And the Money Kept Rolling in (and Out)

And the Money Kept Rolling in (and Out)

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by Paul Blustein

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The dramatic, definitive account of the most spectacular economic meltdown of modern times exposes the dangerous flaws of our global financial system.

In the 1990s, few countries were more lionized than Argentina for its efforts to join the club of wealthy nations. Argentina's policies drew enthusiastic applause from the IMF, the World Bank and Wall Street. But the

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The dramatic, definitive account of the most spectacular economic meltdown of modern times exposes the dangerous flaws of our global financial system.

In the 1990s, few countries were more lionized than Argentina for its efforts to join the club of wealthy nations. Argentina's policies drew enthusiastic applause from the IMF, the World Bank and Wall Street. But the club has a disturbing propensity to turn its back on arrivistes and cast them out. That was what happened in 2001, when Argentina suffered one of the most spectacular crashes in modern history. With it came appalling social and political chaos, a collapse of the peso, and a wrenching downturn that threw millions into poverty and left nearly one quarter of the workforce unemployed.

Paul Blustein, whose book about the IMF, The Chastening, was called "gripping, often frightening" by The Economist and lauded by the Wall Street Journal as "a superbly reported and skillfully woven story," now gets right inside Argentina's rise and fall in a dramatic account based on hundreds of interviews with top policymakers and financial market players as well as reams of internal documents. He shows how the IMF turned a blind eye to the vulnerabilities of its star pupil, and exposes the conduct of global financial market players in Argentina as redolent of the scandals-like those at Enron, WorldCom and Global Crossing- that rocked Wall Street in recent years. By going behind the scenes of Argentina's debacle, Blustein shows with unmistakable clarity how sadly elusive the path of hope and progress remains to the great bulk of humanity still mired in poverty and underdevelopment.

Author Biography: Paul Blustein, a staff writer at the Washington Post, has covered business and economic issues for more than twenty-five years. He has also worked at Forbes Magazine and the Wall Street Journal. His work has won several prizes, including business journalism's most prestigious, the Gerald Loeb Award.

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Editorial Reviews

Wall Street Journal
"An extraordinary tale of bad policy and financial gluttony... Blustein tells the tale with precision and panache...[and] color commentary."
February 16, 2005
Alan Beattie
"[Blustein] reconstructs the riveting narrative of a nation that in 2001 committed the biggest sovereign debt default in history."
Financial Times, February 17, 2005
Moisés Naím
In And the Money Kept Rolling In (and Out), Paul Blustein, a veteran economic reporter at The Washington Post, vividly documents the most recent of these megacrashes: Argentina's 2000-01 economic collapse. The book could have been titled "CSI: Buenos Aires" because what Blustein expertly investigates is undoubtedly an economic crime scene. Alas, that scene is familiar: An "emerging market," with all the trappings of a modern market economy and run with the latest economic ideas fashionable in Washington and loudly cheered by Wall Street, suddenly implodes in a catastrophic spiral of economic chaos and political turmoil. Widespread human suffering ensues.
— The Washington Post
Publishers Weekly
Argentina's economic boom in the 1990s made it a "poster-child" for the "Washington consensus" of market-oriented reform; when the currency, banking system, economy and a succession of governments all collapsed in 2001, the country became an object lesson in the pitfalls of that model. Journalist Blustein (The Chastening) offers a fine postmortem of the debacle, from a more centrist perspective than the subtitle might suggest. The problem, he contends, lay in Argentina's unsustainable government deficits and its policy of tying the currency to a rigid exchange rate of one peso to the dollar, a measure that ended hyperinflation, but, when the dollar soared, eventually priced Argentinean products out of the market. He criticizes the International Monetary Fund and Wall Street not for imposing austerity, but for indulgently lending Argentina vast sums, despite warning signs, that saddled it with debt and delayed a necessary devaluation and loan restructuring. Blustein's discussion of Argentina's free trade policies and their effects on industry and employment is skimpier than it should be. But working from a colorful inside account of the decision-making processes of the IMF and international investors, he does an admirable job of elucidating the complexities of international finance, currency reform and debt, taking note of their consequences for ordinary people. (Feb. 1) Copyright 2005 Reed Business Information.
Foreign Affairs
Economists have long warned that boom-and-bust financial markets are the Achilles' heel of capitalism. Building on his previous dissection of the IMF, Blustein's vivid and intelligent case study of economic tragedy indignantly recounts how indulgent international creditors first undermined Argentina's financial discipline and then precipitated a painful collapse. A seasoned business journalist, Blustein honors Cassandras whose prescient warnings were overruled by "misfeasance, nonfeasance and even malfeasance" and paints unflattering portraits of Horst Köhler, Paul O'Neill, John Taylor, and investment bankers Joyce Chang and David Mulford. Yet Blustein's central contention — that the IMF and the U.S. Treasury should have coordinated a pre-emptive strike to force an early debt write-down — underestimates the willpower of Argentine financial wizard Domingo Cavallo. Blustein understands but sometimes downplays the tough tradeoffs and institutional constraints that make international economic policymaking high art. The current team in Buenos Aires, engaged in confiscatory debt write-downs and heady antiglobalization rhetoric, will welcome this account.

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6.48(w) x 9.60(h) x 1.12(d)

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And the Money Kept Rolling In (and Out) Wall Stree 5 out of 5 based on 0 ratings. 1 reviews.
Guest More than 1 year ago
This is a very readable, lively presentation of the story of how Argentina overcame decades of monetary mismanagement and put itself on the path to economic growth during the early 1990s only to descend again into economic chaos. We recommend this book to those interested in international finance, although it suffers slightly from a moralistic tone, as author Paul Blustein points an accusing finger at international banks and brokerage firms. One might also have hoped for a bit more insight into what happened to the billions of dollars that flowed into Argentina during its brief boom years. But Blustein¿s expert analysis (organized around metaphorical references to the musical `Evita¿) says much about the dark side of globalization and points to some severe, apparently recurring problems in the international financial system. Most instructive is his observation that elements of Argentina¿s experience are now apparent in the flow of funds to emerging markets newly favored by international investors. Therefore, this book unfortunately may be a harbinger of things to come.