And the Money Kept Rolling In (and Out) Wall Street, the IMF, and the Bankrupting of Argentinaby Paul Blustein
Pub. Date: 04/04/2006
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… See more details below
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.
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Mr. Blustein's book was our companion as we traveled through Argentina in the winter (their summer) of 2014. Written a decade ago, this book provided us with insights into the Argentine economy of today. The Argentine people have lived through so much economic calamity and this is still continuing. Back in 1991, the country was suffering from staggering rates of inflation, when Economy Minister Domingo Cavallo asked the president to ask the congress to pass the convertibility law. The new law guaranteed that the central bank would exchange pesos for dollars at the rate of one peso, one dollar. With convertibility in place, Argentina's inflation fell during the 1990s and the economy grew and money poured in from abroad. Then in 1999, the system began to come apart and in late 2001, the collapse came. Mr. Blustein tells the story of the rise and fall of the Argentine economy with clarity and thrilling suspense. He includes the role of the IMF, a major player in the drama. In the process, he provides an excellent view into the inner workings of the IMF. He also describes the role of rogue creditors in complicating the process for countries to restructure their foreign debt. He ends with suggestions for reforms in the operation of the IMF to reduce the pain of country defaults and debt restructuring and some cautionary notes about the parallels between Argentina and other nations, even the USA! We finished the book, wishing that Mr. Blustein would write a sequel to tell the continuing of Argentina's economy in the context of story the global events from 2004 until today
Good read if you're interested in the topic. Good look into the inner workings of the IMF. Breaks a few standard narratives, like that Argentina is corrupt and was looking for a quick buck by defaulting, that the IMF was directing Argentina to crisis, and that finance can be self-regulating. Semitechnical, in that I don't have a background in finance, just economics and an interest in the topic, and I was pretty much able to understand everything.
A great book that provides a thorough historical perspective on the Argentinian crisis. Technical enough with a well written page turner approach. The timeliness of this book is perfect for the crisis unfolding in the Euro zone. Read it, understand it, and become aware of the crisis that may be looming.
Paul Blustein does manage to turn the story of Argentina's financial meltdown into a page-turner. He is scrupulously fair in assigning blame where it is due - all around-(great journalistic instincts)and in analyzing the strengths and weaknesses of all the players. His prescriptions for IMF reform at the end of the book are a bit too 'pie-in-the-sky' but make lots of sense.