Sunday, May 22, 2011

The IMF Rape

No.  Not the charges against Dominique Strauss-Kahn for sexual assault in New York, about which you have heard on the news this weekend.

Rather, the International Monetary Fund Rape is the conversion of the IMF from an advocate of the Washington Consensus -- a largely conservative set of recommendations tempered with a bit of welfare state seasoning for financially troubled emerging economies to restore themselves -- to an advocate of Socialist/Keynesian spend-to-win policies.

The recommendations of the Washington Consensus called for unilateral liberalization of trade on the part of the troubled county in exchange for loans to cover its debt, and were reasonably successful at increasing trade with, and improving the productivity of countries that accepted them.

Of course, the IMF rape victims include most citizens of those states that accept the IMF's new collectivist recommendations, whose economies revert to stagnation.