by Patrick J. Buchanan – October 13, 1997
The IMF has become the 911 number immediately
called in times of trouble by such champions of free
markets as Citicorp and Goldman, Sachs. With all that
IMF money, the Thailands and Mexicos are spared the
consequences of their fiscal incompetence, and Wall
Street’s heavy hitters are spared the consequences of
their stupid investments. The global economy is a
rigged game, rigged so Third World politicians, rich
investors and global corporations win — and U.S.
taxpayers and workers lose…
One need not be a regular reader of the Financial Times to realize that the Asian “tigers,” the go-go economies of the Far East, have become the pussycats of the Pacific Rim. Thailand, Malaysia, the Philippines and Indonesia have been de-clawed and neutered. Their stock markets have tanked; their currencies have tumbled.
Some Americans may, uncharitably, take smug satisfaction that the noisy celebrants of “Asian values” are taking their lumps. Boastful, blundering, bribing, these regimes have long hectored us, and as this year’s losers in the Big Casino of the Global Economy, they are unlikely to evoke much sympathy. They over-spent and over-indulged. Now, they must pay the bill. The fat years are over; lean years lie ahead. That is the way the world works. Right?
Wrong. Even as we speak, the International Monetary Fund is riding to the rescue. Thailand is already the beneficiary of a $17 billion bailout, and IMF teams are in Jakarta and Manila.
Purpose: to pump billions of fresh dollars into these regimes so they will keep paying off their foreign creditors. The IMF has become the 911 number immediately called in times of trouble by such champions of free markets as Citicorp and Goldman, Sachs. With all that IMF money, the Thailands and Mexicos are spared the consequences of their fiscal incompetence, and Wall Street’s heavy hitters are spared the consequences of their stupid investments. The global economy is a rigged game, rigged so Third World politicians, rich investors and global corporations win — and U.S. taxpayers and workers lose.
With Asian currencies tumbling like dominoes, the IMF is going to need lots more money. At its Hong Kong conclave, it asked for a whopping 45 percent increase in its capital fund — to $285 billion. The IMF calls it the New Arrangement to Borrow (NAB); a better name would be Bailouts Without End. Yet, the U.S. Treasury seems amenable.
No way. Not another dime should go to the IMF or its neo-socialist little sister the World Bank. These leeches of American capital should have been exterminated like the parasites they are, decades ago.
As Third World regimes are being bailed out, U.S. taxpayers are being put on the hook for loans that will never be repaid, and U.S. workers are losing jobs. When the IMF ensures that investors in Mexico or Thailand are paid 100 cents on the dollar, it cuts the risk of Third World investments and makes Asia more attractive than America. Thus is capital, seed corn of the U.S. economy, siphoned off to foreign lands.
When the IMF bails out a country, it also pressures the regime to devalue its currency, cut imports and increase exports to raise the cash to pay back the IMF loans. Thus, the end result of IMF policies on any nation is that: A) It will import less than it otherwise would from the United States, costing American jobs. B) It will export more than it otherwise would to the United States, costing more American jobs. C) It will become — because the dollar wages of its workers have been slashed by devaluation — a more attractive place for U.S. transnational companies to relocate factories, costing still more American jobs.
Consider what happened after the $50 billion Mexican bailout from the United States and IMF. Mexico’s exports to the United States exploded, a huge U.S. trade deficit appeared, and U.S. corporations raced to Mexico to put up new plants to take advantage of Mexican labor, whose wages, in dollars, had been cut in half by devaluation. Thus did the rescue of Wall Street entail the sellout of Main Street.
How is it, people ask, that seven years into a recovery median family income is $1,000 below where it was when Ronald Reagan left office, though American men work 140 hours more every year than they did in 1970? Because the game is rigged against the American worker, and his family’s standard of living will never again rise as once it did, until this global financial elite is dethroned.
Some Democrats are coming to understand this. But a GOP Senate is now supporting $3.5 billion more for the IMF, on top of the $47 billion already contributed. Conservatives are thus subsidizing the bailout of regimes that routinely bash the United States and of Wall Street investors who just love Bob Rubin and Bill Clinton. And they are putting U.S. taxpayers on the hook for billions of dollars in IMF loans, while selling out Middle America.
And they wonder where all the Reagan Democrats have gone.