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Granted, I don't know enough about the track record of the IMF. Them sort of being the 'Emergency Room' staff for failed nations does give them insights into ty

Granted, I don't know enough about the track record of the IMF. Them sort of being the 'Emergency Room' staff for failed nations does give them insights into typical reasons for malfunction. I don't really have a grip (and most people don't) on how these huge sums here in the U.S., e.g. 4-5 trillion dollars estimated in bad assets on the books, add up. Reading Krugman/ de Long/ Cowen/ Kedrovsky etc. still hasn't given me enough perspective. So I'd like to see some input from people that know all the angles on how crooks get away with money! Their experience from developing nations is helpful.

anamax 18y ago
> Them sort of being the 'Emergency Room' staff for failed nations does give them insights into typical reasons for malfunction. Which doesn't help, and may hurt, because we're not failing for "typical reasons". > So I'd like to see some input from people that know all the angles on how crooks get away with money! Their experience from developing nations is helpful. If that's your reason for thinking that the IMF will help, it's almost certainly wrong. Think of it this way. Does skill at catching shoplifters help if you're trying to stop murderers? Note that the bulk of the IMF's activities are "development", which often ends up bankrupting the country.... That's not to say that such countries wouldn't have failed anyway or that contries don't fail without IMF help, just that IMF involvement doesn't necessarily end up with ponies and kittens. Don't take my criticism of the IMF as support for the current batch of US folks - it isn't. (Pretty much every one of Fed Chairman Bernake's predictions has been horrifically wrong.) I'm just pointing out that it's quite possible for the IMF to be even worse. Remember, that it's always possible to make things worse. (Better and worse are both changes.)
- christofd 18y ago
  Well, I was hoping for a fresh outside perspective. We here in the U.S. have been shafted for so long that we've got 'Stockholm Syndrome'. It's time for some wrath - nothing better than an institution that deals with 3rd world dictators to call out breaches of law. You could call it 'ethical awareness' that an outside perspective can contribute. Granted, given actual policy, the U.S. situation is unique and therefore the IMF's experience might not directly apply, e.g. I don't think that too many developing nations failed because of 'credit default swaps'. However, many bankers currently (and in the past) are in policy positions, and suddenly the lessons from corruption and aggregation of power in 3rd world countries apply.
  - anamax 18y ago
    > It's time for some wrath - nothing better than an institution that deals with 3rd world dictators to call out breaches of law. The IMF doesn't "deal with" 3rd world dictators or "call out breaches of law". > You could call it 'ethical awareness' that an outside perspective can contribute. And you could call it a pony for all the good it would do. "Outside" doesn't tell you anything about the value of a perspective. > However, many bankers currently (and in the past) are in policy positions, and suddenly the lessons from corruption and aggregation of power in 3rd world countries apply. If you're arguing that "IMF bankers will fix things", you're ignoring the fact that IMF bankers are what got us into this and we're currently using IMF bankers. (Guess where the current treasury secretary used to work.) If you're arguing that the IMF is used to dealing with corrupt bankers, you're simply wrong. And, if you're arguing that the US has problems because of corrupt bankers, you don't know anything useful about said problems. > Well, I was hoping for a fresh outside perspective. Hope is not a plan. Change is not necessary good. And an outside perspective isn't necessarily relevant. (Different can be good or bad.) And, it's not "fresh". > We here in the U.S. have been shafted for so long that we've got 'Stockholm Syndrome'. One of the symptoms is grasping at anything, without regard for whether it actually helps or is even relevant. So, to end on a positive note, it's likely that you've accurately explained why you're thrashing around uselessly.
