Monday, July 04, 2011

Positive words from Liaquat Ahamad

This weekend's Barron's has an interview with financial historian Liaquat Ahamad. The 58 year old Cambridge graduate's book, "Lords of Finance: The Bankers Who Broke the World", was a history of central banker's actions in the late 1920's and the 1930's that led to, and exacerbated, the Great Depression. It focused on the central bank heads of the U.S., Germany, France, and England.

The book is a compelling read, and won the Pulitizer Prize for History in 2010 and the Financial Times Best Business Book of the year in 2009. Ahamad, formerly of the World Bank and more recently an investment manager, had as his motivation for writing the book a realization that in current times as well, the late 1990's and the most recent years, who is in charge, the individual people, is crucially important.

The interview mostly reviews some of the key tenets of "Lords of Finance", but in the final parts moves to today. Of these times Ahamad says,

"If you take the whole group of people running the finanical system in 2007, 2008, and 2009 - particularly the trio of Fed Chairman Ben Bernanke, Treasury Secretary Timothy Geithner and his predecessor Hank Paulson - they were slow to appreciate the magnitude of the problem. But once they recognized it, they basically saved the world from a Great Depression. We should build statues to those guys."

The U.S. financial leadership team, in Ahamad's view, led the world away from the abyss. Second guessed frequently, often ridiculed by members of Congress, and always in a tough spotlight, they perservered and are not yet fully recognized, especially in this country, for what they accomplished.

Come on, it's July 4th, and we could stop and consider the necessary decisions that were made and what has been avoided, no matter how challenging the future seems to be. We could even go so far as to acknowledge the support of President's Bush and Obama. Their decisions created or complicated issues at times, but they certainly took some heat for ultimately supporting their Treasury secretaries and financial teams.

I can hear fireworks in the distance, I'm eating a bowl of watermelon, and I face no huge crowds or traffic jams. Maybe next year I'll head back to the East River for the fireworks, they are spectacular, but would the ordeal of getting back be worth it?


Anonymous pks said...

Refreshing comment, with the surfeit of blame that surrounds all financial officials.

1:20 PM  

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