With the weekend news of banks that had survived even The Great Depression going under or being bought out, NPR aired several stories about the financial crises during Morning Edition.
One was a report by David Kestenbaum about the tricky politics of inviting the International Monetary Fund (IMF) to perform a “check-up” on U.S. government economic policies and practices.
The ostensible rationale behind such an inspection seemed sensible to me, a layperson. There is merit in the idea of collaboration to facilitate the implied goal of transparency for stability and accountability. But that would be granting too much on the face of things, and there is cause for skepticism (though likely not the same flavor of skepticism and resistance that might come from Bush’s economic advisers).
The IMF is not known for being at the vanguard of sustainable development. The report cites Argentina as an example where the IMF has come to “help,” and, well — that appears to have been a complete failure until Argentina rejected IMF policies.
The IMF’s most influential practices are not that far away from those that helped cause the housing bubble and the credit crunch in the U.S. to begin with. In fact, there seems to be significant overlap in the global private institutions that have exploited the domestic situation and who also invest in IMF-led “development.” Additionally, the U.S. is a major influence on the governance of the Bretton Woods institutions (it gets more explicit control over the IMF’s sister institution, the World Bank).
If your general understanding doesn’t extend that far, then you might not have laughed until you heard the end of the report. Someone is quoted, summing up how simple it would be for someone to spot the impending housing crisis, as saying my 6 year old daughter knows you don’t lend money to people who can’t pay you back.
This is exactly what the World Bank and the IMF are infamous for: lending money to dictators of poor nations, or muscling its way into vulnerable economies, and then as some see it, extorting payback at the expense of sovereignty and development of resources essential to human rights in favor of projects that involved multinational corporations cosy to the largest investors in the WB/IMF regime. Not too much unlike a family feeling forced to pay back a loan shark at the expense of medicine or food.
The funny thing is, this is all tacitly acknowledged earlier in the piece when Kestenbaum refers to the IMF as a global loan shark.
Again, this is not to disparage the entire rank and file of these organizations, of which I know little about, and among which — I presume — there are those who are passionate about solving real problems. But these are for-profit institutions, and the associations of their power brokers along with the general record of these organizations are so conflicted as to not warrant placing faith in them, and to highlight the irony when it is suggested they advise the U.S.
