by Neil Irwin
On an air force jet: Ibid., 116.
“The Anguish of Central Banking”: Arthur F. Burns, “The Anguish of Central Banking,” lecture, Per Jacobsson Foundation Lectures, Belgrade, September 30, 1979.
“Scylla and Charybdis have now come together”: “Meeting of the Federal Open Market Committee,” transcript, Board of Governors of the Federal Reserve System, Washington, DC, October 6, 1979.
“I said he would remember the press conference”: Joseph R. Coyne, “Reflection on the FOMC Meeting of October 6, 1979,” Federal Reserve Bank of St. Louis Review 87, no. 2 (March/April 2005): 313.
“Burns smoked a pipe”: Peter T. Kilborn, “Already a New Look at a Legend,” New York Times, January 24, 1988.
“The Credit Crunch Is On”: David Pauly et al., “The Credit Crunch Is On,” Newsweek, March 31, 1980, 52.
In 1981, one man who said he was upset: Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend (Hoboken, NJ: John Wiley & Sons, 2000), 6.
“premeditated and cold-blooded murder”: Ibid.
CHAPTER 6: SPINNING THE ROULETTE WHEEL IN MAASTRICHT
“probably one of the world’s most unsuccessful diplomatic missions”: Gilbert Kaplan, “Mad about Music,” June 6, 2004, radio broadcast, transcript, http://www.wqxr.org/#!/programs/mam/2004/jun/06/.
“Go for the jugular”: Sebastian Mallaby, More Money Than God: Hedge Funds and the Making of a New Elite (London: Penguin Press, 2010), 161.
“Massive speculative flows”: Larry Elliott, Will Hutton, and Julie Wolf, “Pound Drops Out of ERM,” Guardian, September 17, 1992, 1.
In the first century AD: Otmar Issing, The Birth of the Euro (Cambridge: Cambridge University Press, 2008), 3.
“The solidarity in production thus established”: “The Schuman Declaration—9 May 1950,” European Union, http://europa.eu/about-eu/basic-information/symbols/europe-day/schuman-declaration/index_en.htm.
“Not all Germans believe in God”: Ibid., 23.
“Today, as far as I know”: Mary Elise Sarotte, 1989: The Struggle to Create Post–Cold War Europe (Princeton, NJ: Princeton University Press, 2009), 37.
At 10:30 p.m.: Ibid., 43.
“destiny today is that Germany can only exist in a united Europe”: Karl Jaspers and Hannah Arendt, Correspondence, 1926–1969 (New York: Mariner, 1993), 17.
On December 3, 1991: Kenneth Dyson and Kevin Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union (Oxford: Oxford University Press, 1999), 202.
“It’s done now”: Sarah Lambert, “Mozart Ushers in New Dawn at Maastricht,” Independent (London), February 8, 1992, 9.
“It can’t happen”: Rudiger Dornbusch, “The Euro Controversy,” MIT Department of Economics Editorial, 2001.
In 2005, Alabama paid: “Federal Taxes Paid vs. Spending Received by State,” Tax Policy Center, October 19, 2007, http://taxfoundation.org/tax-topics/federal-taxes-paid-vs-spending-received-state.
The bailout of savings and loans: Timothy Curry and Lynn Shibut, “The Cost of the Savings and Loan Crisis: Truth and Consequences,” FDIC Banking Review 13, no. 2 (December 2000), 26–35.
Losses in Texas: FDIC Division of Research and Statistics, History of the Eighties, vol. 1, An Examination of the Banking Crises of the 1980s and early 1990s, 183, http://www.fdic.gov/bank/historical/history/vol1.html.
In 2007 . . . 787,000 more Americans relocated from the Northeast to the South: Michael Keegan and Stephen Rountree, “Map: U.S. Migration Flows,” Pew Research Center, December 17, 2008, http://www.pewsocialtrends.org/2008/12/17/u-s-migration-flows/.
Barry Eichengreen: Barry Eichengreen, “One Money for Europe? Lessons from the U.S. Currency Union,” Economic Policy 5, no. 10 (1990): 117–87.
“In the beginning there would be important disagreements”: Martin Feldstein, “EMU and International Conflict,” Foreign Affairs, November/December 1997, 60.
“Here’s how the story has been told”: Paul Krugman, “The Euro: Beware of What You Wish For,” Fortune, December 1998.
“The European Commission did invite economists”: Eduardo Porter, “A Tempting Rationale for Leaving the Euro,” New York Times, May 16, 2012, B1.
On November 3, 1997: Lionel Barber, “The Euro: Single Currency, Multiple Injuries: Lionel Barber Recounts the Race for the ECB Presidency and the Price of Chirac’s Insistence on a Frenchman,” Financial Times, May 5, 1998, 2.
“Who is this man”: Alastair Campbell, The Blair Years: Excerpts from the Alastair Campbell Diaries (London: Hutchinson, 2007), 299.
