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Not Carstens, and probably just as well

30 June 2011

In the end, Mexican Agustin Carstens did not get the support required to overturn the traditional and unchanging rule that has survived for six decades which virtually guarantees a European monopoly on the management of the IMF.

[Christine] Lagarde, 55, will thus become the first woman to head the IMF after the untimely departure of Strauss Kahn, who still must overcome a painful legal scandal.


I was surprised that SDPNoticias — a decidedly leftist, anti-Calderónist publication — was disappointed in Agustín Carsten’s failure to clinch the top job at the International Monetary Fund, but then, in any contest that comes down to something involving the French, everyone in Mexico is going to go for the Mexican.  Even if it isn’t necessarily in our best interests.

Should Mexicans be disappointed that Agustín Carstens is not moving to the IMF?  Perhaps not.  Carstens is given much of the credit for Mexico’s stable economy, leading to some concern that his campaign for the IMF Managing Director’s slot was a distraction that could impact the Mexican economy.  Seen as something of the “indispensable man” of Mexican monetary policy may have worked against his candidacy — one gets the sense that the Calderón Administration, on the defensive in nearly every policy decision, felt it could not afford to lose a key domestic ally, even if that ally was moving into an international post that greatly impacts Mexico.

Whether Carsten’s and the administration’s economic policies are the right ones for the Mexican people is a political and economic proposition that is doubted by some.  Not being in debt as a nation, doesn’t mean individual citizens and their families are doing ok.  Food and fuel prices keep going up and salaries aren’t.  It’s especially notable in a place like the one where I live, where too much of the economy depends on a cyclical (and fickle) industry like tourism and not on a stable one (like… oh… narcotics exports?).

Whether or not the foreign investments coming into Mexico (which seem to be going into things like tourism and mining and buying up Mexican assets) can be replicated in other countries isn’t a given, and Carsten’s successes here might not be applicable to other places.

And, let’s not forget.  Carstens is one of the “Chicago Boys”… while less doctrinaire than many, he is a University of Chicago trained economist.  While it would be unfair to assume that one is brain-washed by one’s academic background (Fidel Castro was educated by Jesuits, but somehow got over it), the “libertarian” and macro-economic theories associated with that institution have fallen into ill-repute even among lenders.

More seems to being made of the novelty of Christine Lagarde as the first female managing director of the International Monetary Fund, or of disappointment that the post, as usual, has gone to another European, rather than what is probably much more  important, her background.

It didn’t seem to make a huge difference that Strauss-Kahn was a Socialist (and a former Communist) as far as IMF policies were concerned.  He was another economist, and Ms. Lagard is a Gaulist (ideologically not all that different from Carsten’s PANismo), but she is not an economist,  but an attorney specializing in labor and anti-trust issues.   It seems that even “true believers” are starting to realize that economic health is a matter of more than money supplies and debt ratios, but depends on more intangible factors like social heath and a personal sense of well-being among producers and consumers.

And bankers.  I was criticized for mentioning Carsten’s physical appearance, but I think it is a factor.  It’s not unusual for even small companies to take out very large insurance policies on their key personnel.  I would hate to think of the premiums on any policy written on the IMF’s Managing Director, but image that they are a lot lower when the Managing Director is a former Olympic athlete of abstentious personal habits.

And, as an added bonus, for those Mexican lefties who out of national pride would have preferred Carstens, maybe with another European (and with European economic issues likely to occupy the IMF’s agenda for the next few years), Mexicans can somewhat extricate itself from a concern for how it’s policies play on the world stage, and go back to focusing on the internal markets and the well-being of the ordinary Mexican, not the bankers and foreign investors.


2 Comments leave one →
  1. Juanita Cortez permalink
    30 June 2011 10:18 pm

    This what one man said about “indispensable” men.

    “Si un hombre fuese necesario para sostener el Estado, ese Estado no debería existir; y al fin no existiría”. Simón Bolivar

  2. 1 July 2011 12:20 am

    Thanks, Juanita… I was thinking more of Charles DeGaulle’s observation that “the world’s cemeteries are full of indispensable men”, but Bolivar was, as usual, right on target.

    (And, I have a use for that quote).

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