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Last update - 02:07 01/07/2005

The Washington solution

By Ariel Rubinstein

"Olamo shel nagid" ("Governor's World") by Stanley Fischer, papers and lectures translated into Hebrew by Aharon Rosen and Orit Zrubavel, Yedioth Ahronoth, 231 pages

If "Olamo shel nagid" ("Governor's World") had been published by a government advertising agency, the finance minister would have used the book as the perfect illustration of how the public sector wastes resources and does shoddy work. But this pointless volume was actually put out by a private publisher. The only explanation I can come up with for the fact that it ever saw the light of day is the over-eagerness of people who are looking to make a fast buck - although I'm not sure they succeed on that score either.

On a publicity sheet accompanying the book, the publisher writes: "Most of us have never heard of Stanley Fischer ... `Governor's World' introduces us to the economic approach and private worldview of the new governor of the Bank of Israel. Here is a rare opportunity to meet the man who is about to affect our lives in the coming years." A worthy goal, indeed. Even some of the ministers who endorsed Fischer's appointment had never met him before or had the slightest clue what his worldview might be. So the idea of getting to know "the man and his world" is not so preposterous. The trouble is that someone seems to have been figuring on the book being published before Fischer physically took office.

I don't know if Fischer was personally involved in the publication of the book (let's hope not). The outcome of this rush job is a collection of 20 tedious lectures delivered by Fischer, on such occasions as a conference marking the fifth anniversary of the reintroduction of the Estonian kroon, the association of pension funds convention in Australia, and an awards ceremony for The Banker magazine. The lectures at such stuffy affairs are the worst possible way to get to know any man and his world.

What can you learn from this book? Well, let's say you have a burning desire to see pictures from around the world. In this book you will find photographs (of very poor quality) of the Taj Mahal, a village in southern Ethiopia, a screen displaying share prices in New York and a public square in Warsaw. I was especially taken with a photo of International Monetary Fund (IMF) officials meeting with tax inspectors in Afghanistan. Curious Israelis who want to see what Israeli money looks like can turn to page 134 for a picture of bills stacked up in the basement of the Bank of Israel. The cover of the book features a photograph of Stanley Fischer and his old buddy Yaakov Frankel standing under a row of clocks showing the time in the monetary capitals of the world they run.

And what else do we learn about the governor apart from the fact that in recent years he has been to many capital cities and been welcomed royally in all of them? Very little. The book is nothing more than a collection of badly translated documents that will someday help researchers of globalization understand how the West took over the world.

Trivial statements

Fischer's lectures follow a set pattern. He begins with a polite introduction: "It is a pleasure to be here this morning," or "it is a great pleasure to participate in this conference." Speaking to an audience in Moscow in 2004, he expresses sorrow and sympathy on behalf of himself and his organization over the tragedies that have befallen "your country and your people." His listeners no doubt pulled out their hankies. Then he carefully lists a long line of subjects he is planning to discuss. At this point, he loves to quote his hosts, repeating especially banal remarks they have made. In India: "To quote President Kalam, the Indian economy cannot remain cut off from international developments." In Gabon: "As President Bongo has emphasized, `spurring economic growth and eliminating poverty will require many new and innovative solutions.'" In Estonia: "These are remarkable achievements, which as President Meri and [Bank of Estonia] president Kraft have both said, have made Estonia one of the leading reformers among the transition countries."

The discussion that follows is about as profound as a doctor's report. Basic economic indexes abound: GNP, growth rates, inflation (think: temperature, blood pressure, pulse). Fischer cites statistics, hands out "marks" and makes comforting noises to boost the "sick" country's spirits: To the Poles he says: "The economies in the region have made strides - perhaps not as much as we hoped - but still very impressive." To the leaders of Africa: "Your words ... show how determined you are to address the problem of poverty in Africa." To the Merchants Association in New York: "You have already played an invaluable role in the process ..."