“the most difficult hours I have experienced in Europe”: Katherine Butler, “Blair Seals Backroom Deal over Presidency of Central Bank but Experts Fear Ferocious Row Could Ruin Currency’s Credibility,” Independent (London), May 4, 1998.
CHAPTER 7: MASARU HAYAMI, TOMATO KETCHUP, AND THE AGONY OF ZIRP
“Extreme policy mistakes were the primary cause”: Ben S. Bernanke, “Comment on America’s Historical Experience with Low Inflation,” Journal of Money, Credit, and Banking 32, no. 4 (November 2000, Part 2), 995.
It was calculated that the garden around the Imperial Palace: Richard Werner, Princes of the Yen: Japan’s Central Bankers and the Transformation of the Economy (Armonk, NY: M. E. Sharpe 2003), 89.
Loan officers would even show up: Ibid., 96.
“He was called Pope”: Ibid., 62.
“Japan does not need any more steel”: Ibid., 61.
In one story that made its way around the Bank of Japan: Richard C. Koo, The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession (Hoboken, NJ: John Wiley & Sons, 2009), 237.
Bernanke acknowledged this reality in a 2002 speech: Ben S. Bernanke, “Making Sure ‘It’ Doesn’t Happen Here,” remarks, National Economists Club, Washington, DC, November 21, 2002, http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm.
“Purchasing Japanese government bonds can’t be an option”: Alexander Urquhart, “BOJ Resists Government Bond Fund Scheme,” South China Morning Post, February 12, 1999, 5.
“To this outsider”: Ben S. Bernanke, “Japanese Monetary Policy: A Case of Self-Induced Paralysis,” paper, ASSA Meetings, Boston, January 9, 2000.
“We are getting closer to the stage”: “End to Deflation Fears Nearing, BOJ Chief Says,” Japan Times, May 20, 2000.
“The decision to end the zero-interest-rate policy was not wrong”: “BOJ Adopts Quantitative Monetary Easing Policy,” Daily Yomiuri (Tokyo), March 20, 2001, 1.
“It was a very difficult decision to make”: Mayumi Negishi, “Hayami Says Jesus Guided Him through Five-Year Ordeal,” Japan Times, March 20, 2003.
“Does an economy with a zero nominal interest rate”: Alan S. Blinder, “Monetary Policy at the Zero Lower Bound: Balancing the Risks,” Journal of Money, Credit, and Banking 32, no. 4 (November 2000), 1093.
“I promise”: Kazuo Ueda, “Japan’s Experience with Zero Interest Rates,” Journal of Money, Credit, and Banking 32, no. 4 (November 2000), 1107.
CHAPTER 8: THE JACKSON HOLE CONSENSUS AND THE GREAT MODERATION
“It’s a very unusual day for an economist”: “Queen Knights Fed Chairman Greenspan,” Associated Press, September 26, 2002.
“What time of year are you going to hold it?”: Tim Todd and Bill Medley, In Late August (Kansas: Federal Reserve Bank of Kansas City, 2011).
Volcker quickly became a regular: Eric Gelman, “America’s Money Master,” Newsweek, February 24, 1986.
New York Times columnist Paul Krugman: Paul Krugman, “Pre-reading for Jackson Hole,” Conscience of a Liberal (blog), New York Times, August 25, 2011.
Don Kohn Death March: Jon Hilsenrath, “The Path of Kohn: Crisis Changes a Fed Vet,” Wall Street Journal, April 11, 2009.
At Jackson Hole, two top academic economists: Charles R. Bean, with Alan Blinder and John Ta
ylor, “Monetary Policy After the Fall,” paper presented and remarks, 2010 Economic Policy Symposium, Jackson Hole, WY.
“South Florida is working off a totally new economic model”: Motoko Rich and David Leonhardt, “Trading Places: Real Estate Instead of Dot-Coms,” New York Times, March 25, 2005.
On the sunny Mediterranean coast of Spain: “In Come the Waves,” Economist, June 16, 2005.
In 1980 . . . By 2005: Federal Reserve Statistical Release, accession number Z.1.B.100.eB.100, http://federalreserve.gov/releases/z1/; Bureau of Economic Analysis, “Gross Domestic Product,” http://bea.gov/national/index.htm#gdp.
In Spain, for example: Ricardo Gimeno and Carmen Martinez-Carrascal, “The Interaction between House Prices and Loans for House Purchase: The Spanish Case,” working paper, Banco de España, 2006, http://ideas.repec.org/p/bde/wpaper/0605.html.
“global savings glut”: Ben Bernanke, “The Global Saving Glut and the U.S. Current Account Deficit,” remarks, Sandbridge Lecture, Virginia Association of Economists, Richmond, VA, March 10, 2005.
