The Three Marketeers

Economist heroes? It sounds silly unless you understand how close we came to economic meltdown last year. This close

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So far, the U.S. has dodged these bullets, but the danger to its economy is far from over. The tremendous appetite of American consumers for imports--an appetite whetted by stock-market wealth--has provided some support for Asia and Latin America. Yet the tiniest perturbation could send the whole economy tumbling, and there are perturbations all over the place. Brazil is just hanging on, which means so is the rest of Latin America. Europe, which suffers from high unemployment, is slowing. And Asia's comeback is predicated on Japan's getting its troubled economy into gear.

In late-night phone calls, in marathon meetings and over bagels, orange juice and quiche, these three men--Robert Rubin, Alan Greenspan and Larry Summers--are working to stop what has become a plague of economic panic. Their biggest shield is an astonishingly robust U.S. economy. Growth at year's end was north of 5%--double what economists had expected--and unemployment is at a 28-year low. By fighting off one collapse after another--and defending their economic policy from political meddling--the three men have so far protected American growth, making investors deliriously, perhaps delusionally, happy in the process.

It has meant some very difficult decisions. In some of the nations devastated by the crisis, there is a growing anti-U.S. backlash, and politicians such as Malaysian Prime Minister Mahathir Mohamad complain that Rubin, Greenspan and Summers--and their henchmen at the International Monetary Fund--have turned nations like Malaysia and Russia into leper colonies by isolating them from global capital and making life hellish in order to protect U.S. growth. The three admit they've made hard choices--and they'll even cop to some mistakes--but they still believe that a strong U.S. economy is the last, best hope for the world.

And awful as the Asian correction is, it was, in a sense, inevitable because those economies had trundled billions of dollars into useless real estate and industrial development. "In general," said Summers, 44, as he sat in the Frankfurt airport last fall recovering from a hectic trip to Moscow, "we start with the idea that you can't repeal the laws of economics. Even if they are inconvenient." Over dinner recently someone congratulated Rubin on the booming U.S. economy and pointed out that one international magazine had been uniformly wrong in its predictions of a complete global collapse. The Secretary wasn't biting: "Everything is probabilistic," he said. The battle continues.

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