ep. 05 - Dr. Michael "Misha" Auslin: WSJ Columnist, Advisor, And Geopolitics Expert

WALL STREET JOURNAL COLUMNIST, GOVERNMENT ADVISOR, AND EXPERT ON GEOPOLITICAL AND CURRENT EVENTS

War. Economic Security. Elections. All the things you need to know about in our rapidly changing world is what Dr. Michael “Misha” Auslin deals with every day. A columnist for The Wall Street Journal, an award-winning author, government adviser, and Resident Scholar and Director of Japanese Studies at the American Enterprise Institute -- Misha is considered to be one of the leading geopolitical analysts in America. Starting from the day’s headlines, he will give you an unvarnished look behind the scenes at what's happening in America and around the world — explaining how it will affect you, your family, and your business.

Misha will discuss the current geopolitical environment and will shed light on his new book, The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region (Yale University Press, 2017).

TRANSCRIPT

ep. 05 - Dr. Michael "Misha" Auslin: WSJ Columnist, Advisor, And Geopolitics Expert

Gail Davis: War. Economic security. Elections. All the things you need to know about our rapidly changing world is what Dr. Michael "Misha" Auslin deals with every day. As a columnist for the Wall Street Journal, award winning author and government advisor, Misha is one of the leading geopolitical analysts in America. Starting from the day's headlines, Misha will give you an unvarnished look behind the scenes at what's happening in America and around the world, how it will affect you, your family and your business. Welcome and happy New Year, Misha.

Michael "Misha" Auslin: Happy New Year, Gail.

Kyle Davis: How are you doing today?

Michael "Misha" Auslin: I'm doing great. Thank you, Kyle.

Kyle Davis: Very well. I think a good place to start off, since it is January 2nd and you have a new book coming out on the 10th, would be to discuss that new book, "The End of the Asian Century" and what readers should expect and what you're going to talk about in that book.

Michael "Misha" Auslin: Well, thanks. This is the first book that really gives the rest of the story about Asia and if there's one takeaway right up front, it's: "Don't be surprised." What I mean by that is don't be surprised by bad news coming out of Asia. We have lived in a world where for decades, probably for about 40 years, we have just gotten used to good news stories from Asia, whether it was Japan or China, with the Four Tigers, or India or wherever, that there was going to be gold at the end of the rainbow and there was unlimited opportunity and this was a region where anything was possible.

While a lot of that is true, and there's no doubt that Asia has become so much more powerful and prosperous in our lifetimes, everyone here in the west was missing the rest of the story. They were missing the other side of what was happening in Asia. That's what this book really talks about. It talks about the economic problems, the political tensions, the threat of war, demographic and environmental problems and the like. It's going to be a handbook, I think, for investors, for business-people, for scholars, leaders, policy-makers, so that they don't get surprised when the headlines start talking about the problems in Asia and not just the success of Asia.

Kyle Davis: With that kind of being said, there is a lot going on with Asia and obviously with the new President-Elect Trump and the pivot towards Asia being the Obama policy, what do you see current relations being as the Obama administration comes to an end? Then, how to do you see these changing going forward and what does your book say about the next three to five years or so? Four?

Michael "Misha" Auslin: Well, it's a great question. I think the biggest way to respond or the best way to respond is that it's a question mark as to what the Obama legacy has been in Asia. It's an even bigger question mark, obviously, what the Trump legacy will be. I think we have to give President Obama credit for having recognized the importance of Asia and talked about it. Rhetorically, he talked a great deal about Asia and that was a good thing. Asia's half our world. People don't always understand the extent to which it is ... The size of it, its economic power. We get some of the headlines, but there are ... more than half the world's population lives in what I call the Indo-Pacific, which stretches from India through China and Southeast Asia and up to Korea and Japan. It's more than half the world's population.

