David Smick is the Chairman and Chief Executive Officer of Johnson Smick International, Inc. (JSI), a financial market advisory firm based in Washington, D.C. Founded in 1985, the firm was the first of its kind to provide information services on important global economic and political/policy changes to the large macroeconomic-oriented hedge funds and proprietary trading departments of major financial institutions. In 1990 then-Federal Reserve Vice Chairman Manuel H. Johnson joined the firm. Today JSI clients consist of a select group of prestigious financial institutions located throughout the world.
Mr. Smick is the author of The World is Curved: Hidden Dangers to the Global Economy. Selected by former President Bill Clinton as one of the top three books to read on the global financial crisis, the book has appeared on the New York Times Business Best Seller list, the Business Week Best Seller list, and the New York Times Poli-Book Best Seller list. The book was described as “astonishingly prescient” by New York Times columnist David Brooks, “eerily prescient” by Washington Post columnist David Ignatius, “supremely prescient” by Forbes magazine, and simply “prescient” by the Wall Street Journal. CNN called Smick “one of the most respected economic thinkers in the country.”
Mr. Smick is also the founder, editor, and publisher of The International Economy (TIE) magazine, a quarterly publication launched in 1987 and geared toward the global policymaking community. Labeled by the Washington Post “that precocious Washington [quarterly],” the niche publication is targeted almost exclusively to the financial policy elite. The publication’s Editorial Advisory Board includes a broad cross section of global strategists—from European Central Bank President Jean-Claude Trichet to financier George Soros, from Columbia University economist Jeffrey Sachs to Harvard’s Martin Feldstein. In defining the magazine, the Financial Times described Mr. Smick as editor as “[one] of Washington’s premier insiders” in the field of economic policy.
Mr. Smick has advised both Republican and Democratic presidential candidates including Ronald Reagan and New Jersey Senator Bill Bradley (D). He began his career in Washington in 1975 as a member of the professional staff of the United States Senate where he wrote economic position papers and speeches. From 1977–78, he served in Detroit as a speechwriter to the executives of the Chrysler Corporation.
A former Democrat who was born and raised in Baltimore, Mr. Smick has worked as a senior staff member in both the U.S. Senate and House of Representatives. In late 1979, Mr. Smick attended a series of seminal briefings with presidential candidate Ronald Reagan and his economic team. Out of these briefings came the formation of the 1981 economic recovery plan. Mr. Smick also helped launch legislation to establish “urban enterprise zones” a program of targeted tax incentives for decaying inner city areas.
In 1985 Mr. Smick, working with Senator Bradley, Representative Jack Kemp, and the bipartisan leadership of the U.S. House and Senate, developed and organized the highly successful series of “U.S. Congressional Summits on the Dollar and Trade.” These annual gatherings, with Alan Greenspan initially as moderator, attracted heads of state as well as the finance ministers and central bank governors from every major industrialized country. “Congressional Summits” have taken place in Washington, New York, Zürich, Frankfurt, Vienna, and Tokyo. In Zürich, Senator Bradley launched a major third world debt reform initiative which later became the underpinnings of the now famous Brady Debt Plan (Brady Bonds). These gatherings culminated in the formation in 1990 of the G7 Council, a nonprofit foundation to improve international policy coordination and free trade.
Mr. Smick’s views on domestic and international economics have appeared in major newspapers and magazines, here and abroad, including the Wall Street Journal, the Washington Post, and the New York Times.
The title The World Is Curved is sure to draw comparisons with Tom Friedman’s book The World Is Flat. Why did you select the title? Why is the world now curved? Was it ever flat?
Friedman brilliantly presents the first installment of the globalization story, concentrating on the revolutionizing (flattening) of the global supply chain. But there is a second installment—the financial side of the story where the world is not flat; the world is curved. You can’t see over the horizon. Sight lines are limited. As during the subprime mortgage crisis, we are forced to travel down an endless, dangerously twisting and turning road of volatility with steep valleys and risky mountainous climbs. We can’t see financial risk ahead. A small village in Arctic Norway can see its entire financial future destroyed because its financial managers invested heavily in a Citigroup product called a collateralized debt obligation.
How does The World Is Curved differ from other books about our current economic state?
The book demystifies the complicated and terrifying world of international finance. This is a practical, insider’s guide to the revolution in global financial markets. I offer numerous anecdotes about my behind-the-scenes experiences in the hedge fund world and in key meetings with prime ministers, finance ministers, and central bankers, from Alan Greenspan to Ben Bernanke to the European Central Bank’s Jean-Claude Trichet. The book is both frightening yet hopeful.
What do you hope readers take away from The World Is Curved?
The global financial system is near a tipping point of uncertainty and could come crashing down to the detriment of all of us. Protectionist and class warfare policies, and other policy prescriptions to curb reckless volatility, may be well-intended efforts to deal with the anxieties of global trade and financial markets. But the danger is that they produce unintended consequences that could send us over the edge.
Testimonials:
“The book defines financial globalization as a system that produces huge and scary financial dislocations, but at the same time is the cherished goose that lays the golden eggs. In the end, The World Is Curved also offers a message of hope and confidence.”
—Renato Ruggiero, former director-general, World Trade Organization
“Both insightful and provocative in discussing a dominant contemporary question—where do we go from here?”
—Michael Steinhardt, Steinhardt Management
“A worthy successor to Tom Friedman’s The World Is Flat. The World Is Curved takes up where Friedman left off, lucidly explaining the vital but poorly understood role of the financial system that provides the essential underpinnings of the world economy.”
—Murray Weidenbaum, Washington University in St. Louis
“Lively, well-written, and insightful, The World Is Curved by David Smick probes and thoughtfully examines the strains and imbalances in the global economy and international financial markets. Smick also presents a series of innovative recommendations and observations designed to address the problems he describes, and challenges us to come to grips with them before they worsen.”
—Robert Hormats, vice chairman, Goldman Sachs International
The World Is Curved is a brilliant, if disturbing, exposé of today’s global financial minefields and an equally compelling description of possible remedies. The next president would do well to read this book before taking office next year.”
—Lawrence Eagleburger, former U.S. Secretary of State