underneath? That's real. (Ian Fleming did work for M.I.6 at some point) The high risks, high stakes missions? Those were a product of World War 2's influence on the Young Turks, where their successes made them feel like they could do no wrong, bypass controls and checks, and launch operations (many of which were exposed by Philby to the Russians) would backfire and fail repeatedly on larger and larger scales. Unlike Bond, however, these operations were never successful because the opponents knew what M.I.6 wanted to do and could prepare for their agents to arrive.
Reading this book makes you understand several things:
The book is about Kim Philby, probably the most successful spy of modern times. Infiltrating M.I.6 before World War 2, he became a well-regarded agent, and repeatedly promoted up the ranks until he became M.I.6's liaison with the CIA in Washington, and at one point was tipped to become the head of M.I.6! His contacts and betrayal of both secret services led to internal purges and damaged the trust between M.I.6, M.I.5, the CIA, and FBI, not to mention sending multiple agents into awaiting Russian Troops and counter-intelligence officers. While doing so, Philby managed to collect the OBE.
This all in itself would make an exciting story (though one you would have mostly read about in books such as Declare, or Tinker Tailor Soldier Spy). But Ben Macintyre places everything in context accurately, and is not afraid to draw conclusions and read between the lines of various memoirs, providing accurate quotes that back up his analysis.
We get a good understanding of how Philby was undetected for so long. Fundamentally, the old boys network worked in such a way that no one thought to consider someone who was so obviously English in upbringing and background could be a mole. At every point in Philby's indoctrination into the secret service, for instance, the only background checks were: "Do you know his family?"
Even worse, when evidence that Philby was a Soviet agent emerged (after two already-known spies defected without being apprehended by M.I.6 because of being tipped off by Philby), M.I.6's "young turks" (the group of agents with World War 2 experience who had been promoted into being section chiefs) closed ranks and defended Philby, with nobody slapping surveillance on him. Sure, Philby was ejected from the service for a time, but then later re-hired into Beirut by one of his old friends, Nicholas Elliott. In fact, when Philby was finally unmasked by evidence, Elliot volunteered to interrogate him, and deliberately left the door open so that Philby could escape to the Soviet Union. Macintyre suggests that this was deliberate, in order to avoid an embarrassing public trial in the UK demonstrating the incompetence of M.I.6 and discrediting the old boy's network, and reviewing the evidence that he provides, this does appear to be the case.
More than Philby's story, however, we get several little titbits here and there that loom larger than life. That scene in James Bond where James Bond arrives in a wet suit, strips it off and has a tuxedo underneath? That's real. (Ian Fleming did work for M.I.6 at some point) The high risks, high stakes missions? Those were a product of World War 2's influence on the Young Turks, where their successes made them feel like they could do no wrong, bypass controls and checks, and launch operations (many of which were exposed by Philby to the Russians) would backfire and fail repeatedly on larger and larger scales. Unlike Bond, however, these operations were never successful because the opponents knew what M.I.6 wanted to do and could prepare for their agents to arrive.
Reading this book makes you understand several things:
- The glamorous James Bond and spy novels (even Le Carre's), have done an excellent job of white washing how incompetent M.I.6 and the CIA actually are. Repeated operational failures did not alert them to the possibility that their internal security was compromised. Until I read this book, I had no idea how badly run the agencies were, and how at every level at every agency employees resisted the idea that someone as charming as Philby could have been a double agent.
- The old boys club approach to intelligence was a massive failure. Not only did it mean that people were recruited without extensive background checks, it also meant that once you were in, you had a clique of fellow agents who were so homogeneous that they would naturally blab to each other about everything, which effectively meant that even a single mole could do a huge amount of damage to the organization.
- Not having effective oversight of intelligence agencies mean that even when mistakes are made, the spies themselves will lie or dissemble or even resort to giving high level double agents to the enemy in order to protect themselves and their organization. People who lie for a living are unlikely to give up the habit just because they've been discovered to have been wrong. That makes spying and intelligent agencies suspect. In fact, at one point Macintyre quotes an intelligence officer making the assessment that all operations in the 40s, 50s, and 60s, were in fact in the negative: M.I.6's cadre could have all sat on their collective bottoms and they would have been more effective!