40% of global output comes from Asia. It's got the world's largest countries. It's got some of the world's poorest countries. It has nuclear powers. It has some of the most advanced and then some of the least advanced countries. Whether you're interested in it or not, it's half of your world and it affects everything from business to nuclear weapons policy. President Obama was right to tell us that we have to be more focused on Asia.

The problem is that his policy didn't go much beyond the rhetoric. We can argue back and forth about the specifics, but if you talk to folks in Asia, they themselves would say it was more words than action. Even the actions that he wanted to take were very strongly opposed by the Chinese, for example, and so it did nothing to change their behavior, which over his eight years has only become more belligerent, more assertive and more dangerous.

President Trump, or President-Elect Trump, is going to inherit an Asia that is richer than it was eight years ago, but also one that faces far more problems and far more risks. Risk of war. Risk of economic downturn, risk of political unrest and the like. We can talk about it, you can go through all of the major countries and identify this.

What's particularly interesting though is that he himself has waded into the question about America's policy in Asia, even before becoming president. He had that phone call with the Taiwanese president, he's made a number of provocative tweets about China, he has raised the specter of completely undoing or at least overturning the last 40 years of American policy.

Everyone in Asia is on edge. Our friends are worried. Those who are not well-disposed towards us are angered by it. At the same time, though, they see it as a continuation of Obama's policies and to some degree meaning that here is a president who is going to be involved, maybe not the way they wanted, but will be involved in Asia.

As President Obama leaves office, I think the jury is really out on what he accomplished, but almost immediately attention is swinging to the provocative statements that President-Elect Trump has made. People are holding their breath. They don't really know what's going to come next.

Kyle Davis: Let's talk about one of those provocative statements or things that he did. The phone call to the Taiwanese leader. I'm looking at it as somebody who, obviously whether you agree with ... I personally agree with the pivot to Asia, but seeing what China has done over the last, let's say, 10 years or so, becoming more bolstered in their quest to build this regional hegemony, the island-building and all this other stuff. What does that mean, especially to a culture that's all about saving face, when you just hit the Taiwanese leader up and you go, "Hey, what's going on?" when we'd never done that in the last 40 years?

Michael "Misha" Auslin: Yeah, it's a challenge to conventional thinking both here and in China and in Taiwan. Those who support it think that what he did was sort of go right to the heart of the problem between the US and China, which is that the US has for years, for decades, been too far to deferential to China in terms of trying to respect what it claims are its interests as opposed to living up to our values, for example supporting a fellow or democracy or doing things that would promote American interests. President Trump simply decided to bypass all of that and took this call from the Taiwanese president, which completely exposed the untenable nature of our policy towards Taiwan, what we call strategic ambiguity. The argument of the Trump camp is that strategic ambiguity was really just another word for surrendering to China and surrendering to China's will.

From another perspective that I would say more of the professional diplomats and the Asia hands class, this was a risky, a foolhardy and dangerous move that upset four decades of very carefully calibrated diplomacy that in essence took Taiwan as an issue off the table between the United States and China. It always pops back up on the radar screen when there's the possibility of a Taiwanese president talking about independence, for example. But for the most part, this strategic ambiguity kept Taiwan off the table as a problem.

The danger for the US now is that if we change the equilibrium over Taiwan with China, we're doing it with a very different China than we had 10 or 15 or certainly 20 years ago. This is a China that is stronger. It is bolder. It more confident. It is much more willing to act assertively to protect its interests and we are seeing some of the responses to Trump's call by things that China has done, a sort of slow ramping up of pressure. They have said very clearly, that if Trump walks away from what is called the one China policy, which essentially says that there is only one China and both the mainland and Taiwan are part of that China. It's a very ambiguous statement, but if Trump walks away from that one China policy, for example to declare Taiwan an independent state, that is their red line. We have to take that very seriously.

Kyle Davis: I would agree with that.

Gail Davis: Misha, you and I have known each other and worked together for a number of years. As long as I've known you, I've known you were an Asian affairs expert, but I'm not sure I really know how you got into this and what your background is that created this great interest that you have.