After buttering up the local leaders, Fischer informs them that they have successfully completed their "Reforms 101" course and they can sign up for the advanced class. He is cautious and measures his words. He knows it is important that convalescence plans look as though the patient is exercising free will: "At the IMF and World Bank, we like to say that economic programs succeed when they are `state-owned.'" But the endless reminders of his authority (as first deputy management director of the IMF), and the hints he drops about the power of this institution (if any are needed), do their thing.

His speeches are full of trivial statements: "Social customs related to family size may change"; "I have two predictions. One is X, Y and Z ... and the other is that there are surprises in store"; "Unemployment in Poland is a serious political problem"; "It's important to have people who understand the environment in which they work."

Fischer has boundless admiration for economics. He believes that it has insights to offer on everything, including cultural affairs. This comes across even when a note of doubt creeps in. "Respect for national and local cultures is a subject that is difficult for economists," he says. Difficult, but not beyond their grasp.

Where are the dilemmas?

I am sure Fischer has plenty to say on important issues. But lectures of the kind included in this book were not meant to be an intellectual challenge. The book does not discuss issues that have no "Washington solution." "Elected politicians," he writes, "are always interested in the short-term and have a tendency to be myopic." Thinking back on his Citigroup days, he expresses his amazement at the extent to which maximizing stock prices was that organization's guiding principle. So what is the difference between politicians and the managers of Citigroup? What can be done to get them both to think ahead? These are important issues and Fischer is aware of them, but why ruin everyone's fun with real dilemmas?

Every lecture ends on a hopeful note: You've come a long way. A little patience and another crisis or two, and then all will be well. I'm the doctor and I've got the prescription. I've learned from experience, and I'm right, even if I was wrong in the past.

The carelessness with which the book has been published is particularly evident in the translation, which is marred by overly literal translations of technical terms and instances in which the translator completely misses the author's ironic tone.

By chance, "Governor's World" landed on my desk at more or less the same time as Benjamin Netanyahu's booklet "Economic Reforms in Israel" - an essay that could be the beginnings of "Finance Minister's World." "Governor's World" contains a portrait of Stanley Fischer that is amazingly similar to the one of Netanyahu in his book. Both are wearing dark suits and carefully knotted ties. Their white hair is combed to the right, with a part on the left, and an Israeli flag flutters behind them. Fischer looks amused and more self-assured.

Netanyahu's gushing comments appear on the back of Fischer's book. Netanyahu, the patriot, writes: "Fischer has been thinking of linking his fate to ours for decades. Now his dream has come true." Well, what the devil kept Fischer from coming here 30 years ago? Why didn't he join his dear friends Dan Patinkin and Michael Bruno, who built their homes here and found Jerusalem to be a fine base for an academic career? What is this "linking his fate to ours" business? Fischer can always find a seat on the next flight back to the United States - which can't be said for the majority of Israeli citizens whose fate is now linked to his.

Altogether, Netanyahu proves himself a total lightweight. "In this book, Stanley Fischer imparts his economic and social theories in prose that is both eloquent and articulate," he writes. Really, Mr. Finance Minister. What about all Fischer's talk about credibility? You read his book like I read yours. But if I'm wrong and you have read the book, what about the importance of friendship? Couldn't you pick up the phone to Stan and urge him (in the language of which you are so fond) to shelve the book, or at least insist that the publisher hire a linguistic editor?

And one bit of advice for Stanley Fischer: It's true people are applauding you and groveling at your feet, but it's not because the lectures in this book are so brilliant. It's because you were, and continue to be, a man who wields great power. People like you don't have time, and they can't do everything. The publication of this "quickie" book was not a stroke of genius. Everyone knows you had a million things to take care of in the few months between your appointment and commencing your duties as governor of the Bank of Israel. No one expected you to produce a new book so quickly. Personally I believe that when the time comes for serious decisions, you will employ good judgment and sensitivity. But people around here don't know you yet, and as they teach you in economics school, the way you start off is crucial for establishing your reputation. It wasn't such a good idea to show those who will be begging for all kinds of things in the future that you can't say "no," even to a publishing company.

Prof. Ariel Rubinstein was awarded the Israel Prize for economics.