All in all, this was an excellent read and very much worth your time. It'll also save you a ton of time from not having to read (or watch an adaptation of) John Le Carre. So grab it and dig in.
Thursday, August 28, 2014
Review: Capital in the Twenty-First Century
Capital in the Twenty-First Century is Thomas Piketty's magnum opus about the future of capitalism and the implications thereof. It is by far and away the best book I've read this year, and I doubt if I'll read a better book in this decade. It's a combination of economics, political economy, history, literature analysis (of Jane Austen and Honore Balzac no less) and big-data analysis that had me getting up early to read it. In my younger days, I would have devoured this book non-stop in a matter of days, ignoring food, sleep, and work. It is more exciting than any combination of science fiction novels, and in many ways fulfills the idea of economics as psychohistory.
The central premise of the book is the inequality r > g. Through human history, while growth rates have usually been around 1%, the return on capital has usually been around 5% (in real terms, not nominal terms). You might question this 5% number as contradicting Bernstein's 2% number. Note that Bernstein's numbers includes major catastrophes, such as the world wars wiping out most assets in Europe. From a personal finance point of view, such events usually mean that you care a lot more about staying alive than your portfolio! The implications on wealth accumulation is fairly straightforward: if you can accumulate capital such that you can live on less than 5% over a long period of time, you can reinvest the remainder of your capital income and grow well above the growth rate of the economy, leaving you not only with increasing assets, but also freeing you and your heirs from ever having to work for an income ever again. In the extreme case (let's say you're Bill Gates), you can live on 0.01% of your income from capital and essentially reinvest all the proceeds, creating dynastic level wealth. The Hiltons, Kennedys, Rockefellers, and Kochs are of course in this category.
Wait a minute, you say, isn't the world GDP growth more than 3%? Isn't China growing at 7-8%? This is where historical data comes in. Piketty provides convincing evidence that these numbers can only occur because of (1) population growth, and (2) catchup with the modern economies. In other words, Europe could only grow at 6-8% a year until it caught up with the USA at the frontier of technology and infrastructure, at which point it devolved down to 1-1.5% growth. The same happened to Japan, and will happen to China. It's reasonable to expect the world to degenerate to that case eventually, but the developed world is already there.
Even more impressively, Piketty has current data. This data in particular, shows that the top 1% in Europe and USA already own more than 70% of the capital assets in their respective economic arenas. Even worse, there's reasonable evidence that because of the existence of tax havens, these estimates are low. Piketty analyzes total capital known to be in existence, and reveals that the world owes more money than exists in developed country accounts. The remainder of the dark capital exists in tax havens and is likely to be around 10% of global wealth.
How bad can things get? Here, Piketty turns to history for data and to literature to make it real. This section of the book is impressive and amazing to read. During the Gilded Age (called Belle Epoque in the book), the wealthy commanded 90% of the capital in their respective countries. Fully half of the population (then and now) owned essentially nothing or had a negative net-worth, and there was no middle class. There was effectively no inflation, which explained why Austen and Balzac would provide numbers in terms of income for the characters in their novels and expect readers to understand what situations each character was in. Worse, there was no way for anyone to get ahead by hard work or education: even judges could at most make 5 to 7 times the average income, compared to the wealthy heirs and heiresses who would have 30 to 60 times the average income from the capital they inherited. Hence, the plots of those novels always involved marrying someone so wealthy that they could provide a dignified existence (meaning that they could hire enough servants to take care of the needs of daily living, given the non-existence of refrigeration, cars, etc).
Lest you think that this state of affairs could only occur because of a stagnant technology, Piketty reminds the reader that automobiles, steam engines, etc. were all invented during this period. It was hardly a period of stagnation. Yet because all new technology required capital, the inventors didn't make off with the lion's share of the profits.
So how did the situation change? Was it the progressive income tax? Was it the introduction of inflation? The answer was that it took 2 world wars to essentially destroy most of the existing capital stock in Europe in order for a more egalitarian post-war generation to exist. This essentially created a middle class that owned about 40% of the wealth and consisted of 40% of the population. 50% of the population continued to own no property, while the top 10% owns 60% of the wealth. In the U.S., punitive taxation levels of 90% kept inequality low, essentially keeping the American middle class from suffering the same fate. Piketty points out that the 90% tax rate was hardly ever paid. Instead, what it did was to keep executives (who essentially set their own pay) from asking for compensation at that level. When those tax rates were dismantled in the 1980s, CEO and other executive compensation sky-rocketed in response.
