Back in the early ’90s, when I was a hustling freelancer struggling to break into the journalism business, I interviewed Marlon Riggs, the gay African-American documentary maker famous for such works as “Ethnic Notions,” “Tongues Untied,” and “Black Is, Black Ain’t.” Riggs was dying of AIDS and as I talked to him over the phone I got the very strong sense that he was razor-focused on not frittering away the time he had left. He certainly didn’t waste a single word to me. He was astonishing — poetic, uplifting, profound.
Imagine my dismay when, shortly after I hung up the phone, I noticed that the pause button on my tape recorder had been pressed down for the entire interview. I could not abide the thought of calling a dying man back and saying, hey, I fucked up, can I have a do-over? I salvaged a few quotes from memory and moved on, humiliated and embarrassed.
Since that day, like many other reporters I know, I have been paranoid about ensuring my recording apparatus has been checked and double-checked. For a few years at the height of the hectic dot-com boom I even carried two tape recorders around with me, just for redundancy. I also took copious handwritten notes, in order to always have a hard-copy backup. There have been a few technical malfunctions along the way, but no major disasters.
Until today, when I discovered to my horror that a terrific interview I conducted this morning with Simon Johnson, the former chief economist of the International Monetary Fund and prominent critic of the Obama administration’s efforts to solve the financial crisis, was effectively untranscribable, due to a user-generated error. As in: I screwed up. To make matters worse, I had almost nothing in the way of notes to fall back upon, because Johnson is a very fast speaker.
No biggie — just a trenchant conversation about the most important economic issue of the day with an extraordinarily articulate and intelligent man. Excuse me while I go jump off a cliff.
I am currently waiting to hear if an audio engineer can salvage something out of my digital file, but I am pessimistic. So here’s what I can remember off the top of my head. I’ll tell you this: Johnson is no wild-eyed bomb-thrower — “I’m not a populist by any means,” he said. He is not reflexively opposed to the Obama administration, he thinks they are doing a lot of good things and inherited a “horrible” situation. He’s willing to give credit where credit is due, as he did earlier today with respect to the Obama administration’s efforts to strengthen the IMF.
He also makes a compelling case for his most crucial point: The Obama administration has failed to articulate a strategy that addresses the core problem afflicting the banking industry — the continued prevalence of institutions that are “too big too fail.” Even if the Geithner “Public-Private Investment Plan (PPIP)” succeeds in taking some toxic assets off of bank balance sheets, it will do nothing, says Johnson, to ensure that the really big banks are broken up into smaller, more manageable entities. So even if we muddle through this crisis, we haven’t fixed anything permanently.
Johnson dismissed the argument that says nationalizing institutions the size of Citigroup or Bank of America is simply too complex to be undertaken as anything other than an absolute last resort as the kind of lame excuse that every government, everywhere, uses any time their banking sector runs into trouble. He also rejected the theory that Geithner’s plan for stress tests and price discovery through the PPIP is really a roundabout way to demonstrate which banks are truly insolvent. It’s usually not a good idea, he said, to be that “devious” when executing economic policy. Furthermore, if the government really was intending to determine which banks were unable to survive it would be conducting stress tests that ran the banks through the wringer by assuming the worst possible future economic conditions, rather than relatively rosy scenarios that few economists think likely.
As for the criticism leveled by Dani Rodrik that I wrote up yesterday? That it was ironic to hear an IMF economist criticizing the relaxation of controls on international capital flows when it had historically been standard advice from the IMF to developing nations to do just that? Johnson dismissed the broadside with a laugh. The bankruptcy of the Washington Consensus is old news, he said. Ten years ago, he said, “we” figured out that free movement of capital across international borders wasn’t a very good idea. “We’ve moved on since then.”
The question is, has Larry Summers?