The Dismal Science (6 page)

At the time of Hamilton's memo, Paul Wolfowitz was only half a year into his term as president of the World Bank. So far, Wolfowitz had supposedly never had breakfast at either cafeteria; nonetheless, he circulated the only response to Hamilton's memo, in which he jokingly called Hamilton a “turncoat,” and said that “any good economist knows how to read the data in a way to get a favorable result!”

The fraternal ribbing was intended, doubtlessly, to be taken as evidence of the close relationship between the two, who, prior to joining the Bank, had worked together in the Pentagon. After the memo exchange, Hamilton made a daily show of going across the street to the Fund's cafeteria for his breakfast. Wolfowitz, meanwhile, continued to forgo the meal.

On days like the one in question, when there were protests on Nineteenth, Hamilton would use the tunnel connecting the two buildings' parking garages. Due to the low attendance at breakfast and the odd arrangement of the Fund's cafeteria—a labyrinthine warren of interconnected and irregularly shaped rooms, none of which had windows—Hamilton often had a room to himself.

According to rumor, he ate two eggs, two sausages, and an English muffin, but Tuesday was salmon cake day and he always treated himself to one.

“Oh yes. It's definitely better,” he said, when Vincenzo sat down and asked if it was really that much different. “But my
cholesterol, I don't even want to think about it.” Hamilton was a stout man, physically conspicuous but not obese. Though he was mostly bald, a blond cirrus adorned the peak of his shiny dome. He had jovial eyes, an affable way, and looking at him up close, this early, Vincenzo felt his antagonism dim a little.

Still, he wanted to limit the banter; he was considering calling Leonora on her cell phone. If she answered and he heard crowds, he'd know she had gone to the protests. If he heard the clacking and caterwauling of a train, he'd know she'd left. If she didn't answer, he'd have to decide what to believe. It shouldn't have mattered, but it did. “You wanted to talk to me about something?” he said.

“I wanted to talk about Bolivia. You heard about the poll?” He forked salmon cake into his mouth and chewed slowly.

Vincenzo nodded. “I did. So, why did you want to see me?” Of course, he knew why and was just being difficult.

Hamilton had been asked by the State Department, no doubt, to persuade the World Bank's management—namely Vincenzo—to cut off aid to Bolivia in the event that Morales made good on his campaign promises. Common wisdom held that appeasement didn't work with men like Morales. Coercion was better, but coercion was not discreet. Unless they could quietly strip away Bolivian aid, a great deal of which originated, in one form or another, at the Bank.

“You do know that he intends to expropriate foreign-owned gas refineries?” Hamilton snorted. “He's going to kick out all the foreign investors, and he wants to increase the production of coca. It's going to be their number one crop.”

“Isn't it already their—” Vincenzo interjected, but Hamilton pressed on.

“And he'll kick out the oil companies, he'll kick out the telephone companies, he'll cut off gas to Brazil and Argentina. It'd be a disaster for the entire continent.”

“Cut off Brazilian gas? Why would he do that?”

“Well—he'll spike the price.”

“They pay market right now, and if the price drifted up a few cents, that would have no real effect on
BOP
, right? Anyway, they could afford to pay a little more.” Vincenzo didn't actually believe that this was a nonissue, and he knew several good arguments against his own argument, but the argument served his purpose.

Hamilton's eyes widened. He had apparently used a dull razor that morning; his skin was speckled with bloody razor burn, and the droplets had stained the ridge of his starched white collar a rusty brown. “I'm just asking what you plan to do if Evo enacts these policies.”

“Well, I . . .” Vincenzo shrugged.

“You're going to cut back on aid, right? Don't be an idiot, Vincenzo.”

Pleased that he'd managed to get a rise out of this enthusiastic and cheerful American, he said, “I'm not sure. I don't see how any of this is the Bank's problem. It's out of our jurisdiction. This sounds like a political issue more than an economic one, so I don't think I'd do anything.” He was playing with semantics now, the last refuge of an ill-equipped debater. “If you think we need to change our policy then you should put it to the executive board.” Vincenzo knew full well that the board would not be discussing Bolivia again for another ten months, and that Hamilton might not be able to gather enough votes to
pass a punitive measure, especially if Morales were to win some friends in Europe.

