Isn’t the West a model? IMF-nesia…

10 Oct

It is ironic that the very institutions that promoted neoliberalism will backtrack once their ideology turn their backs on them. As the world faces an imminent financial meltdown, the IMF issues a press statement urging ‘forceful and cooperative action’. It cited, (I almost choked on this one) that one of the causes of this crisis was the ‘regulatory, supervisory failures in advanced economies’.

Hasn’t the IMF always held up the West as the model for financial growth, especially during the Asian 1997 financial crisis? Remember how Asian countries were criticised as being ‘not transparent or accountable’ enough? As late as January this year, European leaders had already warned their financial institutions to practise ‘self-regulation’ or else they will have to do something. The warnings were made but they fell on deaf ears. As the crisis is about to hit the roof, the EU and US government have decided to bail the banks out or to put it attractively, re-capitalise the industry. Nothing is mentioned of how these financial CEOs will be dealt with for having caused the crisis. No word is mentioned on how financial speculation which leads to aggravating global food and fuel prices will be curtailed.

No wonder Noami Klein noted wryly that free market ideology is far from over. As she relates:

‘When those bubbles burst, the ideology becomes a hindrance, and it goes dormant while big government rides to the rescue. But rest assured: the ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize what is left of the public sector. We will also be told that our hopes for a green future are, sadly, too costly’

Will this financial crisis signal the coming of a new level of seismic global shock that will promote more sinister free market ideologies and initiatives which the journalist has predicted? I hope she is wrong though the major decisions and statements made by financial institutions such as the IMF and world leaders and the bailouts only seems to confirm my worst nightmares. The motto seems to be this: Let’s save the financial institutions and system using taxpayers money and forget how it has failed us even though we knew way before hand this was going to happen.

As she urges, and rightly,’ None of this, however, will happen without huge public pressure placed on politicians in this key period. And not polite lobbying but a return to the streets and the kind of direct action that ushered in the New Deal in the 1930s. Without it, there will be superficial changes and a return, as quickly as possible, to business as usual’.


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