Rising Titans Falling Giants

The intimate, fly-on-the wall tale of the decline and fall of an America icon With one notable exception, the firms that make up what we know as Wall Street have always been part of an inbred, insular culture that most people only vaguely understand. The exception was Merrill Lynch, a firm that revolutionized the stock market by bringing Wall Street to Main Street, setting up offices in far-flung cities and towns long ignored by the giants of finance. With its “thundering herd” of financial advisers, perhaps no other business, whether in financial services or elsewhere, so epitomized the American spirit. Merrill Lynch was not only “bullish on America,” it was a big reason why so many average Americans were able to grow wealthy by investing in the stock market. Merrill Lynch was an icon. Its sudden decline, collapse, and sale to Bank of America was a shock. How did it happen? Why did it happen? And what does this story of greed, hubris, and incompetence tell us about the culture of Wall Street that continues to this day even though it came close to destroying the American economy? A culture in which the CEO of a firm losing $28 billion pushes hard to be paid a $25 million bonus. A culture in which two Merrill Lynch executives are guaranteed bonuses of $30 million and $40 million for four months’ work, even while the firm is struggling to reduce its losses by firing thousands of employees. Based on unparalleled sources at both Merrill Lynch and Bank of America, Greg Farrell’s Crash of the Titans is a Shakespearean saga of three flawed masters of the universe. E. Stanley O’Neal, whose inspiring rise from the segregated South to the corner office of Merrill Lynch—where he engineered a successful turnaround—was undone by his belief that a smooth-talking salesman could handle one of the most difficult jobs on Wall Street. Because he enjoyed O’Neal’s support, this executive was allowed to build up an astonishing $30 billion position in CDOs on the firm’s balance sheet, at a time when all other Wall Street firms were desperately trying to exit the business. After O’Neal comes John Thain, the cerebral, MIT-educated technocrat whose rescue of the New York Stock Exchange earned him the nickname “Super Thain.” He was hired to save Merrill Lynch in late 2007, but his belief that the markets would rebound led him to underestimate the depth of Merrill’s problems. Finally, we meet Bank of America CEO Ken Lewis, a street fighter raised barely above the poverty line in rural Georgia, whose “my way or the highway” management style suffers fools more easily than potential rivals, and who made a $50 billion commitment over a September weekend to buy a business he really didn’t understand, thus jeopardizing his own institution. The merger itself turns out to be a bizarre combination of cultures that blend like oil and water, where slick Wall Street bankers suddenly find themselves reporting to a cast of characters straight out of the Beverly Hillbillies. BofA’s inbred culture, which perceived New York banks its enemies, was based on loyalty and a good-ol’-boy network in which competence played second fiddle to blind obedience. Crash of the Titans is a financial thriller that puts you in the theater as the historic events of the financial crisis unfold and people responsible for billion of dollars of other people’s money gamble recklessly to enhance their power and their paychecks or to save their own skins. Its wealth of never-before-revealed information and focus on two icons of corporate America make it the book that puts together all the pieces of the Wall Street disaster.

Highlights the changes and continuities in world politics that emerged from the end of the Cold War.

Black Gold and Blackmail seeks to explain why great powers adopt such different strategies to protect their oil access from politically motivated disruptions. In extreme cases, such as Imperial Japan in 1941, great powers fought wars to grab oil territory in anticipation of a potential embargo by the Allies; in other instances, such as Germany in the early Nazi period, states chose relatively subdued measures like oil alliances or domestic policies to conserve oil. What accounts for this variation? Fundamentally, it is puzzling that great powers fear oil coercion at all because the global market makes oil sanctions very difficult to enforce. Rosemary A. Kelanic argues that two variables determine what strategy a great power will adopt: the petroleum deficit, which measures how much oil the state produces domestically compared to what it needs for its strategic objectives; and disruptibility, which estimates the susceptibility of a state's oil imports to military interdiction—that is, blockade. Because global markets undercut the effectiveness of oil sanctions, blockade is in practice the only true threat to great power oil access. That, combined with the devastating consequences of oil deprivation to a state's military power, explains why states fear oil coercion deeply despite the adaptive functions of the market. Together, these two variables predict a state's coercive vulnerability, which determines how willing the state will be to accept the costs and risks attendant on various potential strategies. Only those great powers with large deficits and highly disruptible imports will adopt the most extreme strategy: direct control of oil through territorial conquest.