Michael "Misha" Auslin: I was coming out of college right around the end of the Cold War. It wasn't quite over, but it was pretty clear that it was winding down and I started off as a Russian studies major, hence the Misha just as a nickname that I got a long time ago. It was also the era when Japan seemed like it was going to be taking over the world, when China just had begun stirring. After 40 years of the Cold War and really almost a complete pre-occupation with Europe, ultimately, there seemed to be other worlds out there that were suddenly potentially just as important, if not more important. Like a lot of people, I started shifting my gaze away from Europe and towards Asia.

I think that the level back then, about 25 years ago, the level of knowledge on Asia was really just so shockingly low. Even when you went to the universities, there just weren't that many people who were looking at Asia, certainly the way that you see today. There were well-established programs, but it was always a sideshow. Then suddenly, people really started waking up to the fact that economically, this was the game. If you were an importer, if you were an exporter, if you were an investor, Asia was absolutely central to what you were doing. Your supply chains were coming from Asia, you were sourcing from Asia. I think that the growing consciousness that this was going to shape our world, and what's interesting, if you look at it from an Asian studies perspective, is you had about a decade where we sort of trying to figure out where we were going after the Cold War, what we'd be doing in Asia, and then 9/11 hit. Everything shifted to the Middle East.

Now, it had gone there obviously with the Gulf War in '91, but again people thought that was fairly limited and we'd be done soon and then we'd go back to this question of what are we really going to do in the world? I would say that right now is the moment when we are actually getting back to where we were right at the end of the Cold War, or at least we have the potential, which is to say we got lots of problems in other places around the world and I'm happy to talk about those, but if you want to look at opportunities then really Asia is your best bet.

My point in writing the book was to say that you have to know about this half of the world in order just to be a literate, informed citizen, but there's also a lot of bad news that isn't being reported. It's funny, you have to do two things at once. You have to learn about all the good things that are going in Asia, but you also have to learn about the bad things at the same time. That's not usually how we do it. Usually we fall in love with a place, want to spend all our time learning about it, taking advantage of it and then we sort of wake up to the realities.

Here, you have to do both at the same time, because if we're not prepared for all these problems in Asia, then they're going to come up and surprise and we won't have a really good response. We need more people to study it, more people to be aware of the economics, to speak the languages, to have a sense of these cultures, because it's partly changing our own country, but it is that fundamental element of the world.

Kyle Davis: What would you say some of those positive things are that people should know, and then obviously because it's a rapidly changing environment in the Asia-Pacific region, what are some of the bad things, aside from Duterte or whatever his name is in the Philippines?

Michael "Misha" Auslin: Duterte, yeah.

Kyle Davis: What else is going on over there?

Michael "Misha" Auslin: Well, I'd say that the good things are, first of all the incredible lessons that we can still learn about modernization from Asian nations, starting with Japan, shifting to the Four Tigers: Korea, Taiwan, Singapore, Hong Kong. Then obviously looking at China, and that even some of the other Southeast Asian nations ... I mean, the extraordinary success that they have had in modernizing large segments of their economies of lifting hundreds of millions of people out of poverty, in many cases of actually making a functional nation state, and even better, many nations which chose democracy and a liberal path forward.

There's just incredible success stories that, if you were someone who was coming of age in the 1950s or the 1960s, Asia was an entire region of the earth of just third world nations that had not modernized, and today no one can think that. There's incredible lessons to be learned. I think there's good lessons about social cohesion, about education, about family ties and the like, a lot of which we struggle with here in the west.

On the other side though, there are enormous problems that have accompanied all this growth, and again that is really the point of my book. It's not to deny any of the good stuff that's happened, but it's to say, "Here's the other things that you have to understand about this period of just dramatic and rapid transformation." The days of the high-flying Asian economic success stories, you know; China, 10%, or Japan at 10%, those are long gone.

China is possibly even in a period of stagnation right now, even though its official GDP numbers are at 5-6%, maybe edging towards 7%. Almost none of the economists that really look at these figures believe that, and this is a problem that is throughout the region, including in Japan, which has struggled with economic stagnation for 25 years now, for almost an entire generation.

