Money Is Power An Inside View of the IMF's Massive Global Influence

By and Ullrich Fichtner

Part 4: Shedding Its Image as the Headquarters of Hardcore Neoliberalism


An IMF director leads a glamorous life. There is only one photo hanging on the wall in Strauss-Kahn's office in Washington. It depicts Strauss-Kahn and US President Barack Obama, smiling congenially like two boys in the same sports club.

Now Strauss-Kahn is sitting in seat 4F, a window seat, on an Air France flight from Paris to Oslo, on his way to one of those conferences with interchangeable names. The title of today's meeting is: "The Challenges of Growth, Employment and Social Cohesion." Strauss-Kahn falls asleep as the plane taxis toward the runway. He is a weary globetrotter, a man whose life consists largely of trips and flights from one time zone to the next, a brutal life that only someone who believes in himself can endure.

The IMF is hosting the Oslo conference jointly with the United Nations' International Labor Organization (ILO). This pairing is significant, because the IMF and the ILO are natural enemies, "like dogs and chickens in one room," says Strauss-Kahn. The Fund pushes through reforms against social opposition. While the ILO is on the side of those who organize the protests at the World Social Forum, the Fund has consistently been the target of the greatest amount of popular rage. It has repeatedly been described as an evil, anonymous power that does its utmost to prevent a different world from taking shape.

'We Need New Fuel'

At 10 p.m., Strauss-Kahn asks the SPIEGEL reporter to come into the lobby for a brief conversation. He looks cleaned up, almost fatherly, speaking in a pleasant voice that's part of his capital, along with his wrinkled face and the bags under his darting eyes.

He emphasizes the importance of the conference with the ILO, and says that it shows that the IMF isn't merely concerned about macroeconomics, but also about social issues. The crisis, says Strauss-Kahn, isn't over yet. "We need new fuel to get out of the crisis," he adds, pointing out that growth isn't the only key element. "Growth without jobs will be no good," he says, and insists that "jobless growth" must be avoided. This explains the meeting with the ILO. "We have changed. The unions have changed. Of course, we still don't necessarily love each other, but we're talking with each other and we're learning from one another."

Never before has an IMF director spoken this frankly. Before Strauss-Kahn, the IMF was a factory that spat out blueprints which national governments were forced to implement, without objection, if they hoped to receive IMF loans. A country that refused to fulfill the conditions, even if it did so because it feared the social repercussions, was thrown off the credit merry-go-round. The Asian countries, in particular, turned away. The crises in Central and South America remained unresolved for a long time, and anyone who wanted to malign the IMF simply had to mention the word "Argentina." Before the 2008 crash, the Fund had both an image and an identity problem. Many people asked whether the organization even served a purpose anymore.

As of late, DSK has been publicly thinking about making the social consequences and costs of reforms a part of the IMF's programs. This has already become a reality in the case of El Salvador. Under Strauss-Kahn, the IMF, which has always been criticized for pursuing a one-size-fits-all policy and ignoring the unique aspects of individual countries, is beginning to embrace the complexity of globalization. "Some have some fiscal and monetary room to maneuver, others don't. Every country is different, every situation is unique," says Strauss-Kahn.

Transforming the IMF

This is the IMF director's program: He wants to transform the organization, which used to structure its reform programs with a rigid view toward interest rates, taxes and currencies, into a task force that can offer advice, analysis and money to countries in trouble. The IMF wants to shed its image as the headquarters of hardcore neoliberalism.

Blanchard laughs, perhaps a little artificially, when he is asked about these plans. He says that they do not exist, and that the IMF develops as a result of its everyday activities. "What you're saying sounds almost like a conspiracy," he adds. He is standing on the 35th floor of the Radisson Plaza in Oslo, holding a plate of finger food in his hand. "Of course there is a new line," he says. "We want to be open, honest and skeptical."

When he speaks French and not, as is so often the case, English, he seems even more sincere than he already is. Blanchard is not adept in the use of political rhetoric, and of the clichéd sort of language the French call "langue de bois," or "wooden speech." He also doesn't shy away from addressing the Greek problem. A few days after the Oslo conference, an IMF team will leave for Athens to get a first-hand look at how the Greeks are managing their crisis. Greek Prime Minister Georgios Papandreou is also in Oslo. He looks older. He talks about Greek pessimism, which he says is "fundamental" for the crisis. What would happen if the IMF team returned from Athens to report that Greece is a lost cause?

Blanchard could say something superficial, but he addresses the question directly instead. "We certainly wouldn't simply release that information to the public," he says. "We would have to reconsider and negotiate with everyone involved to find a passable solution."

The Fund cannot afford a failure of the Greek bailout. Through Greece, it has gained a foot in the door of the First World, and if the IMF hopes to become the new world organization for economic policy, a thinking army to implement G-20 decisions, then now is the time. If Greece defaults, it could turn into another Argentina for the IMF.

