Paul Blustein's And the Money Kept Rolling In (and Out)

I read Paul Blustein’s And the Money Kept Rolling in (and Out) which is about the Argentine economic collapse. A former student, John Hyatt, had really liked it and I thought I would take a look. I enjoyed it, and it’s a quick read, a good way to get an overview of the Argentine implosion.

The book was billed as a critique of the IMF and, to a lesser extent, the Bush administration for the failure to address the situation adequately. Normally, such critiques center on the IMF’s penchant for forcing structural adjustment policies on developing countries. Blustein actually goes the opposite direction, and argues that the IMF should have pulled the plug on loans much earlier than it did, and should have been more insistent that Argentine policy makers abandon the dollar peg (aka “convertibility”) whereby one peso was worth exactly one dollar, and the government guaranteed that anyone with pesos could convert them to dollars at any time.

This conclusion left me a bit unsatisfied. The IMF has been justly criticized for its disastrous policies of the 1980s, when it paid too much attention to economic orthodoxy and almost none to the human cost associated with it. The fact that it granted several emergency loans to Argentina as a way to help Argentine policy makers fix their own problem doesn’t seem quite as sinful to me as he portrays. Obviously, things went very, very wrong, but even Blustein admits that many in the IMF simply wanted to make sure that whatever happened, the decision would be Argentina’s.