{"id":50530,"date":"2014-12-01T12:00:14","date_gmt":"2014-12-01T12:00:14","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=50530"},"modified":"2015-05-05T21:27:15","modified_gmt":"2015-05-05T20:27:15","slug":"does-the-name-strauss-kahn-ring-a-bell-trotsky-at-the-imf","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2014\/12\/does-the-name-strauss-kahn-ring-a-bell-trotsky-at-the-imf\/","title":{"rendered":"Does the Name “Strauss-Kahn” Ring a Bell? – Trotsky at the IMF"},"content":{"rendered":"
\"Trotsky\"<\/a>

Trotsky<\/p><\/div>\n

25 Nov 2014 – <\/em>The International Monetary Fund has finally admitted that\u00a0it was wrong to recommend austerity as early as it did in 2010-2011. The IMF now agrees that it should have waited\u00a0until\u00a0the US and EU economies were on a sustainable growth-path before advising them to trim their budget deficits\u00a0and reduce public spending.\u00a0 According to a report issued by the IMF\u2019s research division, the Independent Evaluation Office (IEO):\u00a0 \u201cIMF advocacy of fiscal consolidation proved to be premature for major advanced economies, as growth projections turned out to be optimistic\u2026This policy mix was less than fully effective in promoting recovery and exacerbated adverse spillovers.\u201d<\/p>\n

Now there\u2019s an understatement.<\/p>\n

What\u2019s so disingenuous about the IMF\u2019s apology,\u00a0 is that the bank knew exactly what the effects of its policy would be, but stuck with\u00a0its recommendations\u00a0to reward its constituents.\u00a0 That\u2019s what really happened. The\u00a0only reason it\u2019s trying to distance itself from those decisions now, is to make the public think it was all\u00a0 just a big mistake.<\/p>\n

But it wasn\u2019t a mistake. It was deliberate and here\u2019s the chart that proves it:<\/p>\n

\"(Democrats<\/a><\/p>\n

(Democrats Reap What They Sowed<\/a>, Rob Urie, CounterPunch)<\/p>\n

There it is, six years of policy in one lousy picture. And don\u2019t kid yourself, the IMF played a critical role in this wealth-shifting fiasco. It\u2019s job was to push for less public spending and\u00a0deeper fiscal cuts while the Central Banks flooded the\u00a0financial markets with liquidity (QE). The results are obvious, in fact, one of the Fed\u2019s own officials, Andrew Huszar,\u00a0 admitted that QE was a massive bailout for the rich.\u00a0 \u201cI\u2019ve come to recognize the program for what it really is,\u201d said Huszar who actually worked on the program,\u00a0\u201cthe greatest backdoor Wall Street bailout of all time.\u201d\u00a0 There it is, straight from the horse\u2019s mouth.<\/p>\n

So now\u00a0the IMF wants to throw a little dust in everyone\u2019s eyes by\u00a0making it look like it was\u00a0a big goof-up\u00a0by well-meaning but misguided bankers.\u00a0And the media is helping\u00a0them by its omissions.<\/p>\n

Let me explain: Of the more than 455 articles on Google News covering the IMF\u2019s mea culpa, not one piece refers to the man who was the IMF\u2019s Managing Director at the time in question. Doesn\u2019t that strike you as a bit odd?<\/p>\n

Why would the media scrub any mention of Dominique Strauss-Kahn from its coverage? Could it be that (according to NPR):<\/p>\n

\u201cThe IMF\u2019s managing director wanted to give Greece, Portugal and Ireland the time needed to put their accounts in order, and he also argued for softening the austerity measures associated with the bailouts for those countries.<\/em><\/p>\n

Greek economists say that under Strauss-Kahn\u2019s leadership, the IMF was a counterbalance to the strict austerity policies favored by northern European leaders. In fact, according to the daily Le Monde, Strauss-Kahn is fond of calling those who argue for tighter austerity \u201cfous furieux,\u201d which roughly translates as \u201cmad men.\u201d<\/em><\/p>\n

Strauss-Kahn\u2019s view is that shock-therapy measures imposed on Greece and other European countries with sovereign debt crises will lead only to economic recession and severe social unrest.<\/em><\/p>\n

Several commentators pointed out Monday that at a time of turmoil in the eurozone and division among European leaders, it was the IMF, under Strauss-Kahn\u2019s leadership, that kept the eurozone\u2019s rescue strategy on track.<\/em><\/p>\n

The Financial Times said that the IMF\u2019s single most important influence in the resolution of the eurozone crisis was political \u2014 amid a lack of political leadership, the paper said, the IMF filled a vacuum.<\/em> (IMF Chief\u2019s Arrest Renews Euro Debt Crisis Fears<\/a>, NPR)<\/em><\/p>\n

Ah-ha! So Strauss-Kahn wasn\u2019t on board with the IMF\u2019s shock doctrine prescription. In fact, he was opposed to it.\u00a0\u00a0So there were voices for sanity within the IMF, they just didn\u2019t prevail in the policy debate.<\/p>\n

But why would that be, after all, Strauss-Kahn was the IMF\u2019s Managing Director, his views should have carried greater weight than anyone else\u2019s, right?<\/p>\n

Right. Except DSK got the ax for a sexual encounter at New York\u2019s ritzy Sofitel Hotel. So the changes he had in mind never took place, which means that the distribution of wealth continued to flow upwards just like the moneybags constituents of the IMF had hoped for.<\/p>\n

Funny how that works, isn\u2019t it? Funny how it\u2019s always the Elliot Spitzers, and the Scott Ritters, and the Dominique Strauss-Kahn\u2019s who get nailed for their dalliances, but the big Wall Street guys never get caught. Why is that?<\/p>\n