There is great political unrest throughout the region that we're just really not paying attention to. Just last month, the President of South Korea, the first woman president, first female president of South Korea was impeached, and is going to be thrown out of office because of a massive bribery scandal. You have bribery scandals throughout Asia; you have a huge bribery scandal in Malaysia right now that has crippled the Prime Minister. You have massive bribery scandals in China which has caused this anti-corruption crackdown.

You have deep, deep dissent and dissatisfaction throughout Asia in both democracies and autocracies. In China, there is increasing anger at a government which is becoming more and more repressive; in the Philippines for example, you mentioned Duterte, that is a populist movement that put a radical populist into power as the president, and he is acting as such; this unrestrained war on drug dealers and drug users that have claimed civilian lives.

There is unrest throughout Asia. I'll just wind up here in talking about this part, but there's also an increasing threat of war, of armed conflict, and that runs counter to all of the presumptions we have about what happens when countries and regions get richer. We assume that as they modernize, as you develop a middle class, as you get richer, you figure out ways to solve the disputes you have with your neighbors because your trade links are greater, often your political links are greater; it's just not worth it to fight a war.

Instead, we see the opposite happening in Asia today. We are closer to war in Asia today than we were 10 years ago, than we we were 20 years ago. A lot of it is being driven by China; as we were talking about briefly before, a China that is much more assertive and aggressive, it's being driven by North Korea, but it is also countries that have just not yet figured out in the simplest terms, how to get along. There is no Asian Union, there is no NATO of Asia, everybody has to deal with their problems on a bilateral or independent basis.

Whether you're looking at the South China Sea, you're looking at the East China Sea, you're looking at the Korean peninsula border, you're looking at the India-China border, we see real potential for actual armed conflict, if not war breaking out, and that is going to be a major preoccupation over the coming decade is to prevent war from breaking out, just as it will to prevent economic collapse from happening.

Kyle Davis: One of the things you mentioned a few times was the South China Sea. I think something like 90% of the world's manufactured goods go through the South China Sea, then you have something like eight or nine countries disputing who owns what, and who has their sphere of influence in there; you know China, obviously pushing their very aggressive policy in that area. Could you just speak to that and how that could affect not just the world when it comes to war, but how does it affect us when it comes to economics and trade, and everything else?

Michael "Misha" Auslin: Sure. The South China Sea is really the hinge between Europe and the Indian Ocean, and then the Pacific. It is the passageway for raw materials, for energy supplies, and for finished goods to travel back and forth between Europe, the Middle East, and East Asia, and going through Southeast Asia and the Indian Ocean. In America, even though we have a Pacific trade, we are part of that as well.

You're right, it is one of the world's most important, most crucial geo-economic spots, if not the most crucial. I'm not sure if it's 90% of trade, but it's close. I think it's like at least 70% global trade transits through the East China Sea, because it's coming from the workshops of China, Japan and Korea, and it's going through the Indian Ocean and reaching almost all of Eurasia through there.

In particular, some of these very narrow passages of water, the Strait of Malacca, the Strait of Lombok, the Sunda Strait, these are really the nerve passages for the global economy. Maintaining freedom of navigation, maintaining freedom of the high seas, preventing anyone from being able to become a dominant hegemon in this region, has increasingly become one of the top strategic goals of the United States.

At the very time that this entire region was becoming more integrated with the world economy, these disputes that you reference, these disputes in the South China Sea as well as the East China Sea, but particularly the South China Sea, became more and more acute. They center on two different groupings of islands, the Spratly Islands, which are sort of in the southeast of the South China Sea, and then the Paracel Islands which are in the northwest of the East China Sea.

The best way for Americans to think of this is to think of it as Asia's Caribbean, or Asia's Mediterranean. In fact, I wrote a piece called "Asia's Mediterranean" that tried to look at that. This is really a gigantic inland lake for Asia, if you want to think of it in those terms. It is not a sea, it's not an ocean. It's not like the Indian Ocean, it is a much more bounded body of water.