What are rising powers? Do they challenge the international order? Why do some countries but not others become rising powers? In Why Nations Rise, Manjari Chaterjee Miller answers these questions and shows that some countries rise not just because they develop the military and economic power to do so but because they develop particular narratives about how to become a great power in the style of the great power du jour. These active rising powers accept the prevalent norms of the international order in order to become great powers. On the other hand, countries which have military and economic power but not these narratives do not rise enough to become great powers--they stay reticent powers. An examination of the narratives in historical (the United States, the Netherlands, Meiji Japan) and contemporary (Cold War Japan, post-Cold War China and India) cases, Why Nations Rise shows patterns of active and reticent rising powers and presents lessons for how to understand the rising powers of China and India today.

How great powers react to their inevitable decline shapes their own destiny as well as the course of international politics. Leaders can decide to engage with others or isolate themselves; to build alliances or initiate war; to stoke up nationalism or invest in innovation; to focus on economic competition or develop their people's soft power. While some of these coping strategies foster cooperation, others provoke conflict with neighbours. In Coping with Geopolitical Decline leading political scientists, historians, and sociologists explore the strategies adopted by leaders and domestic elites to prevent, reverse, or deny the decline of their country. Analyzing four European cases (Byzantium, England, France, Russia) before turning to the contemporary debate in the United States, they argue that geopolitics is not fate. Coping strategies depend on the context, which includes cultural representations of decline, the experience of military defeat, and domestic politics. Whether elites choose to modernize their economy, bolster their diplomatic status, or launch preventive war makes a difference in the extent and speed of a country's decline. By the same token, coping strategies affect world order. A well-managed decline allows for a peaceful power transition. Some strategies, however, may preserve the peace at the expense of a country's standing, while others will stave off decline but encourage imperialist adventures or precipitate military conflicts. As the United States challenges the liberal international order, fights back China's ascendency, and reconsiders its traditional alliances, Coping with Geopolitical Decline analyzes key lessons from Europe's experience and provides comparative insight into the likely dynamics of cooperation and conflict in the twenty-first century.

How commerce determines whether America preserves the peace or goes to war When the Cold War ended, many believed that expanding trade would usher in an era of peace. Yet today the United States finds itself confronting not just Russia in Europe but China in the Indo-Pacific, Africa, and Latin America. Shedding new light on how trade both reduces and increases the risks of international crisis, A World Safe for Commerce traces how, since the nation’s founding, the United States has consistently moved from peace to conflict when the commerce needed for national security is under threat. Dale Copeland shows how commerce pushes the United States and its rivals to expand their spheres of influence for access to goods even as they worry about provoking a breakdown in trade relations that could spiral into military conflict. Taking readers from the wars with Britain in 1776 and 1812 to World War II and the Cold War, he describes how America’s leaders have grappled with this inherent tension, and why they have shifted, sometimes dramatically, from peaceful, mutually beneficial policies to coercion and force in order to increase control over vital trade and prevent economic decline. A World Safe for Commerce reveals how trade competition could lead the United States and China into full-scale confrontation. But it also offers hope that both sides can work to improve their overall trade expectations and foster the confidence needed for long-term peace and stability.

This open access book consists of essays selected from Joseph S. Nye, Jr.’s last three decades of writing and illustrate a variety of perspectives on the nature of power, the role of the United States in the world and US-China relations. Through this collection, it is hoped that readers will gain a better understanding of today’s global environment and find that while great power competition may be inevitable in a world as centers of power shift, cooperating to address transnational challenges can be a positive sum game. The contents of this book are divided into four main parts. Part One discusses the origins and political progress of the concept of “Soft Power”. Part Two explores soft power in the American experience, its sources and interaction with US foreign policy, as well as its ebb and flow in the age of Obama, Trump and Biden. Part Three examines the rise of and the opportunities and difficulties for Chinese soft power, focusing on China’s investment in soft power and how this demonstrates its commitment to a peaceful rise. However, it also addresses the question of how can China get “smart” on how it uses soft power. Part Four provides a bird’s-eye view of power shifts in the 21st century and the interactions between the US as an established power and China as a rising power, while also reassuring readers that Thucydidean fears are unnecessary and a Cold War is avoidable. Both countries have to realize that some forms of power must be exercised with others, not over others, the development of soft power need not be a zero-sum game. Ultimately, the US-China relationship is a “cooperative rivalry” where a successful strategy of “smart competition” is necessary and cooperation on transnational challenges like climate change, pandemics, cyberterrorism and nuclear proliferation, will serve to benefit not only China and the US, but the world as a whole.