So how does the world look going forward? It looks grim. We are currently in a situation where in the US and Europe, capital from inheritances and capital from savings through work average about 50%. By 2050, if things don't change, we could easily see a return to inequality levels seen during the Gilded Age: most high net-worth households will be those who are inherited, and once again, your path to success would lie mostly in marrying rich rather than hard work and entrepreneurship. The dystopia of Blade Runner or Elysium never looked more likely than through Piketty's statistics. To balance that out a bit, Piketty points out that the European and US welfare states do cushion the blow somewhat: elderly poverty is down substantially since social security was introduced, and the European safety nets are even more generous. Of course, there's no shortage of the usual suspects wanting to tear that down...
Is there any possibility of change? Piketty proposes a global tax on capital, essentially a wealth tax. This is by far the most disappointing section of the book, not because such an idea wouldn't work, but because the political climate just wouldn't allow it. Furthermore, he works in lots of other issues that have very little with inequality and other topics covered by the book. For instance, he covers ways to pay down the national debts of various countries with a one-time exceptional tax. Since Piketty is French, he spends a lot of time discussing the Euro and the need for Eurozone cooperation and sanctions against tax havens, which is an international problem.
But seriously, that's a small nit on the book. I haven't even covered many of the side-topics that Piketty covers in the book. For instance, there's a huge discussion of slavery in the US in the antebellum South. This was a tour de force, as Piketty shows how much wealth slaveholders had: essentially, the northern US states were poor compared with old Europe, but the southern US states were wealthier, and of course, with a correspondingly higher wealth inequality. There cannot be more impoverishment than the inability to own even your own labor, and Piketty's statistics and graphs show the benefit of being on the other side of that equation in stark relief.
Piketty also discusses the American education system in contrast with the European systems, and how elite American colleges perpetuate the inequality that already exist in society: the majority of their incoming students come from the top quartile of society. He does point out the advantages of charging insanely high tuition, so you do get something for your money. Nevertheless, this goes a long way towards understanding why elite American colleges' acceptance tests seem very similar to the old-school European finishing school, complete with piano-playing and other tests of altruism and "leadership." They essentially have not drifted too far from those original prototypical elite institutions.
Finally, is there anything practical you can learn about personal finance in this economics book? The answer is yes. The first of which is that real-estate is a mug's game. Today's real-estate yields about 3-4%. Why so low when all other capital earns 4-5% real returns? The answer: real-estate is the only capital today subject to Piketty's wealth-tax. That wealth tax seems small: 1-1.5% of property value per year. But since it's levied every year, it imposes a drag on performance that's much higher than the capital gains tax, which are the subject of inter-state competition and hence tends towards zero over the long term. Piketty points out that the higher up the wealth ladder you go, the lower the proportion of real estate owned in the portfolio because of these characteristics. In other words, it's better to be equity-heavy and house poor than equity-light and house rich. The other lessons are fairly obvious: you want to have the lowest costs possible (both in investment costs and living expenses) so that your capital has the highest chance to compound. The bigger your portfolio, the faster the money will grow: Piketty points out that there's no difference in performance between Bill Gate's portfolio and Liliane Bettencourt's portfolio, even though one was a brilliant entrepreneur and the other is the heiress of the L'Oreal fortune. Capital is indifferent as to how you came by it. Furthermore, the largest portfolios grow the fastest. The elite university endowments for instance, grow at 8-10% a year, since once you get past a certain size you can take advantage not only of relatively expensive wealth managers through economies of scale, but you also have the ability to buy illiquid assets that cannot be easily sold and hence command a risk premium.
In the writing of this review, my biggest fear is that I haven't convinced you that you must read this book. Not only does it give you tools with which to analyze the world (and Jane Austen's novels --- you might even be able to avoid having to read them at all, since Piketty does such a great job of picking out the essentials), it also gives you the context of why we are still feeling the effects of world war 2, 70 years after the event.
Highly recommended. Pay whatever price you have to, ignore whatever pressing assignments you have to, read this book. It is that good, and whether or not you disagree with the politics, there's plenty in here for you to exercise your intellectual muscle on. Go to it.
