Impossible Mission Creep at the IMF

The International Monetary Fund (IMF) was created along with the World Bank in post-war 1944 at Bretton Woods. The plan was to prevent another worldwide depression and lift more people around the world out of poverty. It is not a lending institution, but rather its focus is to keep watch over monetary and exchange rate policies so important to the global markets. Or at least it was. It seems to have stepped out of its lane with its new Resilience and Sustainability Trust (RST). So far (as of December 15, 2022) the Trust has received from seven countries (not the United States) more than forty billion dollars and explains in generalities how it plans to use these funds:

The IMF helps countries tackle the challenges of climate change. Through its Resilience and Sustainability Trust (RST), the IMF plays an increasingly important role in helping countries with limited room in their budget address long-term challenges, including climate change.

 The Trust helps low-income and vulnerable middle-income countries build resilience to external shocks and ensure sustainable growth, contributing to their longer-term balance of payments stability. It complements the IMF’s existing lending toolkit by providing longer-term, affordable financing to address longer-term challenges, including climate change and pandemic preparedness.

The resilient ghost of John Maynard Keynes refuses to die.

To the extent that it intends to use these funds to address "climate change" challenges, whether or not you believe that climate change exists on a scale that requires substantial funding, the notion of adaptive measures seems to me more promising than impoverishing the world with pie-in-the-sky notions of achieving zero carbon dioxide emissions. Like most things, the worth of the project demands on the details and implementation. But there’s little detail to go on.

The Fund will be financed from Special Drawing Rights (SDRs), supplementary foreign exchange reserves. "Special Drawing Rights (SDRs) are an asset, though not money in the classic sense because they can’t be used to buy things. The value of an SDR is based on a basket of the world’s five leading currencies – the US dollar, euro, yuan, yen and the UK pound," explains the IMF. In essence it means wealthier countries channeling money to poorer and more vulnerable ones to provide for "climate change" adaptation and transitioning to cleaner energy sources.

A conference last April discussed whether the IMF trust can deliver inclusive and sustainable recoveries. It focused on the Special Drawing Rights management of the IMF. Without considering the fine points of the SDR program itself, it’s worth looking at the criticism of its operation detailed in this session to see the likelihood of the RST program achieving its goal.

Vimal Thakoor, senior economist at the IMF, explained the intention of the program. The IMF will provide the “catalyst “ for financing and establish a set of reforms “that country can push through as part of the RST.” Importantly “mitigation, adaptation and transition policies can be included in climate-related reforms.”

Panelists complained the allocations were unfair, mostly going to richer nations. (The IMF by tradition is headed by a European). Some participants took issue with the allocation of the program, claiming the $50 billion target was too small; others expressed concern that a conditionality of “accountability” was a problem, that the debt load for most of the African countries  was unsustainable. One panelist said all the countries’ debt to the IMF would be erased “if rich countries only donated 25 percent of their SDRs."

Some of these criticisms are in line with those earlier aimed at the IMF by those who think its economic reforms were counterproductive and devastating for the citizens in the countries who accepted IMF lending. (Greece and Spain are the recipients most cited by those who think the IMF policies have been too intrusive and counterproductive.)

In April of this year the managing director of the IMF, Kristalina Georgieva said 44 countries expressed and interest in borrowing from the RST fund. Five loans had been granted, the recipients being Rwanda, Barbados, Costa Rica, Bangladesh and Jamaica. I can find no explanation for the specific purposes these loans are to be made.

To take the first named recipient, Rwanda, it has a temperate to subtropical climate. It has two rainy seasons and two dry seasons a year. One India-based think tank (Strategic Foresight Group) has reported that the country lately has had fewer rainy days but more torrential rains, pegging the shift to "climate change."

Impossible mission or Mission: Impossible?

Since "climate change" (like racism) is blamed for everything, and weather is notoriously erratic due to a multiplicity of out-of- human-hands things like cyclones, solar output, etc., there have always been natural periods of above and below precipitation. The Biblical Joseph dealt with such natural weather cycles by adaptation— having the Pharaoh build storehouses for food in times of surplus. So the concept of weather shifts and adaptation are hardly new.

Modern agronomists have a number of adaptive suggestions for "climate change" resilience, including changing planting times, storing excess water in reservoirs, selecting plants accustomed to new weather conditions, diversifying crops, managing flood plains, and relocating planting where topsoil has been washed away by heavy rainfall. In other words, doing what smart farmers have done from time immemorial. Today, however, this is known as "resilience."

If the IMF focuses on genuine mitigation, it can help. The nature of the organization and its history, however, is ample cause for skepticism. More likely we’ll see yet another grand, very expensive and not terribly effective plan. Call it Mission: Impossible.

