You Can't Be Serious

by: Chris Bowers

Tue Jun 16, 2009 at 14:21


The serious people at The Center for American Progress published an argument today that the IMF needs to be reformed, but that Congress should pass IMF funding without any guarantees of reform. The argument is very serious (emphasis mine):

Opposition is coming from both sides of the political spectrum. There is the usual neo-con fearmongering that this money is a "giveaway"-more on why this is silly below. There are also progressives who argue, with reason, that the IMF should be less strict in its demands from poor countries because past IMF conditions on loans to developing economies often caused great pain and were ultimately unproductive. All sides are demanding greater transparency in the IMF's lending practices and governance.

Much room remains for improvement at the IMF, but we need to ante up. Congress should deliver the funds we've pledged, while also keeping up the pressure for reform.

The article goes on to list five reasons for passing IMF funding. None of these reasons explain how IMF loans, which the article admits have often caused "great pain" and been unproductive, will become productive in the future. Further, there is no explanation for how more pressure for reform can be applied to the IMF once the funding is passed. There is this quote though (emphasis mine):

2. We are going to pay one way or the other. Let's be serious. We aren't going to let Pakistan's economy collapse, or for that matter Hungary's, Romania's, or Guatemala's. The potential national security consequences of any of those countries failing are too dire, not to mention the ultimately higher economic costs to America. Better the IMF prop them up-as they have-than us shoulder an even higher burden in funds and hassle.

3. This is a chance to show leadership again. American economic leadership has taken a serious beating lately. The world blames us for this crisis. This is a chance to do the right thing when countries are in need and gain back some credibility as an economic leader. Let's not be the last country to pay what we pledged.

Get serious, huh? Serious, like telling people to drop their demands to change the IMF, but to keep up their pressure to reform the IMF? Serious, like telling people that IMF loans have often caused great pain and were unproductive but, in order to prevent pain, we should fund the IMF without any changes to it? Serious, like arguing that passing IMF funding will demonstrate American economic leadership, even though several new governments have arisen in South America largely in response to popular sentiment opposing the American-led economic policies of the IMF?

It is infuriating how many Washington policy analysts will, when their arguments have no real persuasive value and are overtly contradictory, simply resort to calling opponents of their policy "not serious." This is especially the case when three-dozen progressive members of the House of Representatives are holding up IMF funding until four specific reforms are instituted by the IMF. What those Progressives are doing is actually "serious," since they are backing up their calls for reform with specific demands and meaningful action. By contrast, saying that an institution is hurting people and needs to be reformed, but simultaneously declaring that we need to drop all demands for reform, is fundamentally unserious.

Chris Bowers :: You Can't Be Serious

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Great post (4.00 / 3)
Now is not the right time to push for reform of the IMF. Far better to delay it until a time we're sure to fail.

CAP is pretty much an arm of the Obama admin, no?

Interesting, too, how everyone seems to be suggesting that the IMF is the only reason to oppose it, not you know, opposition to the war/s, esp. the lack of benchmarks.


it's so fitting that they put the IMF funding into a war supplemental -- one of many ways we wage war/use force (4.00 / 3)
and of course, we should trust them -- they'll "reform" later, like with trade, our "financial system", and everything else.

ugh.


How dare you question these Very Serious People?! (0.00 / 0)


John McCain <3 lobbyists

The IMF (4.00 / 2)
has caused enourmous problems which are amply spelled out in Joseph Stiglitz's book "Globalization and its Discontents"

The US does not run the IMF. In fact by tradition the head of the IMF is a European, and though we certainly have the most influence of any single country, we cannot impose change by ourselves.  With the collapse of the Washington Consensus, one would hope the IMF would realize that the economic programs it has been peddling are wrongheaded.  Changing that, though, will not be easy.  


Yeah, my objection, too. (4.00 / 1)
Sry, Chris, but acting as if the US has only to say jump and the IMF will hop like a frog sounds a bit like typical US ignorance to me. The IMF IS a multinational organisation, and every reform effort has firstly to be discussed with the partners. This is a very time consuming process. In the meantime, lots of nations in economical trouble are in desperate needs of vredits. They can't wait for so long.

So, the obvious solution: Start negotiations now. Use next year's budget as a lever to make the final push. Unilaterally holding back US contributions now would only result in firther undermining US credibility, making a positive response to reform plans less likely.


[ Parent ]
Who would be applying the pressure? (4.00 / 2)
Gray,

Once the money is appropriated by congress, I suspect the ability of congress to influence how that money is used is quite limited.  I could be wrong, but I'm under the impression that the U.S. treasury department basically dictates IMF policy for the United States.  And we all know who's in control of that institution- a neoliberal, Washington-consensus, corporate supremacist hack.  A neoliberal hack who would not have been appointed by Obama, by the way, if our esteemed leader did not agree with his views on economic policy.