The central premise of the book is the inequality r > g. Through human history, while growth rates have usually been around 1%, the return on capital has usually been around 5% (in real terms, not nominal terms). You might question this 5% number as contradicting Bernstein's 2% number. Note that Bernstein's numbers includes major catastrophes, such as the world wars wiping out most assets in Europe. From a personal finance point of view, such events usually mean that you care a lot more about staying alive than your portfolio! The implications on wealth accumulation is fairly straightforward: if you can accumulate capital such that you can live on less than 5% over a long period of time, you can reinvest the remainder of your capital income and grow well above the growth rate of the economy, leaving you not only with increasing assets, but also freeing you and your heirs from ever having to work for an income ever again. In the extreme case (let's say you're Bill Gates), you can live on 0.01% of your income from capital and essentially reinvest all the proceeds, creating dynastic level wealth. The Hiltons, Kennedys, Rockefellers, and Kochs are of course in this category.
Wait a minute, you say, isn't the world GDP growth more than 3%? Isn't China growing at 7-8%? This is where historical data comes in. Piketty provides convincing evidence that these numbers can only occur because of (1) population growth, and (2) catchup with the modern economies. In other words, Europe could only grow at 6-8% a year until it caught up with the USA at the frontier of technology and infrastructure, at which point it devolved down to 1-1.5% growth. The same happened to Japan, and will happen to China. It's reasonable to expect the world to degenerate to that case eventually, but the developed world is already there.
Even more impressively, Piketty has current data. This data in particular, shows that the top 1% in Europe and USA already own more than 70% of the capital assets in their respective economic arenas. Even worse, there's reasonable evidence that because of the existence of tax havens, these estimates are low. Piketty analyzes total capital known to be in existence, and reveals that the world owes more money than exists in developed country accounts. The remainder of the dark capital exists in tax havens and is likely to be around 10% of global wealth.
How bad can things get? Here, Piketty turns to history for data and to literature to make it real. This section of the book is impressive and amazing to read. During the Gilded Age (called Belle Epoque in the book), the wealthy commanded 90% of the capital in their respective countries. Fully half of the population (then and now) owned essentially nothing or had a negative net-worth, and there was no middle class. There was effectively no inflation, which explained why Austen and Balzac would provide numbers in terms of income for the characters in their novels and expect readers to understand what situations each character was in. Worse, there was no way for anyone to get ahead by hard work or education: even judges could at most make 5 to 7 times the average income, compared to the wealthy heirs and heiresses who would have 30 to 60 times the average income from the capital they inherited. Hence, the plots of those novels always involved marrying someone so wealthy that they could provide a dignified existence (meaning that they could hire enough servants to take care of the needs of daily living, given the non-existence of refrigeration, cars, etc).
Lest you think that this state of affairs could only occur because of a stagnant technology, Piketty reminds the reader that automobiles, steam engines, etc. were all invented during this period. It was hardly a period of stagnation. Yet because all new technology required capital, the inventors didn't make off with the lion's share of the profits.
So how did the situation change? Was it the progressive income tax? Was it the introduction of inflation? The answer was that it took 2 world wars to essentially destroy most of the existing capital stock in Europe in order for a more egalitarian post-war generation to exist. This essentially created a middle class that owned about 40% of the wealth and consisted of 40% of the population. 50% of the population continued to own no property, while the top 10% owns 60% of the wealth. In the U.S., punitive taxation levels of 90% kept inequality low, essentially keeping the American middle class from suffering the same fate. Piketty points out that the 90% tax rate was hardly ever paid. Instead, what it did was to keep executives (who essentially set their own pay) from asking for compensation at that level. When those tax rates were dismantled in the 1980s, CEO and other executive compensation sky-rocketed in response.
So how does the world look going forward? It looks grim. We are currently in a situation where in the US and Europe, capital from inheritances and capital from savings through work average about 50%. By 2050, if things don't change, we could easily see a return to inequality levels seen during the Gilded Age: most high net-worth households will be those who are inherited, and once again, your path to success would lie mostly in marrying rich rather than hard work and entrepreneurship. The dystopia of Blade Runner or Elysium never looked more likely than through Piketty's statistics. To balance that out a bit, Piketty points out that the European and US welfare states do cushion the blow somewhat: elderly poverty is down substantially since social security was introduced, and the European safety nets are even more generous. Of course, there's no shortage of the usual suspects wanting to tear that down...
