Feature

Life in a Glass House

A glimpse behind the closely watched door to Ai Weiwei’s studio.

Two government security cameras mounted on lampposts are trained on a bright teal-blue door that stands out on a sleepy suburban road in northeast Beijing, the front entrance of artist Ai Weiwei's studio. Recently, the 54-year-old Ai strolled down his quiet, tree-lined street and hung red lanterns on both lampposts. "Like National Day every day," he told me, with more than a touch of irony in his voice. (National Day is the Oct. 1 patriotic holiday marking the founding of the People's Republic of China.) It's a safe bet that Ai, who this spring was detained by the police for 81 days and recently was slapped with a jaw-dropping $2.4 million bill for alleged unpaid taxes and penalties (in the midst of the largest crackdown on Chinese dissidents in two decades), does not feel these are celebratory times.

I had come on a smoggy fall morning with photographer Matthew Niederhauser to shoot still portraits of Ai for Foreign Policy's "Top 100 Global Thinkers" issue, in which he ranks No. 18. By the conditions of his release from detention, Ai was not then allowed to give formal interviews or make public political statements. He was not allowed to discuss censorship or human rights in China, what happened to him during his detention, or broader questions about China's future. So instead, we chatted about art and cats.

Ai's studio complex, built in 1999 in northeast Beijing's tranquil Caochangdi village, consists of a brick courtyard enclosing a garden with bamboo stalks and an orange tree, as well as two main buildings. One is his studio; the other, less than 10 yards away, is his home. He spends most of his days padding quietly between these two buildings. On the interior side of one wall of the courtyard, four letters hang: F, U, C, K.

In the small room outside the main studio, several young assistants sit at computers examining photos and updating files. Mounted behind them is a giant black-and-white poster, filling nearly an entire wall, printed with some 5,300 names and birth dates: a memorial to the children who died in the 2008 Sichuan earthquake, many of them trapped inside collapsed school buildings. Ai has described the poorly constructed buildings as "tofu-skin schools."

Ai's work, veering from abrasive to compassionate, resonates with the old American journalistic credo, "Comfort the afflicted, and afflict the comfortable." Fundamentally, it is a matter of temperament, not ideology; yet in China, it's difficult to hold such convictions and remain apolitical. Perhaps not surprisingly, during our conversation Ai appears to restrain himself from political comment with some difficulty.

Inside the main studio -- a long, high-ceiled room with a skylight -- a slightly grainy black-and-white photograph tucked in a corner shows a fist raised in front of the White House, middle finger extended. "Is that your hand?" I ask.

He nods. "From 1995."

"More hopeful times," I muse.

He nods more vigorously.  

Ai is wearing a loose blue shirt and olive pants, a version of his everyday uniform. He moves languidly and stands with feet planted firmly apart. His surname sounds like the Chinese word for "love," and he is nicknamed "god of love" by his fans. Quite often, media coverage emphasizes Ai's daring or outraged side, but in person, he comes across as humble and tender.

While he is talking, one of his many cats, a large, white fur ball with a long tail, comes and rubs its back against his pant leg. There are at least 20 cats prowling around the studio. All are refugees. "We have too many wild cats," he tells me. "We feed them and give them medicine, and it attracts more." The white cat, which he scoops up to scratch behind its ears, is 12 or 13 years old -- well into feline middle age; it moves with a slight jerk in its step, but Ai says it is one of his favorites.

As Ai poses next to a porcelain "pedestal of tofu" in the courtyard (the photographer debates having him stand on it, but decides it's too fragile), I notice that he is regularly slipping out his iPhone to take his own photos. Later, Ai explains that he takes informal portraits of the steady stream of people who come from around the world to take portraits of him.

"Do they all the portraits look the same?"

"No," he says pensively. "All very different."

In October, ArtReview magazine named Ai 2011's most powerful artist in the world. When I brought that up, he simply shrugged. His life today -- working in confined quarters, surrounded by wild cats -- hardly drips with glamour or obvious accoutrements of authority. Under these circumstances, he clearly does not feel especially powerful. It is only the two security cameras trained on his doorstep that testify to the fact that others think otherwise.

Feature

It Ain't Easy Being a Central Banker

Spare a thought for the bureaucrats stuck with one of the most important, and miserable, jobs in the world.

Central bankers have always been important, but never since World War II have they been more critical than they are now. The bright sparks who invented a second global reserve currency in Europe are now charged with keeping it in one piece; meanwhile, the stewards of the first global reserve currency in the United States are resorting to increasingly unorthodox measures as they find their old arsenal empty in the face of a crisis that they -- and the banks they supervise -- helped create. On Wednesday, six central banks around the world, in a coordinated action, announced they were ready to open their windows wide to any bank which wants to borrow money from them at ultra-cheap rates. It was the latest attempt to get to grips with a series of global crises where central banks have, in general, found themselves very much on the back foot.