For that reason, I have to agree with Chris here.  A few hours ago, when Congress was still debating the War-IMF appropriations bill, was a rare moment when progressives actually had some say over IMF policy and how our tax dollars are used by the folks who inhabit that fancy building on 19th street.  Now that the money has been appropriated, I fear we've already lost any influence we might have had over how it would be used.  

As for undermining U.S. credibility, failure to appropriate money to the IMF after Obama promised he'd do so would certainly undermine the credibility of the U.S. among the European elite, who agree with imposing neoliberal policies on poor nations and were gonna use the money to bail out their banks anyway.  However, I think it would only enhance the credibility of the U.S. in the eyes of the untold billions of Latin Americans, Asians, Africans, and Eastern Europeans who've born the brunt of the IMF's wrath.  Heck, folks in the third world might stark to think that some people in the U.S. actually care about them.  They might even get the crazy idea that the U.S. is a functioning democracy!

Like I said, I hope I'm wrong.  I hope progressives can still have some influence over IMF policy now that it's once again flush with taxpayer dollars, but I sincerely doubt it.  

On to the fight for single payer, I suppose.      


[ Parent ]
Good points. However, trying this unilaterally is still doomed. (0.00 / 0)
No argument about that the IMF could use an overhaul. But it's an organisation of 185 countries now,all of which have a say in the IMF's Board of Governors. And even it's more powerful Executive Board consists of 24 members. Of course, the creditors sure have a lot kore weight than others, but the US isn't the only one. At the recent G20 meeting, the IMF was a topic, and there have been agreements on financing it in order to effectively fight global recession. And then, some reforms are already under way since 2006 and 2007.

But here you are, the US progressives, boldly pursuiting a plan to UNILATERALLY reform an organisation belonging to 185 nations! Excuse me pls, doesn't this smell like failed Bush policy to you, too? Isn't this another try of the tail wagging the dog? And is this initiative, which will be very difficult to implement regarding all those other nations who have a say, and whose impact on the US economy will be miniscule, really the most urgent topic now? D'oh.

Really, I'm flabbergasted. What about president Obama's plan to overhaul the US financial regulation agencies? That's all over the headlines in international media right now, even in Germany it's the #1 story on Der Spiegel! It's THE big showdown between Wallstreet and White House. Now, where's that story here? Instead, we have that lot of brouhaha about the IMF! Goddamit, fuck the IMF, who cares!


[ Parent ]
IMF flops (4.00 / 1)
The smartest way of dealing with the IMF and its Friedmanesque, draconian "reforms" aimed at screwing common people for the immediate benefit of extortionate banks was pulled by Egypt.  They put the reforms into effect and then invited the IMF back just in time to witness nasty riots aimed at cancelling the IMF "reforms."

Bingo, no reforms needed.  You may leave with your heads intact.  


Applied Broderism (4.00 / 3)
The Republican nativist opposition to the IMF can be used to our advantage in lobbying against the war supplemental in that a vote against it can be seen as "bipartisan"-the ne plus ultra of political virtue in the Obama era.

At least, that's the case I made in calling my Blue Dog congressman- praising him lavishly for his commitment "to moving beyond partisanship"  and expressing the hope that he will join me in doing so in this instance.



Absolutely (0.00 / 0)
Great post. We're extremely lucky that DSK is running the show...for now.

Question: I'm trying to make the connection between the tennis player, and the post? It looks hilarious (and very '70s), but is it a cultural reference to a movie or something?


McEnroe asked the question (4.00 / 1)
'You cannot be serious' to an umpire.  Well, wasn't really a question. I know this because I am a long time tennis fan and consider McEnroe's peak - admittedly short compared to other great modern era players like Borg, Connors, Lendl, Sampras, Agassi, and Federer - to represent the very highest skill level attained and demonstrated.  Shot precision, master of serve-and-volley, just going out one day an deciding to develop a killer serve...many reasons.  Best single season record at 82-3 in 1984.  A few years ago when he was dispensing with foes in the finals 6-1, 6-0 Federer was pretty close to McEnroe's peak and in 2005 he was 81-3.  

McEnroe was a brat, however.

http://www.youtube.com/watch?v...

Did they get you to trade your heroes for ghosts? Hot ashes for trees? Hot air for a cool breeze? And cold comfort for change?


[ Parent ]
Oh, right McEnroe (0.00 / 0)
That makes sense. I never followed tennis, except for a brief while when Agassi burst on the scene in the summer of '87.

Thanks for cluing me in...


[ Parent ]
"we're actually talking about $100 billion in loanable funds that the CBO has scored with a budgetary cost of $5 billion" (4.00 / 1)
Yglesias -- http://yglesias.thinkprogress.... -- The IMF's $5 Billion --

... we're actually talking about $100 billion in loanable funds that the CBO has scored with a budgetary cost of $5 billion. It's not totally clear to me how the CBO reached the conclusion "that the present-value risk-adjusted cost of the proposed increase in U.S. participation in the IMF is $5 billion" given that, as the CBO concedes, no countries has ever defaulted on an IMF loan. ...


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