Meanwhile, IMF deputy director John Lipsky will run the IMF. Lipsky is formerly of the US Treasury and of JP Morgan. No doubt more predictable, especially after viewing the lesson provided to DSK.
Let me make clear, I do not condone rape. This case interests me simply because it was handled so differently from the usual case of diplomats gone wrong, such as in a vehicular homicide, or the aforementioned incident in Pakistan. Who denied Strauss-Kahn the niceties that normally accompany his position, and why? That is the interesting question here, and media have failed to ask it.
The April 11, 2011 Washington Post had an interesting piece about new directions at the IMF, led by DSK. One has to wonder if this helped lead to the crisis in which DSK now finds himself, entirely stripped of dignity, being tortured (a la Bradley Manning, who was put on suicide watch as a way to enhance his psychological torture–with clothes and personal items removed, lights on 24/7) and pilloried around the world. Read the following and see the threat he posed to the banks that now own and run our little planet.
Since the Wall Street bank Lehman Brothers failed more than two years ago, bringing the global economy to the brink of collapse, countries have spent hundreds of billions of dollars to prop up their markets, intensified regulation of financial companies and deepened government involvement in the economy.
For International Monetary Fund managing director Dominique Strauss-Kahn, the job is only half done, as he has been leading the fund through a fundamental rethinking of its economic theory. In recent remarks, he has provided a broad summary of the conclusions: State regulation of markets needs to be more extensive; global policies need to create a more even distribution of income; central banks need to do more to prevent lending and asset prices from expanding too fast.
“The pendulum will swing from the market to the state,” Strauss-Kahn said in an address at George Washington University last week. “Globalization has delivered a lot . . . but it also has a dark side, a large and growing chasm between the rich and the poor. Clearly we need a new form of globalization” to prevent the “invisible hand” of loosely regulated markets from becoming “an invisible fist.”
The effort to recast global economics will be a focus of IMF meetings this week…
The growing income gap between the rich and poor is no longer seen by many inside the IMF as a by-product of economic boom times but a cause of crisis, as poor and middle-income families turn to borrowed money to make up for stagnant incomes.
Strauss-Kahn continues to push for major new financial sector taxes, although that issue has never gained broad support. He has been frustrated as well in advocating an international program to ensure that the most globally connected financial firms can be put out of business if needed without costing taxpayers. That would require a deeper level of cooperation among nations than exists…
The IMF has also revised its long-standing opposition to “capital controls“ and researching ways that nations could control risky behavior by financial firms.
Strauss-Kahn — who is in the fourth year of a five-year term at the IMF and is being mentioned as a possible Socialist Party candidate in upcoming French presidential elections — said any suggestion that the fund is pushing for too much government is off the mark. The financial crisis is evidence, he said.
“There is a long way to go before all that has been badly done by the lack of supervision of the market will be overcome,” he said. “The whole public sphere has to do more.”