by Patrick J. Buchanan – December 1, 1997
If the people of South Korea were starving, Americans would send food. If they were victims of a natural disaster, an earthquake or typhoon, planeloads of American doctors and nurses, shiploads of medicine and supplies, would be instantly on the way.
But Asia’s financial crisis is not a natural disaster; it is man-made, the work of corrupt and incompetent political elites, crony capitalists and idiot-investors who deserted their own countries to chase hot profits in Asia. Obligations of charity do not apply here. What these avaricious bankrupts want Americans to do is to pick up the hotel and bar bills from their decade-long orgy. No thanks.
Ask yourself: Why does Seoul suddenly need $20 billion? Is it because Koreans are suffering? No. South Korea needs $20 billion pronto because it has $20 billion in short-term loans coming due by year’s end. Korea hasn’t got the cash, and its creditors are howling.
The IMF bailouts of Korea, Thailand and Indonesia, which could put Western taxpayers on the hook for $100 billion, are to save the faces of these Asian regimes and the fannies of “investors” who want back every dime they put up — without missing a payment. When you know who is holding that $20 billion in debt, you will know for whose benefit the Global Economy is designed to work.
But why should U.S. taxpayers be put on the hook by the IMF, to make good failed Asian investments? Let those who made the hot profits in Asia eat the losses. Let the market work. Let the Asian debtors and their creditors negotiate themselves the terms of repayment, and keep U.S. taxpayers out for once.
The hour is at hand for Congress to run a sword through this corrupt global system. All we need do is follow the counsel of ex-Treasury Secretary Bill Simon, the Heritage Foundation, and the American Enterprise Institute, and kill the IMF. Then the gods of the markets can rule again. Don’t our free traders believe in that?
This November, in a courageous act, the House voted down Mr. Clinton’s request for $3.5 billion to replenish the funds of the IMF. Prediction: Mr. Clinton will come back from Vancouver Asia-Pacific summit and demand even more money to bail out Robert Rubin’s Wall Street buddies. But if Congress will hold firm and deny the White House another dime for the IMF, it can strike a mortal blow against a system crafted to endlessly loot the American nation of its wealth.
What is the IMF? It was created At Bretton Woods in 1944 as a fund from which governments could borrow to maintain the fixed rates of exchange of their currencies. But in 1971, Richard Nixon took America off the gold standard; the exchange-rate system broke down; the dollar and other currencies were allowed to “float” in a free market. The need for an IMF was over.
But the IMF refused to fold its tent. It set itself up as overseer of the Global Economy and lender of last resort to bankrupt regimes. Four times since 1970 the IMF has bailed out Mexico. In the last bailout, the IMF gave $17 billion in fresh loans to enable President Zedillo to pay off his New York creditors, who thus walked away from their risky loans, while American citizens are now exposed to the lion’s share of that $17 billion.
How is Mexico to repay the IMF? The devaluation of the peso by 50 percent doubled the price of U.S. goods in Mexico and cut by 50 percent the price of Mexican exports. Devaluation thus wiped out the tiny U.S. trade surplus. And when U.S. companies saw the price of Mexican labor had been cut in half in dollars, they laid off their workers, shut down their U.S. plants and headed south for the Rio Grande.
This, then, is the great trade-off of the Global Economy: Wall Street gets reimbursed, while Main Street loses its export market, its factories and its jobs, and is put on the hook by the IMF, so “investors” on Wall Street do not have to swallow really big losses. We do it all — to make the world safe for Goldman Sachs!
The Global Economy is like a high-stakes poker game, where the big players pocket their winnings, while the “house” — i.e., the taxpayers — makes good their losses at the end of a bad night.
To do in Thailand, Indonesia and South Korea what it did in Mexico, the IMF will need billions more in lending authority from the U.S. government We ought not let this happen. The looting of our country must stop. And it can be stopped, if the agencies that thieve and redistribute U.S. wealth — the IMF and World Bank — are denied all power to put at risk the credit of the American people.
Time for Congress to end these bailouts, privatize the World Bank and abolish the IMF.