Wednesday, March 13, 2013

IMF as Valuable US Tool




[Excerpted] “The IMF has always been a valuable tool for advancing U.S. national interests globally,” the committee wrote — perhaps inadvertently validating one of the arguments China, Brazil and others have made for why they need a greater say at the fund.”

[Majia here: The committee at issue is the Bretton Woods Committee.]

Cited in Schneider, H. (2013, March 5) White House Seeks New Money for IMF http://www.washingtonpost.com/business/economy/white-house-seeks-new-money-for-imf/2013/03/05/95c0fcc4-85f1-11e2-98a3-b3db6b9ac586_story.html?wpisrc=nl_headlines

Majia here: The IMF is the ultimate neoliberal technology because it governs indirectly through financial incentives and lending contingencies. IMF government of nations’ finance helps expropriate wealth from the many to the few, globally.

Neoliberalism names the economic and political system that emerged out of the domestic and international economic policies of countries such as the U.S., U.K., and Chile in the late 1970s. Neoliberal economic policies, programs, and ideologies aimed to transform the global economy from the late 1970s onward.

Neoliberalism is often referred to as the Washington Consensus because Chicago School neoliberal ideologues shaped U.S. economic and political policies, beginning in the 1980s. Neoliberal principles were also enacted by Margaret Thatcher in the U.K. during the 1980s.

Neoliberal appointments to international lending and governance agencies such as the IMF, World Bank, and the World Trade Organization (WTO) ensured that neoliberal logics dictated the economic policies of developing nations through lending and aid contingencies.

Neoliberal reforms often included significant cuts in social spending in developing nations. Those citizens living in the developed economies were less directly impacted adversely by neoliberal policies until the economic collapse began.

However, neoliberal inspired and legitimized efforts to de-regulate finance globally ultimately produced the great financial storm, beginning December of 2007.

The financial crisis wrought by neoliberal policies and practices have produced disarray in financial institutions and markets and have helped wreck the domestic economies in the U.S., the U.K., Iceland, Greece, and Spain, among other nations.

The resulting global depression was accompanied by neoliberal assaults against social-welfare benefits in advanced economies. All cuts made in the name of fiscal discipline under austerity.

The IMF is an agent in advocating for austerity and roll backs of entitlements, using its scientific 'expertise' to justify policies that have the effect of concentrating wealth (although, I must acknowledge that certainly not all IMF experts are guilty as so charged, but the most powerful ones usually are).

Neoliberal logics and the financial crisis caused by their implementation together have shaped policy responses to two of the greatest environmental disasters of the 21th century, the BP Oil Spill and the Fukushima Nuclear Disaster.

2 comments:

  1. Majia,
    Like most things, you need to look deeper than the surface news about the IMF.

    It's true the IMF is hated by millions. There mission is to go into countries - usually third world and do economic analysis and try to improve the lives of those in that country.

    Then they loan money to the country with conditions of acceptance. They don't force acceptance of the conditions, and they certainly don't intend to enrichen the few.

    However, depending on how ruthless and dishonest the ruling group is, that does seem to occur, and a relatively small amount of the money goes to the people.

    So then, when poverty continues, there is a convenient scapegoat - the IMF, and now millions more people hate them, and the country is now required to pay back the loan.

    I liken it to loaning money to a reformed drug addict Father. He will convincingly show you how He's been through treatment, he is clean and all that, and his family does need money to get back on their feet, and buy new clothes for their kids, etc.. As soon as you give him the money he goes on a bender and blows it all. Then the children are still without clothes, but now Daddy blames the "loan shark" that wants his money every month.... and of course the kids believe him, because people like to hat institutions rather than individuals.

    James

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  2. Your point is well taken that the so-called "leaders" of recipient countries often pillage and create infrastructural projects that help only the western contractors and enclave interests while doing nothing to improve the infrastructure for the vast majority of that nation's population..

    However, I would note that when reformist leaders are elected in "emerging economies" they are quickly subject to all sorts of propaganda and special operations designed to undermine their rule.

    I strongly recommend you reading CONFESSIONS OF AN ECONOMIC HIT MAN. You can also watch an interview with the author, John Perkins, here
    http://www.youtube.com/watch?v=yTbdnNgqfs8

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