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And the Money Kept Rolling In (and Out) Wall Street, the IMF, and the Bankrupting of Argentina | 
 enlarge | Author: Paul Blustein
Publisher: PublicAffairs
Category: Book
List Price: $15.00
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Rating:  18 reviews
Sales Rank: 47022
Media: Paperback
Pages: 304
Number Of Items: 1
Shipping Weight (lbs): 0.8
Dimensions (in): 8.2 x 5.5 x 0.8
ISBN: 1586483811
Dewey Decimal Number: 330.98207
EAN: 9781586483814
ASIN: 1586483811
Publication Date: April 3, 2006
Availability: Usually ships in 1-2 business days
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Condition: Excellent, unmarked softcover. No spine crease or cover curl. No remainder mark.
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Amazon.com
It's not often--or maybe ever--that a book steeped in emerging-market economic theory reads like a thriller. But And the Money Kept Rolling In (and Out) has cliffhangers and plot twists equal to a detective's tale, as Paul Blustein chronicles the spectacular rise and fall of Argentina's economy at the turn of the 21st century. The book has its flaws, of course, including the author's insistence on using goofy metaphors from the overripe Andrew Lloyd Webber musical Evita (from which the book takes its awkward title). But by and large, Blustein, a staff writer at the Washington Post, tells a cynic's tale of greed run amok on a massive scale. While policy wonks at the International Monetary Fund had much to do with Argentina's implosion, Blustein also holds the country's own government responsible. Conventional wisdom says that the influence of the world's investors keeps everyone in line--a key tenet of the pro-globalization argument--but in practice, Blustein writes, "foreign funds numbed Argentine policymakers into minimizing the perils of their policies. The effect was similar to a dose of steroids, giving the economy a short-term boost while insidiously increasing the risk of a breakdown in the long run." From that point on, only devastation lay ahead for many average Argentineans, who could no longer remove savings from their banks, and for international investors, who saw their returns vanish in a flash. Blustein effectively makes the case that Argentina wasn't a rare example or a perfect storm of problems, but--bearing "striking parallels" to Enron and other financial scandals of the era--a preview of more meltdowns to come. It's a compelling cautionary tale well worth telling. --Jennifer Buckendorff
Product Description
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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| Customer Reviews: Read 13 more reviews...
What happened to Argentina? December 26, 2005
Etienne ROLLAND-PIEGUE (Tokyo, Japan)
23 out of 23 found this review helpful
In his previous book The Chastening, Paul Blustein went on a quest to understand what happened to the Asian economies hit by the currency and financial maelstrom that began with the collapse of the Thai baht in July 1997. Although he did not refrain to point out the costly mistakes that were made in responding to the crises, his purpose was not to distribute blame, but to understand what had happened and to share his sense of awe that such crises might unfold again.
Four years later, Paul Blustein is back at it, but his "indignation quotient", as he states in the introduction, is substantially higher. According to him, the Argentina debacle of 2001-2002 not only illustrates the risks inherent in modern international finance, but it also provides a damning case of personal hubris, unrestrained greed and institutional myopia in which the international community particularly "blew it". Charting the course that started with the adoption of a new currency tightly tied to the dollar in 1991 and with the subsequent growth episode that followed, he describes the mounting imbalances that resulted from the massive capital inflows led by international investors whose irrational exuberance went mostly unchecked by the IMF. This complicity of government officials, Wall Street investors and Washington money watchmen in creating a bubble was further aggravated by the incapacity of policy makers and their international advisers to provide an exit strategy to the convertibility regime and to secure a soft landing or at least minimize the impact of the financial meltdown for the population. Indeed, Blustein makes the case that the protracted rescue effort orchestrated by the IMF and the US Treasury only prolonged Argentina's agony and made the crash all the more devastating in the end.
Blustein bases his case on extensive interviews with all the most important players, including Argentine's Minister of Economy Domingo Cavallo and IMF Managing Director Horst Kohler. He also had access to a trove of documents, including internal memos, confidential reports and notes meetings, and seems to have read them all. At every juncture, he reconstructs the internal debates, spells out the policy choices, and weighs the pros and cons that were advanced by the main institutional actors at the time when the decisions were taken and in retrospect. But Blustein is not just a journalist who writes well, works hard, and knows how to get sources to talk. He also knows the professional literature on financial crises and clearly has a solid understanding of the fundamental debates on the subject. The accusations that he wields to the international financial community are therefore to be taken seriously.
