Thursday, Feb 25, 2010
The International Monetary Fund operates primarily as a banker bailout machine
Huffington Post: The IMF Destroys Iceland and Latvia
They cajole and threaten the leaders of governments worldwide to pay off the failed bets of the big bankers using the taxpayer funds of their countries. To those who think austerity is the smart, cute thing to do, just look at how the third world has been held back since WWII by these bankers. Imagine how much better the world would have been had the third world been busy producing things and inventing better mouse traps. In this game of debt and servitude, we all loose.
Posted by freemanphil @ 10:01 AM (1268 views) Add Comment
34 Comments
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1. freemanphil said...
The International Monetary Fund operates primarily as a banker bailout machine. They cajole and tempt and confuse and threaten the leaders of governments worldwide to pay off the failed bets of the big bankers using the taxpayer funds of their countries. This has been going on a long time, at least since the early 1980s.
Thus, I am not in the teeniest bit surprised that the same thing is happening today in Iceland and Latvia.
This article by Michael Hudson has some of the details:
For the past decade Iceland has been a kind of controlled experiment, an extreme test case of neoliberal free-market ideology. … Is there a limit, a point at which government will draw a line against taking on public responsibility for private debts beyond any reasonable capacity to pay without drastically slashing public spending on education, health care and other basic services? …
The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings. Resentment is growing not only toward those who ran up these debts — Iceland’s bankrupt Kaupthing and Landsbanki with its Icesave accounts, and heavily debt-leveraged property owners and privatizers in the Baltics and Central Europe — but also toward the neoliberal foreign advisors and creditors who pressured these governments to sell off the banks and public infrastructure to insiders.
This is the trick: replacing private debts with public obligations. Lots of people loaned money to banks and corporations in Iceland. They are now facing huge losses.
2. icarus said...
Michael Hudson has been saying these things for some time, and with some justification. To get the IMF view, which surprisingly is not too different from MH's, see http://www.theatlantic.com/doc/200905/imf-advice
It's written by a former chief economist of the IMF. He says most crises are caused by financial and political elites, usually in 'developing' or 'emerging' countries that did most of the things that financial elites in the west did in the run-up to the current crisis - not out-and-out corruption, like an African dictator doing a runner with loadsamoney, but hubris and excessive risk-taking and balance-sheet expansion that comes from knowing your buddies in the government will bail you out. Eventually even this isn't enough and the IMF is called in To MH's account he adds that when this happens some sections of the elite have to take the hit as well as timmy taxpayer. He says the difference between such countries and the US is that the US is wealthy and powerful and doesn't run out of foreign currency because it prints the currency used in foreign trade.
3. rumble said...
Jabba the Puck.
4. Icarus said...
The former economist of the IMF argues that there's no difference in principle beteen the US and the emerging countries that received the IMF loans. He claims that most of the recipients became normally functioning economies soon afterwards. There's no reason the US can't be reconstructed, except one:
Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money—or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years—as Japan did during its lost decade—never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past—involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.
5. icarus said...
The former IMF economist argues that most IMF loan recipients soon got back on their feet economically after receiving the loans. He says there's no difference in principle between them and the US, which could also get back on its feet if it went thro' a process similar to the ones these recipients went through. But there's one problem. He says:
Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money—or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years—as Japan did during its lost decade—never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past—involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.
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7. icarus said...
I've visited youtube. What's it like to actually live there?
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9. mountain goat said...
Nope I still haven't "woken up", keep it up though Phil, don't give up me yet.
10. Si said...
First to comment on own post. Surely a telltale sign of a loon.
11. freemanphil said...
MG, I can tell you are asleep, because you employ cliché's to fuel cognitive dissonance.
12. mountain goat said...
FMP interesting, but don't you mean I employ cliché's to quell cognitive dissonance brought on by your insightful revelations on this site?
13. freemanphil said...
