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by John Gabree

The Panic of '89 by Paul Erdman

With the publication of his first novel, "The Billion Dollar Sure Thing," Paul Erdman joined the ranks of accomplished thriller writers. His second novel, "The Silver Bears," less intense though funnier, secured his reputation as the master of financial intrigue. Unfortunately, his third release, "The Crash of '79," was an international best seller; unfortunately because it has led him to try to repeat that success with "The Panic of '89," which is in some ways his most disappointing book.

Once again, the venue is international finance, this time centered on a plot to bring down the Bank of America and with it the American economy. The players include the ruthless head of a Swiss bank, a consortium of greedy European money houses, a conspiracy of Third World oil and finance ministers, the International Monetary Fund, the Federal Reserve Board, the FDIC, the FBI, the KGB, the free-lance terrorist known as Carlos and, to add barely a dollop of sexual interest, a beautiful and worldly Iranian businesswoman and a smart and sexy reporter for The Wall Street Journal.

The hero is international finance professor Paul Mayer, "one of Georgetown's most prominent residents ... {known around Washington} as a cross between Henry Kissinger and Paul Volcker." Mayer is about to be drawn into Washington's inner circle more deeply and dangerously than he would have imagined possible.

The time is December 1988. The Reagan administration has held things together more ably than some would have predicted. It is being replaced by a Democratic administration. The domestic and world economies are shaky, buffeted by an oil glut that followed the end of the Iran-Iraq war. The United States is slipping into a recession accompanied by high unemployment. The budget crisis of the mid-'80s is still unresolved and the dollar is teetering on the edge of an even more precipitous slide.

Meanwhile, American banks are dangerously overextended, holding billions of dollars in worthless paper issued to Third World countries. The governments of Mexico, Brazil and Venezuela are collapsing under the weight of foreign debt. They threaten to withhold payments on their debts unless the U.S. government fixes a favorable minimum price for their oil exports. The Swiss-led consortium backs the oil producers, expecting to profit handsomely from the Americans' distress. As one of the largest holders of foreign loans, the Bank of America is at high risk of bankruptcy.

The conspirators are counting on the U.S. government to come to the rescue of the crippled giant. For insurance, they hire the terrorist Carlos to up the ante. As the American point man, Paul Mayer orchestrates some imaginative countermoves, though he nearly fatally underestimates the dimensions of the danger.

Readers for whom genre fiction is an opportunity to educate themselves about matters arcane will not be disappointed by "The Panic of '89." Though Erdman's lectures sometimes extend through page after page of pedantic dialogue, he gives the reader a believable sense of how the international banking system functions. No one can read these pages without coming away with a surer understanding of the precariousness of the whole business.

What is disappointing, however, is that a writer so good at demonstrating the way things work should be so bad at explaining human behavior. Though Erdman reveals a sure if cynical comprehension of the ways in which certain personalities move through the corridors of power, he is unable to depict believably even the simplest motivations.

Even as he holds us riveted to the fate of nations, he leaves us indifferent to the human beings who inhabit them. His is an almost wholly intellectual kind of thriller. Having convincingly put the world economy in jeopardy, he holds your attention by making you wonder how he will get it out again. But where the fate of the protagonists is concerned, only one passage in the entire volume is genuinely gripping.

Erdman's fictional characters are forgettable. And even the personalities brought in from real life, such as Carlos and Kissinger, are anachronisms, hoary figures limned with the glib superficiality of profiles in People magazine. Even the sex is perfunctory; Erdman is only really hot for numbers. This all may be beside the point, of course, because despite its shortcomings "The Panic of '89" holds your interest. (Book World, The Washington Post; February 13, 1987)

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