“Morales is talking about kicking out foreign gas companies and seizing their operations. It's theft. We can't wait for the board. You're the only one who can do it now.”

“If I cut Bolivia off, I will have to cut off Venezuela, too—because they're just as bad. Are you saying you would have no problem if the Bank took action against Venezuela, one of the main oil-producing nations in the hemisphere?”

Hamilton shook his head. “Damn it, Vincenzo, of course that's different! Venezuela is a completely different case.”

“What's different about Bolivia, except that they don't have much oil? The policies are not different, just the size of the revenue.”

“Their fiscal—” Hamilton started and then shut up, spotting the trap. He folded his paper napkin neatly and then threw it onto the table. “Okay, fuck this. Let's just let it go.” His lips pressed shut, white with pressure. Vincenzo knew that Hamilton, despite his vulgarity, was more or less within his purview—not quite, but he wasn't exactly demanding action from Vincenzo. But he couldn't help himself.

Then, in an unfortunate step in the direction of absolutes, Hamilton—who was evidently no expert at hostile negotiation—said, “As I interpret it, you're not going to touch Bolivia no matter what Evo Morales does. If he confiscates the savings of foreign nationals, you'll do nothing. Is that correct?”

“Don't be ludicrous, he's not going to confiscate anyone's savings. My position is that if you and the board vote to change the Bank policy in Bolivia—”

“In ten fucking months!”

“Yes, if—in ten fucking months—you can get enough votes to change the Bank's policy, I will enact the new policy, but I don't think that this man Morales's plan demonstrates the kind of
egregious malfeasance
”—he made a point of using a phrase directly from the Bank's written policy—“or corruption that would require an intrusion from my office. My position is that this sounds like a political matter, and I wouldn't feel—”

“You axed an eighty-million-dollar tranche in Brazil last month!”

“Completely different!” Vincenzo snapped. “That was a failed subsidy!” He paused and took a breath. He was becoming truly angry, too, now, too angry to continue, and too angry not to continue. “I cut the subsidy because it was poorly designed, I didn't cut it because the president of Brazil was saying George W. Bush is an asshole. Personally, I don't think the Bank should become an instrument for Condoleezza Rice to coerce or bribe favorable policies from poor countries.”

And, although this had seemed like just another jagged point to score in an already jagged argument, when Vincenzo looked back on the conversation later, he would see that this particular statement marked a key transition. They'd strayed far outside the implicit boundaries of these conversations, and he'd led them there.

When Hamilton put his fork down and said, “You better watch yourself,” Vincenzo knew the conversation was approaching its endgame. Almost all of the major decisions had been made.

“Are you threatening me?” Vincenzo hoped he came off amused, not furious.

Hamilton shrugged, had a sip of coffee. He raised an eyebrow in a way that didn't indicate anything at all.

“If Wolfowitz calls me about this I will go directly to the
Washington Post,”
Vincenzo said, which was rash, irrevocable, and signaled a definitive transition into endgame.

Vincenzo had been playing chess with Walter at least three days a week for ten years and he'd found that the mid-game was the key to speed chess. At that pace, the opening was all reflex and the endgames were often averted either by a forfeit or time running out, so all the real strategy took place in the middle. One player usually made a fatal mistake in the middle, some apparently innocuous move. And if conversations were most like speed chess in that they were a rapid-fire negotiation of surprising, changing terms, with formalities up front and closing remarks at the end, then the outcomes of conversations—especially argumentative ones—were also determined by the decisions made in the middle.

Hamilton took a bite of wheat toast with raspberry jam and chewed it, nodding. Vincenzo could hear his own pulse in his head now—the conversation had its own direction, its own momentum, and he was just filling in the blanks. He wiped his palms on his trouser legs.

