Michael Perelman wrote:Does anybody have any thoughts on the critique of
the IMF by Stiglitz and Sachs -- that the IMF is creating a deflationary
economy to save the banks?
Rakesh asks: There is still faith in the Keynesian panacea?
Though I don't know the content of the SS critique, my guess is that they
hope that the IMF could become the world's central bank, to apply
Keynesian-style monetary policy for the world as a whole, overcoming the
barriers that internationalization put in the way of purely national
monetary policies.
If so, that's pretty utopian to say the least. The IMF has been a
collection agency/enforcer for the banks and an international proselytizer
for the free-market gospel for so long that it's hard to imagine it
switching gears and becoming a world balance-wheel until after a world
debt-deflation depression and political crisis hits. (Sorry about the mixed
metaphors.) The US Fed didn't see itself as stabilizing the domestic
economy until after 1933 or so and even then its commitment was pretty
superficial.
It's hard to see the IMF combining its current role with a central bank
role. As Minsky points out, it often happens that the Fed finds itself
where its "function" as the "lender of the last resort" (a central aspect
of its role as organizer and leader of the banking cartel) conflicts with
its role as monetary stabilizer of the economy (a result of its political
charter). This conflict even applies when the Fed sees its entire
macrostabilization job as that of avoiding accelerating inflation.
One thing the Fed has that gives it a little backbone to lean toward
macrostabilization rather than being simply a shill for the banks is the
existence of a US state (and government), which can pressure it. Lacking a
world state, it's hard to see where the IMF's backbone would come from. Is
the IMF to be an agency of the US government? the OECD? the UN? what?
In addition, I should mention that monetary policy isn't as strong as in
the textbooks, but you knew that.
Coming back from seeing a large number of young economists tarting
themselves up in business suits in an effort to sell their asses to
employers (at the ASSA/AEA convention in Chicago), I see that pen-l is
discussing prostitution at extreme length and with much heat. I agree with
Michael that the topic has been mined, except for the gender dimension
(i.e., why it is usually women rather than men who are prostitutes). Is it
possible for someone to summarize the points of agreement and disagreement?
I know I couldn't do it. Good luck.
in pen-l solidarity,
Jim Devine [EMAIL PROTECTED]
http://clawww.lmu.edu/1997F/ECON/jdevine.html
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.)
-- K. Marx, paraphrasing Dante A.