Blustein makes amply clear that Argentina's woes were first and foremost the result of the country leaders' own wrongdoings: they spent more than they should have, taxed less than they should have, and borrowed more than they should have, all the while keeping a currency system that required much stricter fiscal discipline. They failed to see the writing on the wall and clung to the one on one dollar parity until the financial hemorrhage wreaked havoc with the banking system, wiped out people's life savings and inflicted massive damage on the economy.
But the international financial community, especially global investors and, to a lesser extend, IMF and Treasury officials, also share part of the blame. First, Blustein makes the by now familiar case that conflicts of interests and skewed incentives among investment managers propelled an excessive amount of short term capital toward Argentina without due consideration for the risks involved. Particularly infamous is the megaswap deal that Wall Street peddled to the government in June 2001 and that further aggravated the country's debt burden while generating hefty fees for the banks involved.
The IMF, for its part, demonstrated "a failure of intellectual courage," in the words of its former chief economist Michael Mussa. It used Argentina as a poster child when it should have begun to send warning signals to the authorities, based its growth projections on rosy assumptions, clung to a voluntary approach of debt restructuring when it should have facilitated an orderly workout, doubled a losing bet when it extended a second loan package which conditions were clearly not sustainable, failed to provide contingency planning and delayed the day of reckoning when the dollar parity had to be abandoned. At nearly steps of the way, claims Blustein, the crisis could have been mitigated even if it could not have been prevented.
To the credit of the IMF, one must nonetheless recognize that each decision was hotly debated at the time, that all the moves were endorsed if not sometimes dictated by the US and the other G7 countries, and that the institution took the blame and repented openly in a series of evaluation reports.
Especially troubling is Blustein's contention that the rules of the globalization game are rigged and that countries like Argentina are given false hopes that they can join the league of rich industrialized countries only to be denied access at the last moment and be cast back into poverty in a most cruel and painful way. If such a bias exists, then the system is in urgent need of fixing.
When the Piper Needs Paying March 8, 2005
John Matlock (Winnemucca, NV)
15 out of 23 found this review helpful
I was first intrigued by the title of this book as it is also the title of a song in Andrew Lloyd Weber's play Evita. In the play, the money comes in from Eva Peron's actions in setting up a charity and getting the money from the rich landowners (and quite possibly from the Germans Nazi's wanting to move to Argentina to escape trial and punishment at the Nurnburg trials).
In this book though, the money is coming from the International Monetary Fund, the World Bank, and Wall Street. And the money was coming in amounts that Eva couldn't have imagined. The catch was that this money was coming in as debts. It was being spent in ways that were not productive enough to pay off the debts. More money could be borrowed and used to pay the interest creating a spiral that was never ending.
But all such things eventually end. And one day the IMF turned its back on Argentina. This is the story of what happened.
Informative Look at a Financial Disaster May 29, 2005
Michael Lima (Fresno, California USA)
15 out of 19 found this review helpful
After finishing And The Money Rolled In, I recalled the observation that, despite appearances, catastrophes don't happen spontaneously. Instead, they are usually the result of a series of small mistakes that compound to become memorably devastating events. Blustein must have recalled the same observation, because he spends critical time and effort documenting the "small" mistakes behind the Argentine default. In doing so, he exposes the greed, stubbornness, and political cowardice that combined to make this maelstrom as devastating as it was. Blustein also takes great lengths to point out that these emotions are still prevalent in both financial markets and seats of government, thereby making another Argentina-like financial collapse more of an inevitability than a fluke.
This book works on all levels. It's a thorough analysis of (arguably) the largest financial crisis in recent history; a cautionary tale with solutions to avoid a repeat of the crisis; and an accessible, entertaining read. Given these qualities, it's very likely that And The Money Rolled In will join Secrets Of The Temple by William Greider as one of the definitive texts to shed light on the integration between financial markets and government fiscal policy.
Accurate and entertaining review of Argentine debt crisis October 10, 2005
J. Douglas Newsome (New York, NY)
9 out of 10 found this review helpful
I ran a Latin American capital markets desk in NYC during this crazy time in Argentina, so I am intimately familiar with what Paul Blustein has written about. His book is a very fair and balanced account of what, why and how it happened without resorting to sensationalized story telling.
I highly recommend it for anyone who wants to understand what happened in Argentina or the IMF.
Packed with Knowledge! October 14, 2005
Rolf Dobelli (Luzern Switzerland)
8 out of 9 found this review helpful
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.
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