If you think of it like the Caribbean, or you think of it like the Mediterranean, then you understand why contestation over any of these islands and the waterways that pass by them and near them is so important. You have China, Vietnam, the Philippines, Taiwan, Malaysia, Brunei, and others claiming these islands, claiming shoals and reefs, sometimes many of them building on these shoals and reefs, but the most important one is China.

Over the past several years, China's built close to 5,000 acres of new islands and begun to militarize them, putting landing strips on them, so airfields, and defensive military equipment, and radars and the like, which really gives them the ability to control the skies and the seas around them, and because China is so much bigger than any of its neighbors, because it is just in a completely different class, this has the potential to entirely shift the balance of power in the region.

That's why we've gotten involved, that's why we and China are at loggerheads over this. It's why the Hague, basically the world court ruled against China and why all the nations of the region are trying to build up their military strength as much as they can in order to protect their claim.

This is the flashpoint, this is where outside of probably the Korean peninsula, this is where some type of armed conflict is most likely to break out. It was a challenge that President Obama never figured out exactly how to deal with, in part because he was consumed with other issues in the Middle East, and Ukraine and the like, and it is something that President-Elect Trump has waded into right away. We will have to see whether he decides to really challenge China in its claims, whether he really decides to support the smaller nations that feel threatened by China, or whether the balance of power continues to shift in China's favor.

Kyle Davis: I think that's a good point.

Gail Davis: Yeah, we're just kind of looking at each other going, "It's daunting." To even try to understand how American businesses will navigate their way through a potential war ... I don't even know how a business owner/leader could be best prepared for moving forward with all the potential things that could happen.

Kyle Davis: Yeah, especially when you consider the fact that it's not just China. It could impact Singapore, and all of the money and transactions and consulting gigs that I have a lot of friends who graduated school with, who are now living there and doing that. Everything else that happens in the region, aside just from the transfer of hard goods, but I think even like fishing rights, and everything else.

One of the perceptions that I guess that a lot of policy wonks, especially international relations people such as yourself, kind of get labeled as the doom and gloom crowd, and so I'm just wondering, what are some optimistic things that you're seeing, and not just these flashpoints that can worry us so?

Michael "Misha" Auslin: It's a good question, Kyle. I think I've actually become a lot more pessimistic over the past couple of years. I think when you look at the economic slowdown, you look at the rise in tensions in the South China Sea and the East China Sea and the like, there's actually really a lot of cause for legitimate and genuine alarm. Things are not going in the direction they're supposed to be going.

I think some of the upsides are that we still have ... although even that is a little more difficult now. We still have a lot of friends and partners in the region. We have five formal treaty allies: Japan, South Korea, Australia, the Philippines and Thailand. We have problems with all of these nations except actually Japan, and so even our decades long, or half century long alliances are looking a little wobblier.

We do have friends, we do have countries that want to work with us. I would say one of the bright points is that Asia since the 1980s has made a dramatic move in many countries towards democracy. Obviously whether you're talking about Taiwan, South Korea, Mongolia, Indonesia, Malaysia and the like. We are living in a sense off the patrimony of what happened 30 years ago, or 25 years ago, which was a great upwelling of liberal governance throughout the region.

That's a good thing that we should continue to take advantage of, but that is being threatened. It is threatened. In Thailand, you have a military coup again. In South Korea obviously, you have deep dissatisfaction and enough to impeach the president. In Malaysia, they've been going the wrong way on democracy and the like. We have to be aware of what we gained and try not to lose it.

Then I think the other great optimistic point or positive point is of course the economic position of Asia today. I mean, it has become so important, there is so much opportunity for trade, there is so much opportunity to take advantage of Asia that we need to be more involved. That's why I think President Trump's decision to not ratify, to not pursue the Trans-Pacific Partnership which is an 11 country free trade agreement that we signed is such a mistake.

