Johns Hopkins Magazine -- September 1999
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The Way
According to Hanke
Author's Notes

By Dale Keiger

The first time I interviewed Steve Hanke, I spent 45 minutes waiting to ask my first question. His telephone kept ringing. He'd answer it, chat for a few minutes, hang up. We'd begin our conversation, the phone would ring, and the process would repeat itself.

Once we were able to begin a real, substantive conversation, I found the subject of currency boards and the IMF and currency trading to be interesting. I'm a former business reporter. One aspect of business journalism that I enjoyed most was explaining how equity management or takeover financing or fiscal policy worked. I liked the challenge of making arcane information meaningful and engaging for the lay reader. I was never interested in just discussing numbers. I wanted to tell business stories through stories about people.

That interest governed my approach to writing about Hanke and currency boards. On one level, it's all about numbers and policy statements and loan agreements. But what really interests me is how all of that works out at street level. An official in New York or Geneva or London makes a decision, and suddenly a street vendor in Jakarta cannot afford cooking oil. Too often, stories about monetary policy never go beyond the rarified policy level, where everything seems abstract. I always want to know what happens to the people on the receiving end of those policy decisions.

Hanke shares this view. Part of his contempt for most economists stems from his view that they too rarely (if ever) venture from the confines of their faculty offices to look at how people actually must live and work. He believes in economic fieldwork. Several times, he expressed to me his view that he's better equipped to advise governments on their monetary policies because he's been a currency trader. He knows the effects of monetary policies because he's bought and sold the currencies affected by those policies. He knows when the market is going to bail out of a failing currency because he's done it himself.

He remains peripatetic. During the reporting of this story, I had to talk to him in between his trips to Europe to advise the government of Montenegro, and to Georgetown, where his daughter just gave birth to a grandchild. I wouldn't want to pay his phone bill. But I would like to have his frequent flyer miles.