In the United States alone: SIFMA database (U.S. corporate issuance data), http://www.sifma.org/research/statistics.aspx.
There were, by 2007, $202 trillion in financial assets on earth: Charles Roxburgh, Susan Lund, and John Piotrowski, Mapping Global Capital Markets 2011, McKinsey Global Institute, August 2011, 2, http://www.mckinsey.com/.
“elements of buoyancy”: Jean-Claude Trichet, interview with Financial Times, May 14, 2007, http://www.ecb.eu/press/key/date/2007/html/sp070518.en.html.
“It’s pretty clear there is an unsustainable underlying pattern”: Edmund Andrews, “Greenspan Is Concerned about ‘Froth’ in Housing,” New York Times, May 21, 2005.
The joke that went around London financial circles: “Old Lady Is Dazed and Confused,” Guardian City Pages, August 18, 2005.
“Hardly a day goes by”: “Meeting of the Federal Open Market Committee,” transcript, Board of Governors of the Federal Reserve System, Washington, DC, June 29–30, 2005.
“Neither borrowers nor lenders appear particularly shaky”: Ibid.
“Not in the United States”: Ibid.
“I offer one more piece of evidence”: “Meeting of the Federal Open Market Committee,” transcript, Board of Governors of the Federal Reserve System, Washington, DC, December 13, 2005.
“the apparent consequence of a long period of economic stability”: Alan Greenspan, “Opening Remarks,” Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, WY, 2005.
Raghuram Rajan: See, for example, the documentary Inside Job.
“I’d like to tell you about the Millennium Bridge in London”: Hyun Song Shin, “Commentary: Has Financial Development Made the World Riskier,” Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, WY, August 2005.
CHAPTER 9: THE COMMITTEE OF THREE
“It does not appear possible”: Robert J. Shiller, “Understanding Recent Trends in House Prices and Homeownership,” Federal Reserve Bank of Kansas City Economic Symposium, August 31, 2007.
“I am convinced”: Jean-Claude Trichet, “Europe: Cultural Identity,” speech, Center for Financial Studies, Frankfurt, March 16, 2009.
“It was . . . a very emotional moment”: Corinne Lhaik, “Interview with Jean-Claude Trichet,” L’Express, September 29, 2004, http://www.ecb.int/press/key/date/2004/html/sp041009.en.html.
By late afternoon: Jack Ewing, “A Fight to Make Banks More Prudent,” New York Times, December 20, 2011, B1.
“Crisis is part of his DNA”: Krista Hughes, “How Jean-Claude Changed the ECB,” Reuters, November 9, 2010.
“With slightly condescending flattery”: David Marsh, The Euro: The Battle for the New Global Currency (New Haven, CT: Yale University Press, 2009), 220.
“My life compass”: James G. Neuger and Simon Kennedy, “Trichet Life Compass Points to Euro at Center of European Unity,” Bloomberg News, June 7, 2010.
“there were Jews up in Boston”: David Wessel, In Fed We Trust: Ben Bernanke’s War on the Great Panic (New York: Crown Business, 2009), 70.
“If you had known Ben Bernanke as a student”: Rich Miller and Jennifer Ryan, “Europe Crisis Rescue Begins with MIT Men as a Matter of Trust,” Bloomberg News, January 12, 2012.
“he would look at the numbers”: Ben White, “Bernanke Unwrapped,” Washington Post, November 15, 2005.
He talks baseball with Lenny Gilleo: Kai Ryssdal, “The Man Who Makes Ben Bernanke Look Good,” Marketplace, American Public Radio, April 17, 2012, http://www.marketplace.org/topics/life/final-note/man-who-makes-ben-bernanke-look-good.
“incredibly stubborn . . . exasperating”: Alistair Darling, Back from the Brink: 1000 Days at No. 11 (London: Atlantic Books, 2011), 14.
“as an autocratic fiefdom of the Governor”: Ibid., 70.
“Before the crisis”: Chris Giles, “The Court of King Mervyn,” Financial Times Weekend Magazine, May 5–6, 2012, 17.
“fusse[d] . . . about who has turned up”: Ibid., 17.
“I think the role of conductor”: “Mervyn King,” Mad about Music, WQXR, June 6, 2004, http://www.wqxr.org/#!/programs/mam/2004/jun/06/.
CHAPTER 10: OVER BY CHRISTMAS
“You don’t want to be the ones in the end of the queue”: “Customers queue at Northern Rock,” YouTube, accessed April 15, 2012, http://www.youtube.com/watch?v=EyVk8EI6asQ.
“They’re behaving perfectly rationally”: Alistair Darling, Back from the Brink: 1000 Days at Number 11 (London: Atlantic Books, 2011).
Known before 1997 as the Northern Rock Building Society: “Run on the Rock,” Treasury Select Committee of the House of Commons Report I, January 24, 2008.