Is there any possibility of change? Piketty proposes a global tax on capital, essentially a wealth tax. This is by far the most disappointing section of the book, not because such an idea wouldn't work, but because the political climate just wouldn't allow it. Furthermore, he works in lots of other issues that have very little with inequality and other topics covered by the book. For instance, he covers ways to pay down the national debts of various countries with a one-time exceptional tax. Since Piketty is French, he spends a lot of time discussing the Euro and the need for Eurozone cooperation and sanctions against tax havens, which is an international problem.
But seriously, that's a small nit on the book. I haven't even covered many of the side-topics that Piketty covers in the book. For instance, there's a huge discussion of slavery in the US in the antebellum South. This was a tour de force, as Piketty shows how much wealth slaveholders had: essentially, the northern US states were poor compared with old Europe, but the southern US states were wealthier, and of course, with a correspondingly higher wealth inequality. There cannot be more impoverishment than the inability to own even your own labor, and Piketty's statistics and graphs show the benefit of being on the other side of that equation in stark relief.
Piketty also discusses the American education system in contrast with the European systems, and how elite American colleges perpetuate the inequality that already exist in society: the majority of their incoming students come from the top quartile of society. He does point out the advantages of charging insanely high tuition, so you do get something for your money. Nevertheless, this goes a long way towards understanding why elite American colleges' acceptance tests seem very similar to the old-school European finishing school, complete with piano-playing and other tests of altruism and "leadership." They essentially have not drifted too far from those original prototypical elite institutions.
Finally, is there anything practical you can learn about personal finance in this economics book? The answer is yes. The first of which is that real-estate is a mug's game. Today's real-estate yields about 3-4%. Why so low when all other capital earns 4-5% real returns? The answer: real-estate is the only capital today subject to Piketty's wealth-tax. That wealth tax seems small: 1-1.5% of property value per year. But since it's levied every year, it imposes a drag on performance that's much higher than the capital gains tax, which are the subject of inter-state competition and hence tends towards zero over the long term. Piketty points out that the higher up the wealth ladder you go, the lower the proportion of real estate owned in the portfolio because of these characteristics. In other words, it's better to be equity-heavy and house poor than equity-light and house rich. The other lessons are fairly obvious: you want to have the lowest costs possible (both in investment costs and living expenses) so that your capital has the highest chance to compound. The bigger your portfolio, the faster the money will grow: Piketty points out that there's no difference in performance between Bill Gate's portfolio and Liliane Bettencourt's portfolio, even though one was a brilliant entrepreneur and the other is the heiress of the L'Oreal fortune. Capital is indifferent as to how you came by it. Furthermore, the largest portfolios grow the fastest. The elite university endowments for instance, grow at 8-10% a year, since once you get past a certain size you can take advantage not only of relatively expensive wealth managers through economies of scale, but you also have the ability to buy illiquid assets that cannot be easily sold and hence command a risk premium.
In the writing of this review, my biggest fear is that I haven't convinced you that you must read this book. Not only does it give you tools with which to analyze the world (and Jane Austen's novels --- you might even be able to avoid having to read them at all, since Piketty does such a great job of picking out the essentials), it also gives you the context of why we are still feeling the effects of world war 2, 70 years after the event.
Highly recommended. Pay whatever price you have to, ignore whatever pressing assignments you have to, read this book. It is that good, and whether or not you disagree with the politics, there's plenty in here for you to exercise your intellectual muscle on. Go to it.
Thursday, June 19, 2014
Review: A Fighting Chance
A Fighting Chance is Elizabeth Warren's account of her life, from her humble beginnings to becoming a Harvard Professor and then United States Senator. The cynical would consider this the start of her bid for the 2016 presidential nomination, much like The Audacity of Hope was for Obama.
Here's the thing: I'm an unabashed Elizabeth Warren fan, ever since she wrote The Two Income Trap with her daughter. I would support her nomination for presidency, and I certainly think that she's a far better choice than Clinton would be, and I voted for Clinton during the primaries in 2008.
The book's well-written, as you would expect from a Harvard Professor. My wife, who doesn't usually read books that I checkout from the library, picked it up and kept reading despite herself. Warren is funny, self-deprecating, intelligent, and very good at writing for a general audience. For instance, she mentions how she won the home economics prize in high school, but leaves out the process she went through to get tenure. The latter would have been more interesting to me, but much less interesting for the general public.
