Comments on: The G20, The IMF, And Legitimacy

By: Uncle Billy vs. Mont Pelerin

Uncle Billy vs. Mont Pelerin — Wed, 30 Sep 2009 14:07:21 +0000

The very reason why I proposed a “G6,800,000,000″ this morning.

By: Dan Palanza

Dan Palanza — Wed, 30 Sep 2009 12:13:47 +0000

I too find economists disturbing because they create for me an impression of an education that has a near complete ignorance of how a culture works.

By: Africana

Africana — Wed, 30 Sep 2009 12:06:49 +0000

You say that a new global financial body should be organised “probably with some weighting according to their economic and financial importance in the world”.

How would such “importance” be calculated? If the weighting is according to the size of economies, would the big economies not have the preponderant vote still? It seems to me that what you propose would only entrench the current system, while inviting a few more “new biggies” to the table.

I have personal experience of the depredations visited upon us by the international financial institutions admittedly with the complicity of our ruling classes. I don’t trust the IMF. Its policies (structural adjustment in particular) kill people.

Why propose a weighted voting system? Is that what obtains in the countries (such as yours, the UK)that we are currently pleased to call established democracies? What happened to the one person one vote principle? Or is democracy only good for some?

I find economists a particularly disappointing bunch.

By: Ted K

Ted K — Wed, 30 Sep 2009 05:33:16 +0000

You mean in a period when the world economy is going through very difficult times, China maybe should spend that HUGE amount of reserves they’re sitting on?? Maybe spend it inside their own economy so their people could eat something more than a bowl of greasy noodles and formaldehyde flavored beer??? Maybe the Chinese government would go wild and they’d have enough to spend for a reconstituded pork tube for dessert. Madness!!! I tell you it’s madness!!!

No, I think it’s much better that Chinese officials have expensive dinner banquets while college graduates migrate away from their families to Guangdong province looking for work. It’s good to see young people wandering around for jobs away from home. Makes the country seem more active.

Where do you get these wild ideas Simon?!?!?!

By: Dan Palanza

Dan Palanza — Wed, 30 Sep 2009 00:55:32 +0000

Creating an EMF is the best idea I have read on this blog in the few months that I have been following the discourse.

While we are in the “create competition for the monopolies” mood, why not consider restoring the countywide commercial national banking system that was in place 1980, before the madness of centralized banks took hold and took the nation for its jewels.

By: anti_fascist_freedom_fighter

anti_fascist_freedom_fighter — Wed, 30 Sep 2009 00:37:26 +0000

This is the tyranny of the elites. Why should anyone accept their “rule” when they’ve proven themselves so completely inept, with pollution, with finances, overpopulation, with wasting the planets natural resources… other than pilfering all the planet’s money for themselves, there is not one thing they are good at… oh, I correct that… they are really really good at building huge homes in the Hamptons, and at keeping 5 star restaurants in the black. We’re back to needing a magna carta. Isn’t this why god invented pitchforks? The French had the right idea…

By: Uncle Billy vs. Mont Pelerin

Uncle Billy vs. Mont Pelerin — Tue, 29 Sep 2009 23:46:51 +0000

Wonder what the least corrupt, most egalitarian country is, in the world. Not according to the published lists, but for real.

By: Yakkis

Yakkis — Tue, 29 Sep 2009 23:19:32 +0000

Also, I might add the the IMF does a wonderful job of enriching the elites in the other 180 countries at the expense of their countrymen. There is no incentive for them to turn over a new leaf and help their own countries for a change.

By: Yakkis

Yakkis — Tue, 29 Sep 2009 23:11:38 +0000

The whole point of the IMF is to make sure the 20 countries with 75% of global economic output keep their share of the wealth.
If this EMF got off the ground, who knows what other ways the G20 would come up with to make sure their share of world economic output increased.

By: Uncle Billy vs. Mont Pelerin

Uncle Billy vs. Mont Pelerin — Tue, 29 Sep 2009 23:03:47 +0000

Why is Spain especially influential?

Would you include the US in a group of emerging market members? (Or even just recognizing it’s great potential as a future emerging market?)

By: purple

purple — Tue, 29 Sep 2009 21:13:43 +0000

And in what currency would capital be lent in this EMF ???

If the only legitimate reserve currencies are the Dollar and Euro, a few key countries (and people) will continue to dominate world finance.

No ‘Asian Century’ without an Asian currency.

By: eric faulkner

eric faulkner — Tue, 29 Sep 2009 20:20:54 +0000

Seems to me we have a meld of the company store and musical chair economy. Any help?

By: apachecadillac

apachecadillac — Tue, 29 Sep 2009 18:49:56 +0000

Has not China already begun its own non-’rules based’ process of entering into a series of bilateral currency support arrangements, agreements to settle trade in the trading partners’ currencies rather than dollars, and so on?

While the advantages to small and vulnerable countries of having a ‘reliable’ source of emergency support on tap are indisputable, I suspect an interim stage in which they must shop for help from those with non-economic geopolitical motives for preferential treatment (in Eastern Europe, the IMF, in Asia, the Chinese, in Africa and Latin America, the ???) is inevitable.

It may be grubby, nasty and unpredictable, but it will be the world of the future.

By: John

John — Tue, 29 Sep 2009 18:05:05 +0000

Since the US, Europe, and Japan are the largest shareholders of the IMF they have the greatest voting quotas. The only way for the South and Emerging markets to have a fair voice is to set up their own fund.

Maybe the new fund could stress infant industry protection and support Keynesian stimulus during recession instead of completely free markets and a strict balanced budget.

Pretty good book on this by Ha-Joon Chang:
http://www.amazon.com/Bad-Samaritans-Secret-History-Capitalism/dp/1596913991

By: bungalowbill

bungalowbill — Tue, 29 Sep 2009 15:38:51 +0000

I think it’s a very good idea that emerging markets establish their own fund. But I doubt the Chinese who hold staggering reserves will have the guts to lead such an endeavor.

The CCP that governs China is too fearful of a popular backlash in case things go bad and they lose money. Remember the anger when some Chinese sovereign fund invested in Blackstone and lost money. The CCP will not take that sort of risk unnecessarily. At least with the IMF they can blame foreigners.