When Northern Rock needed cash: Ibid., 48.
“During the conference call”: Darling, Back from the Brink.
“febrile and fevered atmosphere”: “Run on the Rock,” 63.
“Your guy Mervyn has a high pain threshold”: Darling, Back from the Brink, 28.
As economist Hyun Song Shin . . . explained: Hyun Song Shin, “Global Banking Glut and Loan Risk Premium,” paper, 12th Jacques Polak Annual Research Conference, International Monetary Fund, November 10–11, 2011.
The list of those borrowing substantial amounts: “Term Auction Facility lending details,” Federal Reserve Board, December 1, 2010, http://www.federalreserve.gov/newsevents/reform_taf.htm.
“We think it is a right way to cooperate”: European Central Bank Press Release Database, bond purchase data, http://www.ecb.int/press/.
“What appears to be in substance”: John Brinsley and Anthony Massucci, “Volcker Says Fed’s Bear Loan Stretches Legal Power,” Bloomberg News, April 8, 2008.
“Television dramas”: Jean-Claude Trichet, “President’s Address,” speech, ECB and Its Watchers IX Conference, Frankfurt, Germany, September 7, 2007, http://www.ecb.int/press/key/date/2007/html/sp070907.en.html.
“We exchanged many opinions”: Jean-Claude Trichet, press conference, June 8, 2008, http://www.ecb.int/press/pressconf/2008/html/is080605.en.html.
“We are solemnly telling all economic agents”: Jean-Claude Trichet, press conference, July 3, 2008, http://www.ecb.int/press/pressconf/2008/html/is080703.en.html.
To Geithner, the proposal seemed “gimmicky”: Anton R. Valukas, Lehman Brothers Holdings Inc. Chapter 11 Proceedings Examiner Report 8 (2010): 12.
“raise significant concerns”: Scott Alvarez, “Re: Lehman Good Bank/Bad Bank idea discussed last night,” e-mail message to Kieran Fallon, July 15, 2008, obtained by Financial Crisis Inquiry Commission, http://fcic.law.stanford.edu/resource.
“That’s not to imply”: Patrick M. Parkinson, “Re: Fw: Our Options in the Event of a Run on LB,” e-mail message to Scott Alvarez et al., July 21, 2008.
“If we think that the run had progressed too far”: Joseph Sommer, “Re: another option
we should present re triparty,” e-mail message to Jamie McAndrews et al., July 13, 2008.
“We thought a year ago”: Treasury Committee Hearing on Bank of England, August 2008 Inflation Report (Sept. 11, 2008), http://www.parliament.the-stationery-office.co.uk/pa/cm200708/cmselect/cmtreasy/uc1033-i/uc103302.htm.
“financial-market correction”: Jean Claude Trichet, speech, 2008 Eurofi Conference, Nice, France, September 11, 2008, http://www.ecb.int/press/key/date/2008/html/sp080911_2.en.html.
CHAPTER 11: A WALL OF MONEY
“The failure of AIG”: Ben Bernanke, lecture, George Washington University, Washington, DC, March 27, 2012, transcript by Federal News Service.
a more apt comparison was with popcorn: Edward P. Lazear, “The Euro Crisis: Doubting the ‘Domino’ Effect,” Wall Street Journal, October 31, 2011.
“We came very, very close”: Michael Grunwald, “Person of the Year 2009,” Time, December 16, 2009.
“conjured up trillions of new dollars”: Ibid.
“Irish bank deposits are not in any danger”: Aine Hegarty, “Don’t Panic! Finance Minister Moves to Allay Savings Fears of Bank Customers,” Mirror, September 20, 2008.
The Fed also pumped dollars into individual foreign banks: Bloomberg News database, lending data, http://www.bloomberg.com/data-visualization/federal-reserve-emergency-lending/.
“I don’t really understand”: Andrew Ross Sorkin, Too Big to Fail: How Wall Street and Washington Fought to Save the Financial System—and Themselves (New York: Viking, 2009), 526.
The TARP was among the most unpopular programs . . . ever undertaken: Karlyn Bowman and Andrew Rugg, “TARP, the Auto Bailout, and the Stimulus: Attitudes about the Economic Crisis,” American Enterprise Institute, May 2010, http://www.aei.org/files/2010/04/22/EconomicCrisis-2010.pdf.
“You must save your banks”: “Trichet orders Lenihan ‘Save your banks at all costs,’” YouTube, http://www.youtube.com/watch?v=WDN7NiEdNJ0.
Hurley called Trichet at 6 a.m.: Shane Ross, The Bankers: How the Banks Brought Ireland to Its Knees (Dublin: Penguin Ireland, 2009), 196.
Alistair Darling found out about it on the BBC morning news: Alistair Darling, Back from the Brink: 1000 Days at No. 11 (London: Atlantic Books, 2011), 143.
