Today, Michael Boskin speaks with defense policy expert Michael O’Hanlon about the evolution of American strategy over 250 years of military conflict; John Cochrane examines several plausible explanations of what’s driving an increase in long-term US interest rates; and Michael Bordo teams up with Harold James for a deep dive essay on the history of power, money, and world order.
Security and Defense
What can 250 years of American military history teach us about today’s national security challenges?
The Big Idea: Senior Fellow Michael Boskin speaks with Brookings Institution Senior Fellow Michael O’Hanlon, author of To Dare Mighty Things: U.S. Defense Strategy Since the Revolution, about how American military strategy has evolved from the Revolution and the Civil War through two world wars, the Cold War, Vietnam, Iraq, and Afghanistan. Boskin and O’Hanlon also consider the lessons of this history for current challenges, including Russia’s war against Ukraine and China’s threats against Taiwan. Watch or listen here.
Economics
“US long term interest rates are surging,” Senior Fellow John H. Cochrane observes at his Grumpy Economist Substack. “What’s going on?” As the distinguished economist reminds us, “Hayek taught us that if we knew why strawberry prices go up and down, let alone interest rates, communism would have worked. Market prices aggregate the millions of pieces of information dispersed around the world, and give us a signal what to do. But they don’t reveal why prices move.” Nevertheless, Cochrane makes “an exception” to his usual avoidance of market commentary to examine the possible reasons interest rates are rising. Among the possibilities Cochrane sees are investor expectations of higher future inflation or a rate hike by the Federal Reserve; or, that “we’re just returning to normal” after a period of unusually low rates in the 2010s. Overall, Cochrane cautions that he doesn’t know exactly why rates are rising but says “fleshing out the stories” as he does in this post can help make sense of current economic conditions. Read more here.
Freedom Frequency
A new essay at Freedom Frequency from Distinguished Visiting Fellow Michael D. Bordo and Princeton University professor of European Studies Harold James examines the interconnection of money, power, and security in world history. International orders have often arisen in particular states that could shape a vision attractive to other states, such as the growth-inducing order of Britain in the eighteenth century and the post–World War II system of Bretton Woods, the authors write. London, as the unquestioned center of economic power in the nineteenth century, fueled imperial expansion while building in economic resilience. But competition and technology eroded that lead, and World War I demolished the stability of the prewar order. The United States emerged as the dominant economic power and creditor to the belligerents, but the Depression caused America to stumble, Bordo and James argue. A new, postwar theory of hegemonic stability arose, wherein a benign leading power would harmonize its interests with the world by keeping trade and financial markets open. Today, the authors conclude, pre-1914 concerns are back, highlighting the dangers of the US–China rivalry. Read more here.
In 1989, nearly 2 million people in Estonia, Latvia, and Lithuania lined the roads in a human chain, symbolizing their memories of freedoms taken away a half-century earlier by the Soviets and Nazis. This burst of peaceful protest, known as the Baltic Way, lasted just a few hours, but it showed the world that remembrance could not be erased, writes curator Liisi Ploom for the Liberty Amplified series. Today, fragile mementos of that spark of dissent reside in museum collections, where new generations of citizens can carry those memories forward into a world where freedom is still threatened. “Authoritarian regimes often attempt to control memory because memory shapes identity,” Ploom writes. “The Baltic Way demonstrated the opposite: when ordinary people reclaim their own history, remembrance itself becomes a form of peaceful resistance.” Read more here.
California Policy & Politics
In the latest essay for California on Your Mind, Distinguished Policy Fellow Bill Whalen ponders why Sacramento seems to be “Dullsville,” even as the end of August traditionally brings a flurry of bills to be signed or rejected. The question is even more pertinent in light of Governor Gavin Newsom’s nationwide roaming, Whalen writes. The column considers: Will Newsom use the bill-signing tradition to burnish his credentials for a likely presidential run? Or is he hunting for national credibility elsewhere? The political suspense in Sacramento also includes the question of whether the “billionaire tax” or a raft of competing measures will pass in the upcoming November vote. Whalen then turns to Rep. Nancy Pelosi’s current political project. Now that she’s stepped aside as House speaker, he writes, Pelosi is working to prevent state Senator Scott Wiener from winning her former seat. Read more here.
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