Why should we trust the IMF?

[CHIMO]

Is advice from the IMF better than advice from a drunk in the street? That is the question that people around the world should be asking as the International Monetary Fund dishes out its prescription for austerity. The IMF programme calls for cutbacks in government support for healthcare, pensions, and a wide range of other public services. It also calls for weakening labour market regulations that provide workers with job security.

These recommendations are being given in a context where the world economy is suffering from a massive shortfall of demand. In other words, tens of millions of people are unemployed right now because there is not enough spending to keep them employed. The IMF's programme is almost certain to reduce spending further leading to even larger shortfalls in demand and more unemployment.

But, the IMF says that we should trust them. The question we should all be asking is: "why?"

Where was the IMF when the housing bubble in the US and elsewhere was inflating to ever more dangerous levels? Was it frantically yelling at governments to rein in the bubbles before they burst with disastrous consequences? After all, what could possibly have been more important than warning of the dangers of these bubbles?
http://www.guardian.co.uk/commentisfree/cifamerica/2010/jun/28/useconomy-imf

[lonestarnot]

1. Who said we ever did?

[hlthe2b]

2. because they have enabled any number of 3rd world dictators...

to rip their populace blind, but in ways that ensure the benefit of the IMF and their wealthy backers? And, because the US is really not so different from those 3rd world banana republics, given the ongoing raping and pillaging of the Bushies* and all their corporate backers?

So, of course we should trust the IMF. Get the a copy of CONFESSIONS OF AN ECONOMIC HITMAN (John Perkins, 2004) if you don't think so...:shrug:

[Go2Peace]

3. The IMF is as guilty of economic ruination globally as the Republicans

are here.
Well, probably because they are all of the same cloth.

[newthinking]

4. The "austerity" push is just "Disaster Capitalism" in disguise

What a victory they could have to defeat Europe? What is interesting is that their economies, in many ways, are actually more stable than ours, they just don't have the power that we do over the global merchant system.

We *all* lose if they lose. This is already being used by the right to declare that Europe's ways would never survive.

[socialist_n_TN]

5. Of course it is............

It was tried out in Latin America out of the eyes of (most of) the world, but it was ALWAYS aimed at the social democracies of Europe. And even here in the USA.

[girl gone mad]

6. No one should trust the IMF.

Just take a look at their record of failure around the globe.

[notesdev]

7. Just look at who runs it

Same crowd as always - CFR/neocon types.

[inna]

8. They have plundered the second and third world, and now they have moved on to countries in the first

world. European and American working classes are in the cross-hairs now.

It's all about privatization and looting of public wealth.

[truedelphi]

9. Considering that one of the hallmarks of a third world banana republic is the corruption

Of the election process, I doubt that our country can be considered first or even second world any more.

And we certainly cannot handle catastrophes in the style iof a major power.

[inna]

10. Banana republic in term of corruption/oligarchy, but the most dominant country in the world

in terms of military and political power... The combination is quite scary.


Speaking of IMF, global economic crisis, and role of the financial oligarchy and corruption in the US...

here's a pretty amazing read (by a pretty unlikely source), I read the whole thing last weekend and highly recommend it, lots of insights there:

The Quiet Coup:

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). ... Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Basically, he says that the US is essentially a "banana republic", like you said, in terms of corruption and financial oligarchy, but it has unprecedented military and political power and control of world economy. A very dangerous situation...

[truedelphi]

11. Thank you for such a powerful read.

Those of us who have been squawking about Obama's choice of Geithner since January of 2009 understand this sentence completely:

One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises.

Obama's new argument, starting in late March 2009, is that he never understood the economics of our nation, and that he only paid attention to military issues when he was running for the Office of the Presidency, is now out there so we won't blame him. At least that is the only reason i can come up with why someone sitting at 1600 Pennsylvania Avenue would basically brag that they are stupid about economics. (Nixon certainly wouldn't have. Nor Carter, or Reagan. Sadly over the last twenty years, the president is not expected to be knowledgeable but just entertaining. You know, someone you'd like to have a brew with.) Now he's just a normal person like the rest of us - he doesn't get economics, and is more concerned about other things that are more interesting, like war.

We are so screwed. And for the time being, the big meme is that our economy is in recovery - a meme which is somehow arrived at and accepted even by people like Elizabeth Warren.