Whenever John Taylor's name comes up, I can't help but think of his roasting by Princeton doctoral students sometime in 1983 or 1984 during the annual student skits. Taylor had recently moved from Columbia to Princeton, and was now being courted by Harvard and Stanford. And apparently he could not quite make up his mind. Or rather, he could too easily--only to change it a little while later. While we students were not privy to the specifics of the negotiations, we could follow Taylor's flip flops from the news bulletins the Department would stick in our mailboxes. "Taylor is going to Harvard," or "Taylor is staying," or "no, he is leaving" they would announce periodically. So the students in the skits had this great moment when they first paid tribute to Taylor and then invited Taylor, who was sitting at the back of the auditorium, to join them on stage to receive an award. Taylor got up and was making his way down, only to be interrupted halfway by the students, who went: "Nah, we changed our mind..." Sheepishly, Taylor had to turn around and go back to his seat.
Taylor eventually did move to Stanford, and rose to new heights when he was appointed undersecretary for international affairs at the Treasury in 2001, shortly before 9/11. If he suffered from indecision in that position it is not in evidence in this interesting book, his first-person account of financial diplomacy in the post-9/11 world. The book focuses on his efforts at the Treasury to freeze assets of terrorists, restore financial stability in Iraq, finance the reconstruction of Afghanistan, deal with the Argentinean financial crash, and reform the IMF and the World Bank.
One wishes that there was a little more economics in this book, and a bit less of a blow-by-blow account. But what I like about the book is the gentleness of spirit with which it is written. Taylor dutifully reports the occasionally harsh criticism he received--Joe Stiglitz once accused him of not being up to date with the relevant economic theory and practice on emerging markets--while avoiding the temptation to respond in kind, a rarity in books of this kind.
The book documents time and again how thin the line between U.S. policy and the policies of the IMF and the World Bank has become in practice, with the U.S. intent on using these agencies to advance its own particular agenda at every turn. Taylor puts his card on the table at the outset. His efforts were designed to support U.S. foreign policy first and foremost:
In the past, finance experts have tried to insulate themselves from foreign policy. As George Shultz and Kenneth Dam put it in their book Economic Policy Behind the Headlines: "The Treasury and the Federal Reserve Board have always considered this field their special preserve and have seldom welcomed advice from other parts of the executive branch." To counteract this attitude, i began telling my Treasury staff to be on the lookout for ways that financial ideas could help our foreign policy, creating a different mind-set from that where they only worried that sound economic policy was threatened by foreign policy issues.