We need to create a bigger community of free trading nations, of nations that are following open economic systems, because that benefits us just as much. Gail, you mentioned how when you look at these problems, how can you think of business leaders navigating through them? That's exactly the question to be asking.

I mean, I think the first answer is you have to get educated about what's out there because until now, CNN, and the New York Times, and the Wall Street Journal, they were all giving us just one side of the story. Now we're beginning to wake up collectively to the problems that are in China, or these other places. Number one is you need to get educated.

Number two is you need to advocate for greater American engagement in Asia, because that is a benefit to our bottom line. We need more trade, not less trade.

Gail Davis: That makes sense.

Michael "Misha" Auslin: We need more opportunities for exporters; for agricultural exporters, for high tech exporters, for financial services and other exporters to get involved, because you do have a growth in these countries where there are middle classes and there are people demanding these types of services. Activism in getting involved is another way I think that you can try to navigate this.

Then third, I think you navigate it by preparing yourself. You do have to prepare for significant turndowns economically. You have to prepare for ... if for example, you want to be in the China market, or you are in the China market, you have to be much more aware of the increasingly difficult environment for doing business there as a foreign business. Whether it's lack of intellectual property rights protection, or lack of transparency in arbitration and law, whether it's rising wages, so rising production costs because wages have been going up, you have to prepare. You have to have a plan.

I think part of that is diversification, it's looking at other regions in Asia which are developing, places like Vietnam and others, but it is also looking outside of Asia as well. What you don't want is all your eggs in one basket because China in particular ... a lot of this story is a story about China. China in particular is going to face an increasingly rocky road over the next decade, and we have to know that. Again, for me, writing the book, the whole point was, "Don't get surprised. Be prepared."

Gail Davis: Are you going to be doing a book tour and a lot of media ... what can we look forward to on that?

Michael "Misha" Auslin: We will be doing as much as we possibly can. We're going to start with a kickoff event here in Washington, DC at the American Enterprise Institute. I will be traveling to LA to San Francisco, to New York, Chicago, and we are also hoping to get down to Texas, down to Dallas and Houston, and maybe some other places as well.

A lot of radio and TV also, especially as problems crop up and people want to talk about what's going on in the South China Sea, or with Trump and Taiwan, I think there's a lot of ways to find out about the book. There's a Twitter account which is end_of_asia; think there's a couple of underscores in there but you can just sort of find it on Twitter.

Gail Davis: Okay.

Michael "Misha" Auslin: We have a Facebook account that we're just setting up, because I haven't done much with Facebook. We're on social media and you can always follow me on Twitter, michaelauslin, one word, and that's a way to find out what's going on as well. Hopefully people will get the message.

I would just like to say, we've had as I mentioned about 40 years of good news and often rightfully so about Asia. I think this is the first book that is the beginning of a change in the common wisdom on what to expect about Asia that we're going to go from celebrating a strong Asia to worrying about a weak Asia. This will be the book that gives you the complete overview from India to Japan, economics to politics and war, about what's happening and more importantly, what might happen.

Gail Davis: Well, it certainly sounds like perfect timing for sure.

Kyle Davis: With regards to Japan, which is what your focus was, what's ... I remember, what, "Clash of Civilizations" came out in '93 or something, saying that Japan's going to be this economic marvel of the world, and it could overtake the United States, but as you've said, it's kind of been in stagnation for some time and now birth rates are low. There's just a lot of concern there with Japan; what's going on there, and what can we expect in the next 5 or 10 years with that?

Michael "Misha" Auslin: Well, it's interesting. I've actually swung back to being more of a bull on Japan lately, and I think in part that came about from traveling all throughout Asia for a couple of years doing the research for this book and then writing the book over the past, the whole process took about five years or so. Five or six years.