    - christofd 18y ago
      Excuse me please, Sir. This is just language mumbo-jumbo you're playing here... slicing and dicing things that can be interpreted in any fashion you want to. My points are perfectly valid: that aggregation of power in the U.S. financial system has led to hazards and that a comparison to developing nations can lead to insights on power abuse. The next time you slice and dice me like this I'll call it out for what it is: trolling. You can't just take apart sentences and push them back slanted with any angle you want to spin on them. Further, the decisiveness in which you answer, e.g. "you could call it pony", 5 x "you're wrong", "uselessly", "hope is not a plan" is inappropriate. You are not on solid ground yet your language suggests so. I have been to graduate school in economics at one of the best schools in the world. My friendly language in which I try to accommodate other views is not an invitation to ignite fickle territorial battles. Geez, this is getting narrow-minded.
- joe_the_user 18y ago
  Anamax, your point about the IMF failing developing nations is very good. There is really no evidence that IMF has ever helped anyone. I am less sure about your point that the US not failing for typical reasons. The finance industry has influence policy to excessive degree over the last ten years and the resulting deregulation played a part in the bubble and the collapse. It is hardly the only factor but it was a factor. It's different from Third World cronyism but the article has a point that it might be considered just a variation on theme. So I'd challenge the statement that the US did not fail in a typical fashion. The thing that's A-typical is the US wasn't just rolling out wasteful production and unjustified debt but that it has been driving the world's economy over the last twenty years while doing this. I'd agree that IMF doesn't have any track record of helping countries - it's just a bureaucracy which has more or less required belt tightening thus forcing countries to become export oriented. The ironic thing is that as many nations have belt-tightened and become export oriented over the last twenty years, they came to rely on the debt-rolling US to buy their products. So the final failure of the US bubble may result in world where no one drives demand, where "beggar thy neighbor" through competative devalue is the only tool left to the exporting nations which every nation will be forced to be. Neither the IMF nor the free market would be able to get us out of that one.
  - anamax 18y ago
    > resulting deregulation played a part in the bubble and the collapse. One small problem - deregulation didn't play a part in the collapse. It's the regulated institutions and the regulated parts of mixed organizations that failed. Subprime mortages were a creation of regulation and were overvalued as US regulatory policy. Regulation and tax policy encouraged US banks to hold more Fannie and Freddie stock than they would have otherwise, which guaranteed that they'd all take a hit at the same time. The only "lack of regulation" was the US Congress protecting Fannie and Freddie. The active players here were almost all Dems. Most Repubs ignored the problem and a few got their teeth kicked in when they suggested that Fannie and Freddie should be regulated. The Obama adminstration, starting with his Chief of staff, is full of folks who used to be Fannie or Freddie execs or board members. That's not to let foreign regulators off the hook. Their banks and insurance companies are also failing. In many cases, such as AIG, both US and foreign regulators were involved. That's why the US is trying to get the unregulated institutions to bail out the regulated ones - they're the only ones left with significant assets. Yes, I know what Fed Chief Bernake said about AIG's London operations. He was wrong about that, which shouldn't be much of a surprise given the accuracy of his predictions.