“Well,” Hamilton said, “if you do that, you'll lose your job.”

“And you'll lose yours.”

“That might be true and it might not. Would it be a consolation?”

“Yes, it would,” Vincenzo said. He could back down, now, he knew, but he didn't really want to. Stalemate was just that:
stale. “I have worked here for twenty-four years,” he said. “They will push me into early retirement. What about you? How old are you, forty-five? If this thing breaks, you will be done. You will be working as an adjunct at some tiny think tank. If you're lucky, you get to be an associate professor at a university in Ohio.”

“That's bullshit.” Hamilton's eyes darted away and then returned. The gesture was small, but in it Vincenzo saw doubt, and judged that he had the initiative.

He looked around, no one else was in the room, so he said, “If Wolfowitz contacts me about this, I will call the
Post
immediately. I swear.”

There was a pause. The threat was unprecedented. There existed hallowed, if unwritten, agreements about the sanctity of these kinds of conversations, and talking to the press about them was completely out of the question. The pause extended until the awkwardness dissolved and then continued until it became uncomfortable again. By then, the rage that was driving Vincenzo had given way to reason once again.

In a five-minute game of chess you can't always consider the permutations of every move, but must try to work entirely on a broad strategy. This move of his had been a straightforward gambit. In the famous Queen's Gambit, which Vincenzo used rarely against a strong opponent like Walter but often against a weaker player, white opened with a defenseless pawn on the queen's side. If black took the pawn, white could move to gain initiative and take control of the center of the board.

“Is it worth this much to you to make me look like a fool?”

“I don't care about you, William. That is the truth.”

“Jesus—you came here looking for a fight, didn't you? What the fuck is wrong with you?”

“I don't care about you, William,” Vincenzo repeated.

“And you don't care about yourself either?” Hamilton said.

“There are worse things than being forced into early retirement.”

“Such as?”

Vincenzo shook his head, stood up. He buttoned his suit jacket. He lingered for a half moment and then unbuttoned it again. “I'm telling you that I can live with this. I
want
to live with it. My wife and I bought a farm in Italy six years ago and I haven't been there since she died. The house needs a lot of work! I would love to go work on it.” Hamilton's mouth twitched slightly when Vincenzo mentioned Cristina. It was clear now that Hamilton really did want him to back off, that Hamilton was afraid of what violence Vincenzo might inflict on them, but Vincenzo couldn't bring himself to retreat from this precipice. The decision was made. He would not recant, and he would not hesitate.

And so, at that moment—standing and staring down at William Hamilton in the
IMF
's subterranean cafeteria—Vincenzo's life pivoted, and hundreds of other lives pivoted with him.

4

KAMIKAZE

On whether it was better to be loved or feared, Machiavelli wrote, “One would like to be both the one and the other, but because it is difficult to combine them, it is far better to be feared than loved.” His reasoning: “The bond of love is one which men break when it is to their advantage to do so; but fear is strengthened by a dread of punishment, which is always effective.” Vincenzo, who set out to pursue a degree in classical Italian literature and wallowed for too long in the texts of Machiavelli before coming to his senses, didn't think that love was actually more breakable than fear. But as a general approach to statecraft, as a way of thinking, Machiavelli's book was, undeniably, worth reading.
The Prince
was not a self-help book for world leaders—it was a map for self-preservation.

In 1944, when Europe had been freshly demolished, the Allies decided not to stick the losers with the bill once again. Not this time. Recent history had provided a stark example of how it
wouldn't be in their self-interest to foist further hardship onto the Axis, which would only become more politically unstable as their economies were ravaged. So, in 1944, before the first atom bomb had fallen on Japan, the Allies convened in Bretton Woods, New Hampshire, and created the World Bank and International Monetary Fund in order to finance the rebuilding of Europe. Within a few years it became clear that the institutions could play a global role preventing economic disasters, too. More to the point, the kind of economic debacle that made it possible for a Hitler to win a presidential election could happen anywhere.