French Finance Minister Christine Lagarde (L) talks with International Monetary Fund’s Managing Director Dominique Strauss-Kahn (R) prior to BBC’s Nik Gowing hosting a live “Special World Debate” at the Istanbul Congress Center.
The life of Dominique Strauss-Kahn (DSK) continues to fall apart with the announcement by his wife of many years, Anne Sinclair, that she intends to divorce him. One can’t help but wonder what happened to this once wealthy, powerful, and charismatic man who apparently had everything and lost it all in one night. His career is evidently over due to an alleged attack on a hotel maid. One day he was at the top of the financial world and a few hours later he was in a New York City jail and will be lucky to avoid time in Attica.
Some people think DSK’s fall from his pinnacle of power may have been assisted by those who might benefit from his removal, and from the example that so great a fall would set for others. He did at least seem to try to soften the IMF demands from poor debtor nations.
For example, he allowed Haiti to escape from the IMF’s clutches when the organization tried to intimidate the Haitians into accepting IMF loans after the recent earthquake that destroyed that country. The IMF, under activist pressure, eventfully forgave Haiti’s existing debt to the organization. Coincidentally, his troubles also come at a time when the IMF is under tremendous pressure concerning loans it has made to the European nations now on the verge of debt default.
If DSK was set up, what delicious irony to use someone from the same social strata, i.e. a hotel maid from West Africa, that the IMF has victimized for decades. Quite a sense of humor those bankers have.
In any event, the search for his successor continues, and the lesser developed nations seem to think that the time has come to undo the “gentlemen’s agreement” that the IMF head would always be European, which was made at the organization’s founding by the United States and Europe.
The question becomes, should the nations who fund the IMF in large part select its head, or should the nations who receive its funding select its head?
Two candidates have emerged from a crowded pack. From the non-European group there is Tharman Shanmugaratnam, the finance minister of Singapore, who has degrees from the right places, including London School of Economics, Cambridge, and Harvard.
The leading European candidate is Christine Lagarde, the finance minister of France, a position once held by DSK. She has openly announced her candidacy for the job and she is widely expected to get it since she has the backing of Europe, The United States, and China. She would be the first woman to hold the position. Word of warning to Ms. Lagarde: watch your back, no matter how connected you are.
Why would the United States want to remain a member of an organization as corrupt as the IMF? Why would American politicians want to be a part of an organization run by such sleazy people unless they are just as corrupt and sleazy? This would be such a good time for Congress to make a statement and stand on principle.
Here’s hoping they will but predicting they won’t.