anamax 18y ago

> Them sort of being the 'Emergency Room' staff for failed nations does give them insights into typical reasons for malfunction. Which doesn't help, and may hurt, because we're not failing for "typical reasons". > So I'd like to see some input from people that know all the angles on how crooks get away with money! Their experience from developing nations is helpful. If that's your reason for thinking that the IMF will help, it's almost certainly wrong. Think of it this way. Does skill at catching shoplifters help if you're trying to stop murderers? Note that the bulk of the IMF's activities are "development", which often ends up bankrupting the country.... That's not to say that such countries wouldn't have failed anyway or that contries don't fail without IMF help, just that IMF involvement doesn't necessarily end up with ponies and kittens. Don't take my criticism of the IMF as support for the current batch of US folks - it isn't. (Pretty much every one of Fed Chairman Bernake's predictions has been horrifically wrong.) I'm just pointing out that it's quite possible for the IMF to be even worse. Remember, that it's always possible to make things worse. (Better and worse are both changes.)

christofd 18y ago
Well, I was hoping for a fresh outside perspective. We here in the U.S. have been shafted for so long that we've got 'Stockholm Syndrome'. It's time for some wrath - nothing better than an institution that deals with 3rd world dictators to call out breaches of law. You could call it 'ethical awareness' that an outside perspective can contribute. Granted, given actual policy, the U.S. situation is unique and therefore the IMF's experience might not directly apply, e.g. I don't think that too many developing nations failed because of 'credit default swaps'. However, many bankers currently (and in the past) are in policy positions, and suddenly the lessons from corruption and aggregation of power in 3rd world countries apply.
- anamax 18y ago
  > It's time for some wrath - nothing better than an institution that deals with 3rd world dictators to call out breaches of law. The IMF doesn't "deal with" 3rd world dictators or "call out breaches of law". > You could call it 'ethical awareness' that an outside perspective can contribute. And you could call it a pony for all the good it would do. "Outside" doesn't tell you anything about the value of a perspective. > However, many bankers currently (and in the past) are in policy positions, and suddenly the lessons from corruption and aggregation of power in 3rd world countries apply. If you're arguing that "IMF bankers will fix things", you're ignoring the fact that IMF bankers are what got us into this and we're currently using IMF bankers. (Guess where the current treasury secretary used to work.) If you're arguing that the IMF is used to dealing with corrupt bankers, you're simply wrong. And, if you're arguing that the US has problems because of corrupt bankers, you don't know anything useful about said problems. > Well, I was hoping for a fresh outside perspective. Hope is not a plan. Change is not necessary good. And an outside perspective isn't necessarily relevant. (Different can be good or bad.) And, it's not "fresh". > We here in the U.S. have been shafted for so long that we've got 'Stockholm Syndrome'. One of the symptoms is grasping at anything, without regard for whether it actually helps or is even relevant. So, to end on a positive note, it's likely that you've accurately explained why you're thrashing around uselessly.
  - christofd 18y ago
    Excuse me please, Sir. This is just language mumbo-jumbo you're playing here... slicing and dicing things that can be interpreted in any fashion you want to. My points are perfectly valid: that aggregation of power in the U.S. financial system has led to hazards and that a comparison to developing nations can lead to insights on power abuse. The next time you slice and dice me like this I'll call it out for what it is: trolling. You can't just take apart sentences and push them back slanted with any angle you want to spin on them. Further, the decisiveness in which you answer, e.g. "you could call it pony", 5 x "you're wrong", "uselessly", "hope is not a plan" is inappropriate. You are not on solid ground yet your language suggests so. I have been to graduate school in economics at one of the best schools in the world. My friendly language in which I try to accommodate other views is not an invitation to ignite fickle territorial battles. Geez, this is getting narrow-minded.
joe_the_user 18y ago
Anamax, your point about the IMF failing developing nations is very good. There is really no evidence that IMF has ever helped anyone. I am less sure about your point that the US not failing for typical reasons. The finance industry has influence policy to excessive degree over the last ten years and the resulting deregulation played a part in the bubble and the collapse. It is hardly the only factor but it was a factor. It's different from Third World cronyism but the article has a point that it might be considered just a variation on theme. So I'd challenge the statement that the US did not fail in a typical fashion. The thing that's A-typical is the US wasn't just rolling out wasteful production and unjustified debt but that it has been driving the world's economy over the last twenty years while doing this. I'd agree that IMF doesn't have any track record of helping countries - it's just a bureaucracy which has more or less required belt tightening thus forcing countries to become export oriented. The ironic thing is that as many nations have belt-tightened and become export oriented over the last twenty years, they came to rely on the debt-rolling US to buy their products. So the final failure of the US bubble may result in world where no one drives demand, where "beggar thy neighbor" through competative devalue is the only tool left to the exporting nations which every nation will be forced to be. Neither the IMF nor the free market would be able to get us out of that one.
- anamax 18y ago
  > resulting deregulation played a part in the bubble and the collapse. One small problem - deregulation didn't play a part in the collapse. It's the regulated institutions and the regulated parts of mixed organizations that failed. Subprime mortages were a creation of regulation and were overvalued as US regulatory policy. Regulation and tax policy encouraged US banks to hold more Fannie and Freddie stock than they would have otherwise, which guaranteed that they'd all take a hit at the same time. The only "lack of regulation" was the US Congress protecting Fannie and Freddie. The active players here were almost all Dems. Most Repubs ignored the problem and a few got their teeth kicked in when they suggested that Fannie and Freddie should be regulated. The Obama adminstration, starting with his Chief of staff, is full of folks who used to be Fannie or Freddie execs or board members. That's not to let foreign regulators off the hook. Their banks and insurance companies are also failing. In many cases, such as AIG, both US and foreign regulators were involved. That's why the US is trying to get the unregulated institutions to bail out the regulated ones - they're the only ones left with significant assets. Yes, I know what Fed Chief Bernake said about AIG's London operations. He was wrong about that, which shouldn't be much of a surprise given the accuracy of his predictions.