The book also covers her work on the TARP oversight panel as well as all the hidden games that went on with the Consumer Financial Protection Bureau. These were by far the most interesting parts of the book to me, exposing how bank lobbyists succeed in getting what's good for the financial industry passed by congress again and again, while ignoring the needs of people who aren't as well heeled. She estimates the amount of money the banks spent opposing first the CFPB, and then scuttling her appointment as the director at well over $500M, or half a billion. If it is true that you can best judge a person by the qualities of her enemies, then Elizabeth Warren is truly one of the best people you'll find anywhere.
The last third of the book is about her own run for senate, and while interesting, it's all relatively recent news, so you might already know it. In any case, it is fun to relive that election especially with Todd Akin's "legitimate rape" shenanigans. I definitely hope the GOP keep up the good work on that front this November.
Anyway, it's a surprisingly fun read, well written, humble, and very much worth your time. Elizabeth Warren for president!
Here's the thing: I'm an unabashed Elizabeth Warren fan, ever since she wrote The Two Income Trap with her daughter. I would support her nomination for presidency, and I certainly think that she's a far better choice than Clinton would be, and I voted for Clinton during the primaries in 2008.
The book's well-written, as you would expect from a Harvard Professor. My wife, who doesn't usually read books that I checkout from the library, picked it up and kept reading despite herself. Warren is funny, self-deprecating, intelligent, and very good at writing for a general audience. For instance, she mentions how she won the home economics prize in high school, but leaves out the process she went through to get tenure. The latter would have been more interesting to me, but much less interesting for the general public.
The book also covers her work on the TARP oversight panel as well as all the hidden games that went on with the Consumer Financial Protection Bureau. These were by far the most interesting parts of the book to me, exposing how bank lobbyists succeed in getting what's good for the financial industry passed by congress again and again, while ignoring the needs of people who aren't as well heeled. She estimates the amount of money the banks spent opposing first the CFPB, and then scuttling her appointment as the director at well over $500M, or half a billion. If it is true that you can best judge a person by the qualities of her enemies, then Elizabeth Warren is truly one of the best people you'll find anywhere.
The last third of the book is about her own run for senate, and while interesting, it's all relatively recent news, so you might already know it. In any case, it is fun to relive that election especially with Todd Akin's "legitimate rape" shenanigans. I definitely hope the GOP keep up the good work on that front this November.
Anyway, it's a surprisingly fun read, well written, humble, and very much worth your time. Elizabeth Warren for president!
Thursday, May 01, 2014
Review: How to Win Friends and Influence People
How to Win Friends and Influence People is currently $2.99 on the Kindle store. I'd gotten this far in life without reading the book, but a friend of mine told me she used a technique from the book and it worked, though she felt slimy about it afterwards. That's intriguing enough to get me to buy and read the book.
This is a great book, as far as being an effective politician and getting what you want from people goes. Fundamentally, the book is all about helping you tell people what they want to hear, as opposed to what reality is. For example, in one anecdote, the manager of a singer who refused to get on stage simply lied to him over and over again until he did so. In another example, Dale encourages you not to tell people that they are wrong, but to pretend that you could be wrong and asking to check the facts. In certain circumstances, that could easily win you favors, sales, and deals. In other circumstances, it could make you look like an easy pushover and mark, and you will get out-maneuvered by more politically savvy folks, especially if you're an engineer. Dale Carnegie, however, doesn't tell you how to distinguish between those circumstances. For instance, if Galileo had read this book, he might easily have avoided the Roman inquisition. It would have done immense harm to the scientific enterprise, however, so I'm glad the world is not full of people who've read Dale Carnegie's book.
People occasionally ask me for advice on their careers. Given that I'm completely oblivious to office politics, I'm a bad person to ask. But I do refer them to books such as Career Warfare. It's quite clear to me that How to Win Friends and Influence People is also a great book to read if you want to succeed at a large company, where perception is much more important than reality. Keep in mind, however, that if you're an engineer, you're a much worse liar than anyone who's not an engineer, so some of these techniques absolutely will not work for you.
Highly Recommended.
