The Washington press corps — increasingly obsessed with National Enquirer-type rumors, hearsay and celebrititis — showed this past week what this trivialized redundancy costs the American people in important information denied.
A Sunday TV opinion show — Late Edition — replaced a program on the giant bank mergers, recently announced, with Paula Jones’ lawyer. Apparently the producers thought their audience was more interested in this story than one dealing with fast-growing concentration that is raising bank fees, reducing small business loans and other erosions of consumer, community and taxpayer rights. Two days later, the House Banking Oversight Subcommittee held the first Congressional hearings in six years on the International Monetary Fund on the occasion of an upcoming vote to give another $18 billion of your taxes to this secretive, autocratic organization of 182 countries in order to expand the bailouts of foreign regimes and their reckless oligarchies in hock to U.S. banks.
Although Clinton administration officials and other weighty witnesses were there in the hearing room, the Washington Post and the Wall Street Journal were absent. So too were the El Nino-immersed three television networks not there. After all, it was only $18 billion and the massive delegation of U.S. authority to this transnational organization to engage in even more corporatist regulation of matters more appropriately determined under open democratic procedures. It was only the prospect of more intrusion in the ways of countries to choose to protect their people from giant corporations.
I testified at this hearing as well, along with both progressive and conservative citizen groups opposed to the behavior of the IMF and its seemingly insatiable appetite for more taxpayer funds.
Collectively, the witnesses made four crucial points about the Fund.
First, the Fund’s emergency responses to financial crises results in massive bailouts for big lenders. With the Asian financial crisis, the IMF has committed to more than $35 billion in loans to South Korea, Indonesia and Thailand. But as soon as the money goes into those countries, it goes right back out — to repay big banks in New York and the world’s other financial centers. Under the IMF bailout plans, almost all of the burden of bad loans is placed on borrowers –the private corporate lenders get off with little sacrifice. Compounding the problem, bank bailouts today precipitate more financial crises tomorrow. When banks and investors know they can expect to be bailed out in the future, they are more prone to engage in risky behavior. Thus the 1995 IMF/U.S. bailout of investors in Mexico paved the way for last year’s financial crisis in Asia, and the bailout of investors in Asia makes another crisis all the more likely.
Second, in exchange for providing loans to developing countries, the IMF imposes onerous “structural adjustment” policies that make life miserable for people around the world. IMF demands for government spending cutbacks lead to cuts in consumer subsidies for basic items like bread and to the elimination of critical social services; and IMF demands for higher interest rates throw economies into recession, putting hundreds of thousands or millions of people out of work. The IMF also insists that poor countries promote exports — meaning workers in the United States are forced to compete even further with cheap imports.
Third, past Congressional efforts to hold the IMF accountable have failed. In the past, the Congress has directed the U.S. delegate to the IMF to use “voice and vote” to support worker rights, environmental protection, human rights and other worthy aims. But, it turns out, the delegates almost never vote and there is precious little evidence that the U.S. representative effectively advocates the positions designated by Congress.
Representative Bernie Sanders, I-Vermont, pointed out that the U.S. State Department listed Indonesia as an authoritarian country in its annual human rights report, but that the United States voted for IMF loans to Indonesia despite a Congressional requirement that it oppose loans to human rights abusers. The Clinton officials did not have a convincing response.
Finally, despite being a significant cause of the Asian financial crisis through its strong-armed advice to Asian countries to open up to short-term foreign investment, the IMF now wants not only more money, but more power. It is proposing to expand its mission to include forcing countries to eliminate controls on capital flows — perhaps including even laws which prevent foreign ownership of television stations. You will be hearing much more about this issue in coming months.
But you wouldn’t even have known that this important Congressional hearing took place from watching the nightly news.
To find out for yourself what happened, contact the House Banking Oversight Subcommittee at 212 O’Neill House Office Building, Washington, D.C. 20515, or go to their web page, www.house.gov/banking. And then tell your representative to vote against any more money for the corporatist IMF.