The fact is,\u00a0Strauss-Kahn was off the reservation and no longer supported the policies that the establishment elites who run the IMF wanted to see implemented.\u00a0 They felt threatened by DSK\u2019s Keynesian approach and wanted to get rid of him.\u00a0That\u2019s it in a nutshell.<\/p>\n

Do you know why the bigwig plutocrats hated DSK?<\/p>\n

It had nothing to do with his\u00a0sexual acrobatics at the Sofitel Hotel. Nobody cares about that shite. \u00a0 What they were worried about were his plans for the IMF which he laid out in a speech he gave at the Brookings Institution in April 2011, one month before he got the\u00a0boot. The speech got very little attention at the time, but\u2013 for all practical purposes\u2013 it was DSK\u2019s swan song.\u00a0 And, I think you\u2019ll see why.<\/p>\n

The experience must have been a real shocker for the gaggle of tycoons and hangers-on who attend these typically-tedious gatherings. Instead\u00a0of praise for \u201cmarket discipline\u201d, \u201clabor flexibility\u201d and \u201cfiscal consolidation\u201d, Strauss-Kahn delivered a rousing 30 minute tribute to leftist ideals and wealth-sharing sounding more like a young Leon Trotsky addressing the Forth International than a cold-hearted bureaucrat heading the world\u2019s most notorious loan sharking operation. By the time the speech ended, I\u2019m sure the knives were already being sharped for the wayward Managing Director. To put it bluntly, DSK\u2019s goose was cooked. Here\u2019s a clip from the speech that will help to explain why:<\/p>\n

\u201c\u2026The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes\u201d\u2026<\/em><\/p>\n

Not everyone will agree with the entirety of this statement. But what we have learnt over time is that unemployment and inequality can undermine the very achievements of the market economy, by sowing the seeds of instability\u2026<\/em><\/p>\n

..\u00a0the IMF cannot be indifferent to distribution issues\u2026<\/em><\/p>\n

Today, we need a similar full force forward response in ensuring that we get the recovery we need. And that means not only a recovery that is sustainable and balanced among countries, but also one that brings employment and fair distribution\u2026<\/em><\/p>\n

But growth alone is not enough. We need direct labor market policies\u2026<\/em><\/p>\n

Let me talk briefly about the second lung of the social crisis\u2014inequality\u2026IMF research also shows that sustainable growth over time is associated with a more equal income distribution\u2026<\/em><\/p>\n

We need policies to reduce inequality, and to ensure a fairer distribution of opportunities and resources. Strong social safety nets combined with progressive taxation can dampen market-driven inequality. Investment in health and education is critical. Collective bargaining rights are important, especially in an environment of stagnating real wages. Social partnership is a useful framework, as it allows both the growth gains and adjustment pains to be shared fairly\u2026<\/em><\/p>\n

We have also supported a tax on financial activities (and) organized jointly with the ILO \u2026 to better understand the policies behind job-creating growth\u2026<\/em><\/p>\n

Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF\u2019s mandate. It must be placed at the heart of the policy agenda. Thank you very much.\u201d\u00a0\u00a0 (The Global Jobs Crisis\u2014 Sustaining the Recovery through Employment and Equitable Growth<\/a>, Dominique Strauss-Kahn, Managing Director IMF, April 13, 2011)<\/em><\/p>\n

Can you imagine the\u00a0chorus of\u00a0groans that must have emerged from the crowd when Strauss-Kahn made his pitch for \u201cprogressive taxation\u201d, \u201ccollective bargaining rights\u201d, \u201cprotecting social safety nets\u201d, \u201cdirect labor market policies\u201d and\u00a0 \u201ctaxes on financial activities\u201d? And\u00a0how do you think the crowd reacted\u00a0when he told them he\u2019d settled on a more enlightened way to distribute the wealth they\u2019d accumulated over a lifetime of insider trading, crooked backroom deals and shady business transactions?<\/p>\n

Do you think they liked that idea or do you suppose they lunged for their blood pressure medication before scuttling pell-mell towards the exits?<\/p>\n

Let\u2019s face it; Strauss-Kahn was headed in a direction that wasn\u2019t compatible with the interests of the cutthroats who run the IMF. That much is clear. Now whether these same guys concocted the goofy \u201choney trap\u201d at the Sofitel Hotel, we may never know.\u00a0 But what we do know is this: If you\u2019re Managing Director of the IMF, you\u2019d better not use your power to champion \u201cdistribution\u201d or collective bargaining rights or you\u2019re wind up like Strauss-Kahn, dragged off to the hoosegow in manacles wondering where the hell you went wrong.<\/p>\n

DSK was probably\u00a0done-in by the people who hated his guts. Now they want to polish-up their image by rewriting\u00a0history.<\/p>\n

And, you know, they\u2019re rich enough to\u00a0pull it off,\u00a0too.<\/p>\n

____________________________<\/p>\n

Mike Whitney<\/em>\u00a0<\/strong>lives in Washington state. He is a contributor to\u00a0<\/em>Hopeless: Barack Obama and the Politics of Illusion<\/a>\u00a0(AK Press).\u00a0Hopeless is also available in a\u00a0Kindle edition<\/a>.\u00a0He can be reached at\u00a0fergiewhitney@msn.com<\/a>.<\/em><\/p>\n

Go to Original \u2013 counterpunch.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Let\u2019s face it; Strauss-Kahn was headed in a direction that wasn\u2019t compatible with the interests of the cutthroats who run the IMF. That much is clear. Now whether these same guys concocted the goofy \u201choney trap\u201d at the Sofitel Hotel, we may never know.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[197],"tags":[],"class_list":["post-50530","post","type-post","status-publish","format-standard","hentry","category-special-feature"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/50530","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=50530"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/50530\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=50530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=50530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=50530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}