This is a great book, as far as being an effective politician and getting what you want from people goes. Fundamentally, the book is all about helping you tell people what they want to hear, as opposed to what reality is. For example, in one anecdote, the manager of a singer who refused to get on stage simply lied to him over and over again until he did so. In another example, Dale encourages you not to tell people that they are wrong, but to pretend that you could be wrong and asking to check the facts. In certain circumstances, that could easily win you favors, sales, and deals. In other circumstances, it could make you look like an easy pushover and mark, and you will get out-maneuvered by more politically savvy folks, especially if you're an engineer. Dale Carnegie, however, doesn't tell you how to distinguish between those circumstances. For instance, if Galileo had read this book, he might easily have avoided the Roman inquisition. It would have done immense harm to the scientific enterprise, however, so I'm glad the world is not full of people who've read Dale Carnegie's book.
People occasionally ask me for advice on their careers. Given that I'm completely oblivious to office politics, I'm a bad person to ask. But I do refer them to books such as Career Warfare. It's quite clear to me that How to Win Friends and Influence People is also a great book to read if you want to succeed at a large company, where perception is much more important than reality. Keep in mind, however, that if you're an engineer, you're a much worse liar than anyone who's not an engineer, so some of these techniques absolutely will not work for you.
Highly Recommended.
Thursday, November 29, 2012
Review: No Easy Day
No Easy Day is Mark Owen's account of the mission that killed Osama bin ladin, and an autobiographical account of how he came to be on that mission.
What's most impressive about the book is the picture of the American military. They were under incredible constrains: for instance they had to take photos and provide documentary evidence of the combat site after the combat in order to satisfy lawyers and provide the government evidence that they did engage combatants rather than civilians. I know the Israeli army is under similar constraints, but I didn't expect the commando types to not only have to take out a target, but also document all the circumstances they did. In the book, Owen describes a colleague who quit when the documentary requirements for doing the job became too much as the locals learned the rules the US military operated under. For instance, insurgents would make sure that their weapons were stowed in a different place from where they slept, assured that if the Seals came to make an assault they would be considered non combatants and therefore spared to fight another day.
The amount of weight in body armor and gear is also incredible. Jumping out of a helicopter with 60 pounds of gear does sound really extreme. The constant training and fitness preparation does sound really daunting. Another thing that comes through is how much Owen (a pseudonym) loves his job. For instance, he could have joined the Navy as an officer, given that he had a college degree, but chose to enlist because it would provide him with more combat. He proudly boasts that he'd never had a desk job or been away from the front-lines: he was either training or deployed.
That's cool information about Seal Team 6, the amount of work that goes into preparing for the Neptune Spear mission, and the Obama-ordered mission itself, including maps of the compound they assaulted, and a detailed description of what happened. If you are a gun nut you will love the description of all the custom weaponry available to Seals and what the load out was.
The account of the assault was exciting, and it's interesting to read the Osama did not himself take up arms but was shot in action.
There's some politics in the book. The author was clearly not an Obama fan, and bragged that he probably secured Obama an election victory. In reality, the killing of Bin Laden was not a factor in the 2012 elections, having occurred too early in the campaign. On the other hand, the account was exciting and fun to read. The book's short --- I finished it in about 4 hours, so it's a suitable airplane book. Recommended.
Wednesday, November 07, 2012
The Endorsement I'm Proudest Of
I wasn't allowed to blog about this or write about this until today for the obvious reasons. But the best endorsement I'd ever heard from was from the CTO of the Obama for America campaign, Harper Reed. Reed bought a copy of Startup Engineering Management, and wrote back to me after reading it:
I have suggested to all of the tech leadership on the Obama campaign (and the DNC too) to read your book. I hope they take the advice and check it out. It was very good and worthwhile to read. We are not failing.Needless to say, neither I nor the book can take any credit for the success of the Obama campaign. They did an amazing job and would have done so with or without the book. I can say that from outside the campaign, there were many days when I had my doubt about whether Obama would win, but like any good startup, the campaign labored on regardless of what everyone else said or thought. It is nice to hear that they thought highly of the book, and I'm glad to have done even a tiny bit for the campaign. For an indepth-look at what the Obama campaign built and how it built it, please see this Ars Technica article. I'm obviously very pleased with the results of yesterday's election, and hope to see the promise of Obamacare fulfilled.
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