I have been working personally on Japan for 25 years as a professor, and a scholar, and a policy analyst, and then broader as an Asia analyst, and was fairly negative about Japan. It was only when I started traveling to all these other places that I realized just how well Japan actually was doing. I think it's a story that we've missed, and not surprising.

Again, we were all focused on China, we were focused on the strong horse. We were looking at the place that had 10% income growth as opposed to one or two, or what seemed to be flat. What we missed was this actually incredible story about a country that was adapting to some of the dramatic transformations that you mentioned Kyle, such as a declining birthrate, which is actually now leading to a decline of the population; a country that had gone again from whatever it was, 10% growth rate down to 1 and 2% at best, but a country that maintained its standard of living, maintained its quality of life, its skill workforce ...

Actually, in some measures continued to improve on living standards, on life expectancy, on educational achievement, a country that remained very safe and peaceful, and socially united even during 25 years of economic stagnation, which is not something I think you would see in a lot of other places. I actually think with that this slow down in China, that is becoming more and more severe, and people are really beginning to pay attention to, that Japan will in some ways reemerge onto our consciousness.

I don't think it's going to go back to the 1980s when everything was Japanese, right? The world was turning Japanese. I think that we're going to have a more balanced appreciation or assessment of strengths and weaknesses in Asia. I think we have overemphasized China and under-emphasized Japan for probably the past at least 15 years, if not a little bit longer. I think those are going to even out a little bit.

I think we're going to wake up to the real limitations that China has, the real problems that it has, and we're going to appreciate better Japan's strengths. That doesn't mean that it doesn't face some incredibly difficult challenges ahead which include the demographic decline. It includes that the question of really unleashing entrepreneurial spirits, of breaking through some of the more restrictive social practices that can hinder business and the like because of a very vertically oriented society, but at the same time, number one I don't think we should expect Japan to change to be like us, because that's what we thought might happen back in the '80s, and it didn't.

We will understand better the balance that Japan itself has chosen, which is a balance to ... I would say in a nutshell, forego some levels of economic growth in order to preserve social stability and certainty. That I think is an area where we are just going to start looking more careful at what's been going on, because the one thing get very interestingly, when you travel through Asia, you get right away is that Japan is still a model for many countries.

Japan remains the benchmark. Whether people are talking about quality of life, about green technology, about sustainability, obviously political freedoms overall, press freedoms overall, things like that, educational opportunities, we may have thought for a long time that Japan's day had come and gone, but that's not what the Asians think. There are very few Asian nations that want to become like China; they want to trade with China, they want to get as wealthy as they can off of China, like the rest of us. They don't want to become like China.

Conversely, even with the history problems and lots of outstanding historical memory issues, there are a lot of Asian nations that want to become like Japan. Not become Japanese, but become like Japan. I think there's actually the opportunity to do a lot of interesting work on comparing Japan and China, over the next couple of years or decade or so, to get a much better balanced assessment of how these two ... again, this world's second and third largest economies have evolved.

Gail Davis: Misha, before we let you go, I wanted to circle back to one thing; at the front of the show, you said you got into the Asian interest and you shifted from Russia. With everything that's going on with Russia, I did want to circle back to that and just get your viewpoint on where we are with Russia.

Michael "Misha" Auslin: Yeah, it's amazing. If you contrast the atmosphere in Washington, DC today over Russia with even three years ago, four years ago ... I mean, you remember during the election 2012, when Barack Obama mocked Mitt Romney for saying Russia was our number one geopolitical foe, saying the 1980s want their foreign policy back? Well, that's exactly where we are.

As usual, what happened was we ignored it. The Obama administration ignored it, the Bush administration ignored it, the Clinton administration made some terrible choices over Russia back in the '90s, and now we're swinging in the other direction which is thinly-disguised panic over Russia. Again, we don't have a very balanced approach.

I think people were caught by such surprise by Putin, even though Putin himself for years had been talking about regaining territory in Ukraine, particularly Crimea; he had been talking about getting involved in areas in Russia's near abroad, and so whether that meant the Baltics or the Belt in Eastern Europe, or even as far away, though not all that far, as the Middle East. We just thought we had taken care of Russia once for all and we don't have to think about it anymore.

