Word: marketization
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Dates: during 1990-1999
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...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...
...discovered that Thailand's economic boom was built on a base as solid as a bowl of pad Thai noodles. But the roots actually reach back further, to Black Monday, Oct. 19, 1987, when the Dow Jones industrial average shed 22.6% of its value in a single day. The market, of course, rebounded--and how. But at the time, professional investors thought U.S. stocks were due for a decade of slow-to-sluggish performance. Their eyes--and wallets--quickly alighted on the world's so-called emerging markets. These nations, allegedly "emerging" from centuries of economic backwardness, were posting phenomenal...
...initial downturn didn't surprise the Fed or the Treasury too much. For the better part of two years, Greenspan and Rubin had been quietly fretting about the narrowing "spread"--the difference in interest rates--between U.S. bonds and emerging-market bonds. By 1996 banks were lending money to countries such as Malaysia at interest rates just a few percentage points above what the U.S. Treasuries commanded. The implication: Malaysia was not a much riskier bet than the U.S. This was nonsense, and the committee knew some correction was in order...
Rubin has had his star turns as well. In late 1997 he probably single-handedly stopped a panic about Korean debt from avalanching into a U.S. market crash by working the phones, convincing international bankers that they should cut Korea a break. It was not a welcome pitch. "This is a hell of a Christmas present," one banker moaned to Rubin on Christmas Eve. But Rubin's scheme saved the banks billions because if Korea had crashed, the banks could have lost everything. "It was Bob who actually got the banks to see how it worked to their benefit," Greenspan...
Their success has turned them into a kind of free-market Politburo on economic matters. Clinton relies on the men to a level that drives other Cabinet members nuts. One weekend this summer, when both Summers and Rubin were on vacation, Clinton began to panic about Russia's weakness. "Where's Bob?" the President kept asking nervously in a morning meeting. Turning to White House staff members, he told them to pull together a plan. The team spent a weekend crashing a strategy, only to be shut out again when Rubin arrived back in town. An aide to Secretary...