June 17, 2011
Granted that the IMF bails out countries and finances deficits against future growth, it is seen as a stabilising force in the world. But to what degree are weapons funding inherently part of this structural adjustment to a nation’s expectations? If the IMF did not bail out a country, then what would happen to them?
The financial crisis that has rocked the world was, in case anyone has forgotten, due to Lehman Brothers and the sub-prime mortgage markets collapsing. It was due to the raised expectations and false hope provided by signing up everyone who could never afford it, loans that were almost certain to collapse in a pile of bad debt. These bad debts were then onsold into the “market” that was seen as being completely able to direct what happened next. It could not. And what happened was a call on the also illogical insurances that backed Lehman deals. And that saw AIG being bailed out by the US government for 185 billion dollars.
The damage done was having to reverse all these ridiculous agreements for those who could not afford mortgages they should have avoided. It is the illusion of being able to stay above water that keeps the poor sods struggling before they sink. If they remained in their affordable, uncomfortable, low expectation lifestyle, there would have not been a problem. It is a need to have things as a right rather than as a reward that seems basic to this horror.
And the same goes for the IMF bailing out the economies where tax payers have bailed out banks. All very well to continue to support these banks that have flouted their responsibilities. But are new investment rules and responsibilities not just overdue?
Are we being taken for a ride by the likes of the IMF?
See New York Times