Kyle Davis: Right.

Michael "Misha" Auslin: The problem I think is that ... well, let me use myself as an example. I was trained as a Russianist, I spoke Russian, I lived there for a little bit, I have an advanced degree in it. People like me left the Russian studies field, so for 25 years we have not replenished our intellectual capital about Russia. We have not replenished the stocks of people who think about Russia, who are able to understand it and interpret it.

There are just very few, much fewer than do Asia today, and many of them are folks who were doing it during the Cold War. On the one hand, they have a very long period looking at it, but on the other hand, some of them are stuck in more of a Cold War mindset. We don't have a ton of people that you can turn to and say, "Okay, tell us, what is really going on there?"

Instead, we've now made Putin out to be the greatest danger that the world faces. I don't think he's the greatest danger that the world faces, but obviously he's also not a benign actor. Russia's economy is incredibly weak, and that's something we don't factor into our calculations when we're thinking about, "Well, how much more can he and will he do?" We don't have a very good understanding of the political balance inside the country.

We know that he's been eliminating, literally, many of his opponents, but we don't look as much at other potential centers or challengers to power. We have a very, very dim and clouded view of what's going on in Russia today, and so the answer to your question Gail, I think, is that we will continue to be surprised by Russia as well.

People said he would never go into Crimea, and then he did. They said he would never go into Ukraine, and then he did. Then because of the Obama administration's essential disinterest, Russia is now the leading external player in the Middle East. Where's next? Will it be with Iran, which it's already working with in conjunction in Syria? Will it be in the Far East? We need a lot more attention paid to Russia, most importantly so that we don't overreact.

Russia is still a very, very weak nation overall. The danger is that if we make it a 10-foot tall monster, and then we do cause a serious reaction from it, that may involve us in some type of directly confrontation. They're weak, but they still have nuclear weapons; they're weak, but they're still a very aggressive and proud power under Vladimir Putin. This is what happens by the way when you ignore large parts of the world for long periods of time.

None of these countries go away, and if you're not paying attention to them, if you're not really carefully understanding what's going on, you will get caught by surprise. That's what I don't want to happen in Asia, but we have already been caught by surprise by Russia, and I think it's only going to get worse before it gets better. Now the question of course is, what happens with Putin? Is he really as pro-Russia as he claims? Does he have potentially a more sophisticated understanding of Russia's strengths and weaknesses than the Obama administration, and therefore he's more willing to seem to be willing to potentially work with Putin?

All of this will get played out; the problem is that we just don't have a lot of folks with enough knowledge to tell us about it, and we will have to do our best to muddle through and worry that ... we don't have as much to worry about on the economic side, but we have a ton to worry about on the political and the military side.

Kyle Davis: I remember in February when he invaded Crimea in ... what, 2012 or something like that? I was working in a little think tank at a Columbia University there and everything prior to that, even in the presidential campaign with Romney, we were all like, "Yeah, that kind of made sense. It's not really Russia." Then when the invasion happened, we see the little "green men," we're all like, "Well, damn. He caught us."

Right. Great. I think this is a good place to wrap up. What I'd like to have everybody do is go get yourself a copy of "The End of Asia" and go support Misha, go do that now.

Michael "Misha" Auslin: Thank you.

Kyle Davis: You're welcome. If you're interested in reading the transcript from today's podcast, please visit GDApodcast.com, where we'll also have blog post and links to iTunes, and SoundCloud, and everything else for you to listen to this. Moreover, if you're interested in booking Misha for your event, you can visit GDAspeakers.com or call 214-420-1999. Thanks Misha.

Michael "Misha" Auslin: I'm much funnier in real life.

Kyle Davis: I'm sure you are.

Gail Davis: Thank you, Misha.

Kyle Davis: Hey, thanks Misha.

Michael "Misha" Auslin: Thank you guys, appreciate it.