MG, you categorize my comments and put them to one side, using cliched comments to dismiss them. You prefer this than to engage in real debate and ask actual questions. It is very much how Middle Class Britain behaves. And underneath this is an ego that wants to think that the system operates on their behalf. That they are important and wouldn't be double crossed, well you have been, so get used to it.
14. icarus said...
FMP - John Perkins (the economic hitman @5) was an insider and his account of the realpolitik behind the history of the last few decades is very plausible. Most of history is the same - most historians simply don't have the material to trace 'what really happened and why'. Irish history over the last century, for example, is a charade - Britain put its man in power (de Valera) and he did what Britain wanted, including when he was having public 'rows' with Churchill and other British politicians. Most of what went on in Eire had to do with Britain/Eire manipulating American perceptions to weaken the Irish-Americans who wanted an end to Partition or, going back to the end of WWI, to get American to turn the $40bn war-loan owed to it by Britain into a soft loan, or to get America to enter WWII. Regarding what John Perkins says about infiltrating the protection ring around intransigent politicians so that they end up being assassinated by their own bodyguards, this is what almost certainly happened to Irish politician Michael Collins in 1922.
OK, so how does this relate to the IMF? John Perkins talks about the World Bank providing funding for the Americanisation of strategic parts of the world. How specifically does the IMF function to further western interests? Does it provide loans to enable countries to keep up their repayments on outstanding loans by western banks so that the latter don't have to write them down/off? Does it actually enable countries to get back on their feet after a blowout in their banking sectors?
15. mountain goat said...
FMP - actually I don't expect justice from society. I think it requires constant effort to achieve and maintain any justice. I grew up in South Africa after all, where one cannot take justice for granted, as many in this country seem to.
I have greater freedom from poverty, disease, oppression than most of my ancestors, so I don't understand your constant rage and sense of injustice. Simply because there are some people that have more than you? I am sure they have earned their ill gotten gains with anxiety and sleepless nights, so let them reap what they have sown I say. Another cliché I'm afraid.
As I explained yesterday, hold whatever views you like but I will resist your evangelizing.
16. braindeed said...
freemanphil said...@1
"The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings"
Rightly so, a tiny fishing based economy had a punt at being clever, and got found out. Who else should pay?
17. icarus said...
14 The issue is whether john citizen should impoverish himself to pay for the sins of a kleptocracy. There are other issues too regarding Iceland and Latvia, which Michael Hudson has elaborated in his various essays.
18. icarus said...
Make that braindeed @15 2.05PM
19. freemanphil said...
"I have greater freedom from poverty, disease, oppression than most of my ancestors, so I don't understand your constant rage and sense of injustice"
This is one of the problems of having so much immigration. We have people who have fled dictatorships, who are not aware of what real freedom under British Common Law means. And S.Africa is a Communist state now, after Kissinger double crossed your country and fed you to the dogs.
Sure, Britain is more free than South AfriKa, but I just have higher standards than you. We have plenty of people who fled Communist Eastern Europe who love the freedom in Britain, but I don't care for their standards either. And, with regards to the economic hit man, those are the folk who convinced Blair to take loans to pay for Iraq war, to bankrupt Britain, and more.
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21. freemanphil said...
22. freemanphil said...
To qualify, I have many S.African friends, I am not racist, but, we should not have the direction of Britain led by the expectations of those who have suffered tyranny. We should base the freedom we seek on the standards of those who faught in WWII for the independence of Britain from the National and International Socialism that the Nazi's represent.
23. braindeed said...
17. icarus said...
14 The issue is whether john citizen should impoverish himself to pay for the sins of a kleptocracy
I expressed an opinion on that question in my previous post. Succinctly, I thought.
Iceland was happy to enjoy the boom in property and living standards during the boom years, ergo the sheep get eaten when the wovles get hungry,
In relation to Uk, same question, I'd say it's payback time for thirty years of deregulation, laissire faire, and beggar thy neighbour.
