May 10th, 2014

_The Alchemists_, Neil Irwin

Subtitled: Three Central Bankers and a World on Fire

I keep wondering if maybe this guy is related to a good friend of mine, based purely on that last name. Not really relevant. Anyway.

This came out about a year ago; I bought it last August and then didn't read it. Not sure why I finally decided to give it a go, other than that I've had good luck with non-fiction lately which tends to give me some momentum for more. It's a long book, even when you discount the end notes, but it moves along quickly because Irwin tells the story very much as a story of People. The three central bankers of the subtitle are Ben Bernanke, Mervyn King (of the Bank of England) and Jean-Claude Trichet of the ECB. As with some other books I've been reading, I was an interested adult paying attention as the events covered in this book occurred, so some of what is contained within was already familiar to me.

But mostly, Irwin managed to get everyone but the Germans to talk to him. Extensively. I don't know if that's because the cables released by wikileaks sort of made everyone decide there wasn't much left to lose and this was a great chance to frame their legacy or what. Probably what: there are a lot of indications that Irwin is the sort of guy you want to tell your story to. He'll be accurate and sympathetic, which is an unusual combination. By sympathetic, I mean he'll explain why the person did what they did -- what the actor's value system was and how their choices fit within it. Obvs, the reader may be headdesking madly while reading about Mervyn King or Axel Weber or whatever, but it won't be because Irwin _told_ them to headdesk; it'll be because the reader is a Sensible Person. The few exceptions (the open contempt Irwin displays when describing Sarkozy and Merkel's little walk along the beach) are kind of hard to argue with.

The plot is straightforward. As a result of the full flowering of securitization, insurance and financialization of lending (notably mortgages, but in general), the most recent economic bust was more comprehensive and difficult to recover from than recent busts, comparable to events like the Great Depression, 1907 and similar. Because the dollar is the reserve currency for most of the world, it was particularly important that the US Get It Right after the crash, and we (mostly) did (eventually) (thank you, Ben). Because holding sterling denominated debt (gilts) is largely optional, Mervyn King's options were somewhat constrained, however, his theory-orientation and general pigheadedness led him into a bunch of foolishness which was probably avoidable but not necessarily catastrophic. Irwin's main contribution to the usual presentation is to argue that Jean-Claude Trichet's repeated runs right up to the brink of disaster -- which largely seemed like madness at the time -- were in fact calculated attempts to pressure European political figures into taking fiscal action. Irwin then largely undoes a lot of his success at this argument by presenting Mario Draghi as tackling the rest of the same situation and generally being much more effective at it by taking a different approach to personal interactions with political figures. This is not to suggest Irwin is wrong -- likely he is just making the same damn point over and over and over again, which is that monetary folk can and must do some things, but the politicians must do other things -- and both groups are better served by genuinely listening to stakeholders, making sure everyone is actually heard, considering what they have to say, and then presenting a plan that can be accepted by enough/all. Also, that all Germans other than Angela Merkel are Not Helpful when it comes to a Europe-wide financial crisis, and she's questionable.

It's weirdly touchy-feely good in a book that's all about international money flows.

I particularly liked that Irwin really seemed to understand why the Euro is so important to Europe. Few commentators in the US really grasp this (Paul Krugman in particular is just inadequate on the topic, which always makes me cranky and sad, because I want him to Get It).

I hesitate to suggest you run right out and read the book, because were you paying attention to what I said it was about? Central banking? Seriously? But if you think you could slog through it, give it a go. Irwin writes engagingly, and the people-focus (while it initially made me very suspicious) turns out to work both as an analysis and as a story.

Today's Activities Include: babysitter, bike rides, genealogy meeting

T. has been negotiating separately with our regular babysitter. She keeps telling him that he has to go through us to arrange to have her come over. T.'s not really buying it. It's sort of hilarious. In any event, as a result of his efforts, A. and T. went with her for a few hours in the middle of the day: Johnny Rockets, a visit to some babies, etc. Meanwhile, R. went on a nice long bike ride and I went down to Sudbury for Massog Middlesex's monthly meeting, which included a really excellent presentation about genealogy and the cloud. And next month is going to be Dick Eastman, here in Acton and my son has already lined up a babysitter for himself and his sister. Really, my life is complete at this point. ;-)

T. and R. went on a bike ride; they got drizzled on but not struck by lightning or anything bad like that. Then they went to McD's. Meanwhile, M. came over for a brief visit, and A. watched more Phineas & Ferb. She didn't notice M.'s departure and was grief stricken when she realized that M. was gone. I decided what this Really Meant was I Need More Mama Time, so I stretched out on the chaise, put her on my lap and we watched Phineas & Ferb together. She settled right down as we laughed hysterically, pointed out (repeatedly) sightings of the Giant Baby Head and sang along with the theme song. Good Times.

I'm currently reading Alfie Kohn's latest book, _The Myth of the Spoiled Child_, which I of course cannot help but agree with relentlessly because, Alfie Kohn and, duh, tone of typical parenting article/book/screed. It is So Strange that after 20 years of reading Kohn (and Howard Gardner and a host of other people who I discovered more recently, but still some years ago, like Lawrence Cohen, Ross Greene), I now realize how many of them live in Boston Metro. With very little effort, I could probably go to a presentation once a month from someone whose books I'd been familiar with for one or more decades, without traveling more than 30 miles. I don't (because I have small children, and they get all clingy if I'm never home, plus, guilt!), but I could.