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Sex, money, power: ask a Mexican?

18 May 2011

(Sorry, all — my keyboard is STILL possessed by demons, and is under some gringo voodoo curse that won’t let me type accent marks)

Since 1945, the International Monetary Fund has seen its role as “oversee[ing] the global financial system by following the macroeconomic policies of its member countries institutional lender”.  In other words, using money and power to satisfy the urges and desires of those with power and status in the world economy, even at the expense of the health, safety and dignity of those who are on the receiving end.  Sort of metaphorically what its managing director,  Dominque Strauss-Kahn, is now sitting in a New York City jail is accused of doing to a hotel maid, supposedly an immigrant from one of countries whose institutional lenders are “overseen” (or is it overpowered?) by the IMF.

Strauss-Kahn is only the latest in a string of IMF Managing Directors brought low by his own (mis)behavior on the low-down, the organizations board is having to find a new leader, one that it is hoped, might keep the organization out of the crime pages and in the financial pages of the international press.  In some ways, the IMF is like the Roman Catholic Church.  Not in having been beset with scandals involving sexual abuse, but in that it is largely a European institution of international scope, with the decision making directorate heavily weighted in favor of those who designed the mechanism for making the rules and chosing their leader.  The Church, to its credit, has been sort of evening out the College of Cardinals over the last several years, appointing more Americans, Africans and Asians to balance out the plethora of Italians who ran the Vatican for the last millenia, while voting rights in the IMF executive board are weighted based on the economic value of the board member’s country in the exisiting neo-liberal system.

And, like with the election of the Pope, when selecting a Managing Director,  those who are openly seen by the public at large as lobbying for the top job are often rejected by those who actually make the decision in their own conclave.

But, the IMF has to share its pretentions of controlling the economic way and the truth with the Word Bank.  Keeping the world powers happy, the head of the World Bank is usually from the United States, and the IMF from Europe.

The media wisdom is that the next IMF managing director will be another European, although there is speculation that the IMF board will look for an “outsider” — by birth, not by adherence to orthodoxy that is.

Geman Chancellor Angela Merkel has been “demanding” that the IMF executive remain in European hands, basically to defend the Euro, but — as Thorsten Benner argues in Der Spiegel

A tight grip on the top IMF post weakens Europe because it damages Europe’s credibility at a time of significant and rapid global power shifts. And without credibility, Europe will find it more difficult to encourage rising powers to play a constructive role in international institutions. Newcomers to the power stage have in the past hidden behind the argument that they have not been allowed to wield influence — an argument that allowed them to cover up a lack of political will or courage to face tough international issues. That argument would evaporate if Europe were to relinquish its privileges.

Benner also writes:

The excuse for the tight European grasp on the top IMF slot is the ongoing euro crisis. But while Merkel may not immediately grasp the paradox of this argument, countries like Mexico and Brazil certainly do. During the Latin American and Asian financial crises, Europeans certainly didn’t make the case that the IMF should be led by someone from the affected regions.

Although Benner, like so many, when thinking of medium sized economic powers,  focus on the historically expansionist minded Brazil (which spent the first century of independence mostly trying to grab chunks of its neihbor’s territories) as opposed to Mexico (which spent its first century fending off territorial chunk-grabbers), no Brazilians in particular have surfaced as possible IMF managing directors-  Two Mexicans have.

The talk about former president Ernesto Zedillo — who basically oversaw the legitimization of the neo-liberal social and political changes (and economic disasters) imposed by the IMF on Mexico — is mostly in the Mexican press (and seems based on speculation by some Harvard professor)  and University of Chicago educated former IMF Executive Director Augustin Carstens Carstens.

Carstens, who after his IMF stint served as Treasury Secretary in the Calderon administration won plaudits for, of all things, borrowing wazoos of money from the IMF — 72 billion dollars to be exact.  It was, of course, due in large part to the fact that Mexicans don’t follow the U.S. and European financial ideas on a personal level (people buy a house to live in… with cash… not as a speculative investment, nor do they use credit cards all that much and people are only dragged into the banks kicking and screaming), and because the very anti-neo-liberal ides of putting in strict banking regulations still made sense during the last banking crisis (under Zedillo’s administration) that Mexico has a relatively healthy economic situation (as far as the IMF is concerned, never mind how individual Mexicans were doing) while Euopeans and those in the U.S. were facing economic melt-down (on a personal and institutional level).

Bottom line — Mexico didn’t need the credit, but by upping their credit limit, they cushioned the rich countries economies, and put off the eventual day of reconing with the inevitable clash between limited resources and unlimited money.  Which makes Carstens a big man in the international financial system.

Of course, he’d be a big man anywhere.  There’s no way around it.  He’s fat.  He’s really, really, really fat.

Um, three guesses which one is Carstens

The guy looks like the Michelin Man.  Which, given that Michelin is a French company, might at least give some satisfaction to those who want to keep a European (and French) face at the top of the heap.  More importantly, can you see anybody having sex with the guy?  I suppose — given the temption (that I gave into at the beginning of this post) to make atrocious metaphors out of the sexual predation of previous IMF managing directors and the wretched of the earth, we could say he’s capable of crushing any resistance by African maids… but really… the maids of the world’s luxury hotels at least have a fair chance to outrun the guy, as he looks for his… uh, I guess that’s enough out of me.

5 Comments leave one →
  1. anonymous permalink
    18 May 2011 1:56 pm

    not sure if you know this, but his wife is a reader of and sometimes commentator on English-language Mexico blogs…

    Also you cant really discuss the FCL without talking about its impact on the peso.

  2. 19 May 2011 10:55 am

    Nice Post! Great Information! (I like the “Michelin Man” line!)

  3. 19 May 2011 4:53 pm

    NPR today discussed the possibility of the “emerging market” candidate. Carstens was mentioned, but not Zedillo. If a Mexican candidate was genuinely considered, would not the question of whether or not such a candidate is tied to drug trafficking preclude him? Europe and the United States fail to admit responsibility for their central role of drug trafficking , but nonetheless the issue of corruption’s centrality within Mexican institutions has to negatively influence a Mexican candidate, doesn’t it?

  4. mcm permalink
    30 May 2011 2:20 pm

    Sigh. Good post, except for the last two paragraphs…perhaps you are one of the few, the lucky who have no physical characteristics to mock.
    On another note — before you take off on sabbatical, how about a summary of the issues concerning the current teacher’s strike in Oaxaca? Please.

    • 30 May 2011 4:27 pm

      It is unfair, but I think his appearance will work against him, especially with the other “front runner”, Mme. Lagarde being a former Olympic athlete, and, although a few years older than Carstens, giving the appearance health and vitality. I was being snarky, that is true, but these things do factor into political and economic decisions more than we like to think.

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