It's not a comfortable place for central bankers to find themselves. U.S. Federal Reserve Chairman Ben Bernanke, recently retired European Central Bank President Jean-Claude Trichet, and People's Bank of China Governor Zhou Xiaochuan aren't politicians: They don't, as a rule, like the limelight. (Bernanke's famous predecessor, Alan Greenspan, was an exception, of course, and he's paying for that now.) In general, central bankers are most happy when they're gathered around a conference table, debating whether to raise short-term interest rates or lower them. Trichet and Zhou are career technocrats, while Bernanke is an academic who once chaired Princeton University's economics department. 

Occasionally, however, if an economy gets really bad, as it is now, central bankers are thrown into the limelight as lenders of last resort -- the place to go for a loan when nobody else is willing to lend. For them, it's uncharted, uncomfortable territory. 

That, basically, is what has been happening in the most recent downturn. In the United States, the Fed under Bernanke printed money and used that money to buy Treasury bonds. It was an untested and unproven strategy, and it carried substantial risks. "Quantitative easing" (QE), as the practice is known, is prone to distorting financial markets and driving up the price of stocks and bonds without having much, if any, visible effect on the real economy. Indeed, that seems to have happened.

During the first round of QE from 2009 to 2010, the stock market rose more than 50 percent; the second round saw another strong market rally. Both involved investors buying up hundreds of billions of dollars' worth of Treasury bonds, raising their price.

For Milton Friedman's 90th birthday, in 2002, Bernanke gave a speech in which he promised, on behalf of central bankers everywhere, never again to let the world fall into a depression. Those words ring hollow today -- not because Bernanke made bad decisions, but because it turns out that he simply didn't have the ability to prevent another meltdown after all. In the event of a major global financial crisis, it turns out, central banks can only do so much. Right now, their armories are looking decidedly empty in the face of a problem that has never been more daunting. Central banks can cut rates all the way to zero and even buy longer-dated bonds, but the help from that may not come soon enough.

Additionally, Bernanke's huge problems on the rate-setting front pale in comparison with what Trichet and his colleagues at the European Central Bank (ECB) have been being asked to do to save Europe: They have to reinvent the practice of lending money as a last resort.

Historically, central banks have lent money to banks, and because central banks are also bank regulators, they could be strict about how that money was to be used. (No big bonuses! No large dividends!) Today, however, the ECB is being asked to act as lender of last resort not to Europe's banks but to its governments. If Portugal or Ireland can't borrow money anywhere else, can't they just cover their deficits by borrowing from the ECB?

The problem with lending to sovereign governments is, well, that they're sovereign -- no central bank can tell an independent nation what to do with its money. Additionally, because loans to sovereigns are unsecured, there's a real risk that the lender of last resort could end up losing a ton of money if the country in question found itself unable to repay that loan. Losing money is not something in any central bank's playbook, and the ECB, in particular, seems very unwilling to risk it. But if Europe is to shore up its troubled governments, from Ireland to Italy to Greece, then it's going to need to use ECB money somehow.

As Italy's Mario Draghi takes the helm from Trichet at the ECB, his biggest challenge will be to work out whether and how Europe's central bank might be willing to bail out its troubled sovereigns. The stakes couldn't be higher: If he can't pull it off, the whole continent could fall apart -- and mark an ignominious end to a project that Trichet himself devoted much of his life to.

In China, Zhou -- one of the most sophisticated and internationally minded Chinese bureaucrats -- is facing a similarly vexing, if different problem. With China's holding at least $200 billion in U.S. Treasurys -- more than anyone except the United States -- Zhou is struggling to decide how long, or even whether, to keep that holding as the U.S. economy continues to sputter.

One thing the U.S. and European central banks have in common is this somewhat paradoxical problem: In many ways, the biggest risk is that they won't be bold enough. In the United States, especially, the Fed has become highly politicized by the Tea Party and others -- and that's dangerous, when it has to do radical new things in order to save the economy.

Central banks are doing one thing right, however. In the wake of the financial crisis, central bankers around the world have embarked on a huge new project: revamping the international rules governing banks so that never again will the world see a financial crisis like that of 2008. The effort has a name -- Basel III -- and attracted a brief flurry of attention at the end of 2010, when, after a lot of discussion, the world's central banks largely agreed on the core measures of capital and liquidity that big banks would henceforth need to hold. In many ways it's this, rather than easing or government lending, that will prove to be the single most important development in the recent history of central banking. If it works, it will help keep the world's banks under public control; if it fails, then we will surely face ever larger and more frequent financial crises in the future.

It will take a while for Basel III to come into effect, even under a best-case scenario. Some deadlines don't arrive until 2019 -- which means that the most important central bankers of all, as far as the world's long-term economic future is concerned, could end up being not Bernanke and Draghi or even Zhou, but rather the midlevel technocrats charged with implementing Basel III. They're utterly unaccountable to anybody and fly well below the political radar. The rest of us have no choice but to simply trust that they're good at what they do. 

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