And the Money Kept Rolling In(And Out)
Paul Blustein
(Reviewer - Rebecca Brown)
2005 PublicAffairs
ISBN: 1586482459

Wall Street, the IMF, and the Bankrupting of Argentina.

The dramatic 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 appaluded than Argentina for its efforts to join the club of wealthy nations. Argentina's policies drew enthusiastic applause from the IMF, the World Bank & Wall Street. However, the club has a disturbing propensity to turn its back on its new members, & cast them out.

That was what happened in 2001, when Argentina went over the economic brink, resulting in instant social & political chaos, the collapse of its peso, throwing millions into poverty, with a quarter of its workforce out of work.

Paul Blustein, whose book about the IMF, The Chastening, was called “gripping, often frightening” by The Economist & lauded by The Wall Street Journal as “a superbly reported and skillfully woven story,” now does the same for Argentina, chronicling its rise & fall, based on hundreds of interviews with top policymakers & 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, & exposes the conduct & scandals of global financial market players in Argentina -- like Enron, WorldCom & Global Crossing in the USA.. By going behind the scenes of Argentina's debacle, Paul Blustein clearly follows the trail of broken promises, missed oportunities, cultural misunderstandings, & how sadly elusive is the path of hope & progress for the great bulk of humanity still mired in poverty & underdevelopment.

That having been writ, And the Money Kept Rolling In(And Out) is both an easy & tough book to tackle. Paul Blustein's writing is impeccable, conversational, & filled with fascinating insider glimpse of world economics, & the great crap shoot in the highest monetary eschelons. What a crowd, & to whom do they answer?

In his Prologue he takes us Up, Up, and Away on an IMF mission to Argentina in November 2001. Everything looked like all previous trips: usual hotel; usual chauffeuring around; usual setting up of office space, usual meetings with the Ministry of Economy. This mission, however, was anything but usual. Argentina was having trouble meeting the terms of its $22 billion loan package from the IMF, & global financial markets were panicking over the prospect that the IMF's golden, new club member, might not be able to meet its mark. That the IMF might withhold its approval of an extension. They were right to panic.

What happened next was spectacular. “...the country descended into anarchy... people throng[ed] the Plaza de Mayo banging pots and pans... mobs loot[ed] shops and sack[ed] government buildings all over the country, resulting in so much mayhem... that President de la Rua was forced to resign...” (P.1) What drove a thriving, industrious, relatively modern & socially stable nation to fall apart?

Come revisit Argentina's history, laid out in broad strokes, as too the structure of its society, & economy. The chapter titles read like arrows pointing to this stampede over the brink:
 • Globilization's Big Bust: it is crucial to understand how global markets & institutions helped lay Argentina low.
 • “This May Not Be Paradise”: sewing the seeds of destruction.
 • Who's Afraid of the Molotov Cocktail? : What is the IMF, & was is real & not so real money?
 • Enronization: what people will do for bonuses on Wall Street.
 • Show Me the Money: IMF offers a bailout (blindaje) loan, & the clock starts ticking.
 • Robbing Pedro to Pay Pablo: enter a miracle worker, & the phrase “country risk” comes into play.
 • Doubling on a Losing Bet: low-ranking American official meets an Argentinian president. One guess as to which holds the fate of the other's country in his hands.
 • Regime Change, Ready or Not: same game, new deck.
 • A Pit Too Deep: of monumental dimensions & the speed with which a country descends from its state of grace.
 • Don't Cry for Them, Argentina: the IMF is only human, & investors love to roll the dice in emerging markets, & cash in when the going gets rough.
& for good measure a Chronology is included, plus extensive notes.

Paul Blustein concludes: “If the lessons of Argentina's crisis lead to substantial revisions in the rules of global finance, the suffering of the Argentine people will not have been entirely in vain. Timidity and inaction by the internaional community, on the other hand, would add insult to Argentine's injury... [f]or the powers that run the global economy, it is a matter of both simple justice and enlightened self-interest to ensure that the rewards of free markets are spread more widely, more steadfastly...” (P.235)

I understood a quarter, well maybe a hundredth of the economic sleights-of-hand, however, I very much “got” the human tragedy inside this unique look at a country's collapse. And the Money Kept Rolling In(And Out) is mezmerizing reading.

Paul Blustein is a staff writer for the Washington Post covering business & economic issues for more than 25 years. He has also worked at Forbes Magazine & the Wall Street Journal.

More from Paul Blustein:
The Chastening: Inside the Crisis That Rocked the Global Financial System and Humbled the IMF.
(08/28/05)

Rebecca