The real issue is why we don't have a public intellectual debate about restructuring 'money' and 'debt' along the lines of Abraham Lincolns
solution, we should have the kleptocracy's nuts in a vice.
http://wiki.answers.com/Q/Why_is_Abraham_Lincoln_on_the_five_dollar_bill
24. braindeed said...
17. icarus said...
14 The issue is whether john citizen should impoverish himself to pay for the sins of a kleptocracy
I expressed an opinion on that question in my previous post. Succinctly, I thought.
Iceland was happy to enjoy the boom in property and living standards during the boom years, ergo the sheep get eaten when the wovles get hungry,
In relation to Uk, same question, I'd say it's payback time for thirty years of deregulation, laissire faire, and beggar thy neighbour.
The real issue is why we don't have a public intellectual debate about restructuring 'money' and 'debt' along the lines of Abraham Lincolns
solution, we should have the kleptocracy's nuts in a vice.
http://wiki.answers.com/Q/Why_is_Abraham_Lincoln_on_the_five_dollar_bill
25. icarus said...
braindeed 2.36PM I didn't see that since I didn't search HPC for your collected works. Are you saying that impoverishment of people around the world resulting from the recession/depression is payback for their having enjoyed good living standards? That all are equally responsible for inflating bubbles? There's no payback for the kleptocracy. The Russian and Icelandic mafias probably meet regularly for a high time at the blue lagoon in Iceland.
26. braindeed said...
icarus@ 24 said....
"Are you saying that impoverishment of people around the world"
I was talking about the fishermen specifically, don't you agree?
"There's no payback for the kleptocracy"
I concur - please review my last post.
"That all are equally responsible for inflating bubbles?"
See part about "payback time for thirty years of deregulation, laissire faire, and beggar thy neighbour" - the electorate is as close to 'we' as exists currently If that model offends you, then.perhaps you hanker after the vacant 'Chairman' job.....could be room for a new primary coloured book.
27. icarus said...
So you're happy to see payback for ordinary Icelanders even if there is none for kleptocrats? Leaving aside cheap sarcasm, if you think that all are equally responsible for inflating bubbles then take a look at how all this came about
http://newleftreview.org/view=2759
28. freemanphil said...
Braindeed, the Icelandic people were kept in the dark about this. They were doublecrossed. You honestly think the Icelandic people willingly allowed the Icelandic banks to defraud them? Put them in prison and cancel the debt.
29. braindeed said...
As stated in previous post "the electorate is as close to 'we' as exists"
They Icelanders were'nt invaded by an foreign force - they went along with the ride because it felt good. That's life, fail to pay your credit card, and they take it away.
People vote for governments......governments screw up......peoples choice.
I'm miffed that you see an opposing view as sarcasm, I respect your right to a differing view, one that your actually thinking about - afford me the same respect please.
30. braindeed said...
Asd a rider: I do think some of the Bankers and Finaviers have acted criminaly - I'd like to see jail sentences for fraud and repatriation of assets.That Mervyn King and all Banking chairmen have'nt resigned or been forced out, is an affront - but where's the Party who agrees?
31. icarus said...
28. Sarcasm isn't your opposing view. It's the last line of your 3.39PM post. So don't get self-righteous about respect.
32. braindeed said...
braindeed @3,39pm
then.perhaps you hanker after the vacant 'Chairman' job.....could be room for a new primary coloured book.
....refering to the possibility of a coup d'etat, either here or in any major eonomy (Greece perhaps).......presuming democracy is in it's death throws. Try reading it in a less ego-centric fashion, touchy. Shouting the loudest does'nt imply the soundest logic.
33. icarus said...
Egocentric? Addressed to me - "perhaps you hanker after the vacant chairman job (cont p94)". And who's shouting? And WHAT are you on about? If I don't reply to your next post it will be because I'll be choosing to ignore anything you write from now on.
34. braindeed said...
icarus@32
Egocentric? Addressed to me!!!!!!!
Now you've got me.....can't decide whether you're being ironic, or just plain paranoid.