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lakechamplainer 10/05/2010
1. Who elected Strauss-Kahn?
I found this to be a very informative article. Kudos to Klaus Brinkbaeumer and Ullrich Fichtner. I get the sense the that Strauss and the other IMFers were trying to be careful about what they said, but didn't realize how it would sound to an average person. For example, * Print * E-Mail * Feedback 10/04/2010 Money Is Power An Inside View of the IMF's Massive Global Influence By Klaus Brinkbäumer and Ullrich Fichtner Photo Gallery: 9 Photos Martin H. Simon / MHS Three years ago, the International Monetary Fund was irrelevant, an object of derision for all opponents of globalization. Under director Dominique Strauss-Kahn and as a result of the global economic crisis, the IMF has since become more influential -- governing like a global financial authority. It is also putting Europe under pressure to reform. The building that houses the headquarters of the global economy is a heavily guarded, 12-story beige structure in downtown Washington with a large glass atrium and water bubbling in fountains. The flags of the 187 member states are lined up in tight formation. Visitors walking into the office building find the cafeteria on the right, where many meetings are held. There, experts in their shirtsleeves, their jackets draped over the backs of chairs, drink lattes out of paper cups and talk countries into crises or upturns. A little farther down the hallway is the Terrace, the IMF building's upscale restaurant where the director receives official guests. On a Tuesday afternoon in late September, as the first leaves are falling from trees outside, the director, wearing a blue suit and a blue tie, is sitting on a blue couch high up in his office at the headquarters of the International Monetary Fund (IMF), outlining his idea of a new world. Some of it already exists, in the form of a new world order established in September 2008 to replace the one that was collapsing at the time. The result wasn't half bad -- but it is robust? 'The Money Is The Medicine' These are important times for humanity. The crisis has forced everyone to see many things from a new perspective. Now the IMF is preparing for its annual meeting on Oct. 8. Can it live up to expectations, and can it police the new global economic order and keep global banks in check? "You have to imagine the IMF as a doctor," says Dominique Strauss-Kahn, the 61-year-old director of the International Monetary Fund. "The money is the medicine. But the countries -- the patients -- have to change their habits if they want to recover. It doesn't work any other way." He smiles benevolently as he says these things, his eyes disappearing behind small cushions of wrinkled skin. Who elected him to anything? Who his he to say how human beings should order their societies? In Strauss-Kahn's view, the IMF should become an administrative unit of sorts for the G-20, an agency that "tries to find solutions for global and national problems," and comes up with plans and create values. "In the end we aim at much more than just the right financial and economic policies. The ultimate goal, of course, is world peace through economic stability." This is the way Strauss-Kahn views his organization, and the astonishing thing is that hardly anyone, with the exception of a lone professor in Boston, disagrees with him anymore. As an American, I don't recall a process being followed to give up sovereignty and assign it to the IMF, and to assign them control of a large chunk of my tax dollars. I certainly don't support it, and it is clearly against the US Constitution.
BTraven 10/07/2010
2.
Zitat von lakechamplainerI found this to be a very informative article. Kudos to Klaus Brinkbaeumer and Ullrich Fichtner. I get the sense the that Strauss and the other IMFers were trying to be careful about what they said, but didn't realize how it would sound to an average person. For example, * Print * E-Mail * Feedback 10/04/2010 Money Is Power An Inside View of the IMF's Massive Global Influence By Klaus Brinkbäumer and Ullrich Fichtner Photo Gallery: 9 Photos Martin H. Simon / MHS Three years ago, the International Monetary Fund was irrelevant, an object of derision for all opponents of globalization. Under director Dominique Strauss-Kahn and as a result of the global economic crisis, the IMF has since become more influential -- governing like a global financial authority. It is also putting Europe under pressure to reform. The building that houses the headquarters of the global economy is a heavily guarded, 12-story beige structure in downtown Washington with a large glass atrium and water bubbling in fountains. The flags of the 187 member states are lined up in tight formation. Visitors walking into the office building find the cafeteria on the right, where many meetings are held. There, experts in their shirtsleeves, their jackets draped over the backs of chairs, drink lattes out of paper cups and talk countries into crises or upturns. A little farther down the hallway is the Terrace, the IMF building's upscale restaurant where the director receives official guests. On a Tuesday afternoon in late September, as the first leaves are falling from trees outside, the director, wearing a blue suit and a blue tie, is sitting on a blue couch high up in his office at the headquarters of the International Monetary Fund (IMF), outlining his idea of a new world. Some of it already exists, in the form of a new world order established in September 2008 to replace the one that was collapsing at the time. The result wasn't half bad -- but it is robust? 'The Money Is The Medicine' These are important times for humanity. The crisis has forced everyone to see many things from a new perspective. Now the IMF is preparing for its annual meeting on Oct. 8. Can it live up to expectations, and can it police the new global economic order and keep global banks in check? "You have to imagine the IMF as a doctor," says Dominique Strauss-Kahn, the 61-year-old director of the International Monetary Fund. "The money is the medicine. But the countries -- the patients -- have to change their habits if they want to recover. It doesn't work any other way." He smiles benevolently as he says these things, his eyes disappearing behind small cushions of wrinkled skin. Who elected him to anything? Who his he to say how human beings should order their societies? In Strauss-Kahn's view, the IMF should become an administrative unit of sorts for the G-20, an agency that "tries to find solutions for global and national problems," and comes up with plans and create values. "In the end we aim at much more than just the right financial and economic policies. The ultimate goal, of course, is world peace through economic stability." This is the way Strauss-Kahn views his organization, and the astonishing thing is that hardly anyone, with the exception of a lone professor in Boston, disagrees with him anymore. As an American, I don't recall a process being followed to give up sovereignty and assign it to the IMF, and to assign them control of a large chunk of my tax dollars. I certainly don't support it, and it is clearly against the US Constitution.
Presumably the man who runs the IMF does not know that his organisation could became redundant given that most countries "helped out" by the IMF have learned its lesson, namely to stockpile as much money as possible. China does it, Brazil too, even Argentina piles lot of cash. From one extreme to another one.
esperonto 10/08/2010
3. a bee in the bonnet
Its plain to me that these old guys who want the New World Order have what is known as a "bee in their bonnets", meaning a little idea they hope to capitalize on, which is more grandiose in concept than in its true practice -- namely, that this New World Order will not pan out. It will fall apart, but perhaps before doing so, a few people will get rich, and that is all it is really about. Humanity will shirk off the stress the NWO is putting on them with all this military action, and they will relax back into normal humans and laugh at the diabolicalness of the western minds trying to push people over the edge.
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