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Say “Richard Nixon” and many Americans think “Watergate” and “scandal”. An old man and a well-read reader can also be remembered as the man who opened up the negotiated relations in the US and China.
But an in-depth analysis reveals that the challenges facing Nixon executives – from changing American geographical perspectives, through global crises, to the complexity of changing economic and foreign policy – are what President Joe Biden faces today.
In fact, you could say that America is now at a point very similar to 1971, the year Nixon and its top advisers made the decision to cut the link between the US dollar and gold, thus removing the key pillar of Bretton Woods stability. That’s what Jeffrey Garten says in his new book, Three Days in Camp David: How a Secret Conference in 1971 Transforms a Global Economy.
Garten is well-prepared to tell the story. He has worked in negotiation and finance: he was secretary of trade in the Clinton administration and general manager of the Blackstone Group. He has done extensive interviews with a number of celebrities who were, like the line from the music Hamilton he goes, literally “in the room where it happened”. The full list of 44 interviewees – from Henry Kissinger and Paul Volcker to Alan Greenspan and George Shultz – is impressive and complete.
Why is this topic important today? Because now, as at that time, the time in the history of the global economic system is approaching. It’s one that obviously started with Nixon’s idea of breaking the gold-gold nail. This helped the U.S. foreign powers to compete more heavily (the “America First” approach of the day) and settle trade disputes that arose as a result of the multi-million dollar exports.
It also helped the central bank to become more economically viable. Instead of making difficult decisions between the various parties, Nixon (and all the executives since then) have invested in the Federal Reserve. Rising interest rates reduce inflation, and the dollar depreciates in the US.
But instead of putting too much stress on the mind, this laid the foundation for the economy, as security instead of decoration became the largest financial business in the US, which was too big to fail.
Biden officials expect the global economy to contribute – yes, it should if the President achieves his goals, which depend on low interest rates and the strength of the dollar allow US to borrow.
But everything from the pressure of electricity prices to exchange inconsistencies the recent popularity of gold, money supply and an increase in digital investment (such as digital renminbi, which China expects to play a major role in its trade and economic growth) is proving to be a boon.
Like the current paradigm broken quickly and unexpectedly, all cash and any dollar bills can be depreciated quickly. When Biden’s management sees these challenges and how they can be overcome, it would be wise to get three lessons from Nixonia’s handbook.
First, populism must be organized with strong connections with allies. At the point, Nixon’s supervisors were very different: its Treasury Secretary, John Connally, was an unlimited citizen, but national security adviser Henry Kissinger was the last in the world. Having a team of competitors at the table confirmed the honest discussion of how we can improve the domestic and real needs of the foreign market.
Advanced government-led approaches were also needed. Who knew that Peter Peterson, Nixon’s special adviser, was an excellent financial planner? He encouraged intensive thinking in global competition (urging Nixon to “eliminate any of Marshall’s psychology plans”), as well as a “home improvement” approach that incorporates government funding to grow significantly. art, employee also and stable economy – all the signs of Biden’s approach.
What Nixon did that Biden did not do and articulates a vision for the global economy. He rejected previous views, such as John F Kennedy and Lyndon Johnson, who, as Garten put it, “acted as if there were no limits to America’s commitment to peace, stability and development in the world”, or at home. In another Nixon vision, America would no longer take over the world, but would lead to a new alliance, including Germany and Japan.
What began as a “strong, uncoordinated system” eradicated America’s influence on the world, through better (if still imperfect) technology, a number of nuclear weapons agreements with new international organizations to tackle poverty and improve food security. But this only happened because the supervisors were able to save domestic and international needs.
Between Big Tech, a state-owned China and a growing economy, things today are very difficult. But the big problem is the same: How can America support itself without leaving the world? Preparations for other Camp David activities may be appropriate.
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