Joseph Stiglitz: the IMF cannot afford to make a mistake with Strauss-Kahn's successor

The IMF will soon be confronted with the difficult decision of choosing a new head. If these were ordinary times, it might be of little moment. But these are not ordinary times.

By Joseph E. Stiglitz
8:00PM BST 21 May 2011

Europe faces a financial crisis and good leadership of the IMF will be essential to finding its way out. As the world focuses its attention on the allegations against Dominique Strauss-Kahn and we think about who might replace him, it is important not to lose sight of the IMF's crucial role.

Europe has decided it cannot or will not manage the crisis on its own and has turned to the IMF. But Europe is in an awkward position. Its own Central Bank is at the centre of managing the very crisis that was helped into being by the flawed economic philosophy and policy to which it and the US Federal Reserve adhered.

Those who thought that all that was needed for the euro to succeed was fiscal discipline should have learned their lesson – Ireland and Spain had surpluses before the crisis.

Behind the scenes there is a battle – between those who put the interests of the banks first and those who put the interests of the people first. Debt restructuring would affect the balance sheet of the banks. The longer restructuring is postponed, the more debt moves onto the books of the public, the more the banks are protected.

in full: http://www.telegraph.co.uk/finance/dominique-strauss-kahn/8527773/Joseph-Stiglitz-the-IMF-cannot-afford-to-make-a-mistake-with-Strauss-Kahns-successor.html

The sooner this bankster gang in humanitarian clothing is revealed and slain, the better.

Or would you rely on governments to lend to other countries with no strings attached?

You can hardly call it 'replacing it' if the entire system of governance - who decides what policies are behind the decisions - is replaced with one both democratic and progressive (i.e. is not allowed, by the construction of the institution, to act with corporations against populations).

In order to leave it to a free market, we have to create a world government strong enough to control the largest economic players and enforce a free market, much as it requires a powerful government to enforce the principle of freedom of religion against the strongest religions. We don't HAVE a free market, we have capitalism.

I can hardly imagine a government lending with no strings attached, although people do it so I can't rule it out, but I can certainly imagine governments making better lending decisions than the international financial community does. The whole POINT of the discussion is that the international financial community often makes horrendously inappropriate decisions, and governments are ALREADY doing better. The apparent way to fix it is to take the decision-making power away from the bankers.

The only people I could see doing a worse job than the bankers are clueless dweebs like the Tea Party, with no sense and no conscience, being controlled by the bankers. But lots of people could do better.

If by 'replace it' you mean an international body, then sure, why not? It's the direction they're going that's the problem, not the fact that they have transportation, so to speak.

Any bets on who wins?