Tuesday, April 13, 2010

Scary: Felix Rohatyn on Domestic IMF

Felix Rohatyn was quoted in today's WSJ (C1) as arguing that a "domestic IMF" is necessary to help American cities and states prevent budget crises.

I was immediately suspicious. IMF policies in the developing world designed as "debt relief" are notorious for enforcing privatization schemes that loot the countries of their public holdings (such as water and other basic resources) and that require draconian domestic austerity (a.k.a. major cuts in social, health, and educational spending).

So, I looked up Felix Rohatyn and this is what Schiller Institute had to say about him:

"Rohatyn pulled a debt-recycling scheme from Schacht's bag of tricks [Hitler's financial czar, the Reichsbank president and later Nazi Economics Minister, Hjalmar Horace Greeley Schacht]. It took in the old debt, created new debt, and then backed it with income streams looted from New York City's operating budget; to pay for this, Rohatyn demanded the imposition of draconian levels of austerity and service cuts, and then sought a bankers' dictatorship—the now-infamous Municipal Assistance Corporation or “Big MAC,” and its Emergency Financial Control Board (EFCB), the latter having veto power over all city contracts and budgets for more than two decades..."

Majia here: It is precisely this type of austerity and dictatorial power that concerns me. See my next post on the abuse of power currently going on at the Cave Creek School District as an example of what can happen in the name of "budget cuts."

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