THE COLUMN: America's 'Transitioning'—but to What?

In case you haven't heard, the United States is currently in the process of "transitioning." For reasons of decorum, and to not upset the rubes, from what to what is never quite spelled out, but those of us who have been following the "progressive" Left for the past six decades or so have a pretty clear idea of what they mean. It was first brazenly articulated by candidate Barack Obama in a campaign appearance just before the 2008 presidential election when he said, "We are five days away from fundamentally transforming the United States of America.”

At the time, such braggadocio was largely chalked up to typical hustings rhetoric by a fresh new face eager to contrast his relative youth (Obama was 47 at the time) with the geriatric-adjacent ambulatory husk of John McCain, who was 72, You know, something akin to John F. Kennedy's line in his 1961 inaugural address about "a new generation of Americans, born in this century." JFK was born in 1917; Dwight Eisenhower, the man he was succeeding, had been born in 1890. Even though both had served during World War II (Eisenhower as Supreme Allied Commander in Europe, Kennedy as a Navy lieutenant in the Pacific), they seemed of vastly different generations. In other words, just talk:

Except, as we now know, it wasn't. Obama meant every one of those thirteen infamous words, and older folks who had lived through the 1960s knew exactly what he meant. "Change" was not simply a buzzword meant to distinguish the "new" policies of one party from the "old" policies of the other, within a context of broadly accepted governing principles and love for the nation as founded, including the primacy of the Constitution. Rather, it was a complete break from the American tradition, a kind of cultural-political coup whose message couldn't have been clearer.

The Trump interregnum interrupted the steady flow of "progress" away from the "charter of negative liberties" (Obama's phrase) that is our founding document and toward FDR's notion of the "Four Freedoms," first floated in an address to Congress on January 6, 1941, nearly a year before Pearl Harbor. Two of Roosevelt's four "freedoms" were freedom of speech and freedom of worship (redundant, since they were already enshrined in the First Amendment); the other two were freedom from want—"economic understandings which will secure to every nation a healthy peacetime life for its inhabitants, everywhere in the world"—and freedom from fear—"a world-wide reduction of armaments to such a point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor, anywhere in the world."

This was a speech aimed not at America but at the world as Roosevelt, heading into his unprecedented third term (it was, after all, an "emergency"), tried to drum up support for imperial Britain in its fight with its National Socialist German cousins, in the teeth of strong isolationist sentiment at home. But the ideas gained traction domestically over the succeeding decades, morphing into such left-wing notions as a universal basic income and unilateral disarmament. A transition was needed away from the self-reliance of the citizenry and the framework of a limited federal government, and so the two final amendments to the Bill of Rights, the Ninth and Tenth, were hastily consigned to the oubliettes of history, aka, the dustbin.

Both those amendments were intended to confine the central government to its enumerated powers, but generations of clever and malicious lawyers have all but destroyed such quaint notions as individual and states' rights. The latter was collateral damage of the Civil War and both were obliterated by the Civil Rights Act of 1964, as author Christopher Caldwell convincingly argues in his book, The Age of Entitlement: America since the Sixties. 

Though Americans are reluctant to admit it, the legacy of the 1960s that most divides the country has its roots in the civil rights legislation passed in the immediate aftermath of John F. Kennedy’s assassination. It was enacted in a rush of grief, anger and overconfidence — the same overconfidence that had driven Kennedy to propose landing a man on the moon and would drive Lyndon Johnson to wage war on Vietnam. Shored up and extended by various court rulings and executive orders, the legislation became the core of the most effective campaign of social transformation in American history.

Because it's wreckable, all right?

Thus began the "transition" in earnest. With Obamacare and the takeover of student loan programs, not to mention the corrosive effects of the auto industry "bailout," Obama went a long way in his two terms toward establishing the kind of centralized socialism his mentors and handlers desired; the country was lucky that his innate slothfulness prevented even more such "fundamental transformation."

The came Donald Trump's surprise victory over the Left's designated heiress, Hillary Clinton, which temporarily derailed their plans. Their furious counter-reaction began the day after Trump was elected; by Inauguration Day 2017 the media was already calling for his impeachment, and by the end of his first full month in office, the Left had claimed the scalp of National Security Adviser Mike Flynn, and it was all downhill from there. Henceforth, the administration was staffed by a cabal of its enemies, which spied on him, leaked to the media, disrupted the orderly working of the White House, supported his political foes, and began greasing the skids for his defeat—by any means necessary—well before the midterms. Alas, he was too ineffective a leader to do anything meaningful about it; after all, this is the man who hired Christopher Wray at the FBI and failed to fire him on his way out the door.

One thing the institutional Left couldn't dent while Trump was in power was the booming American economy, but from the moment bona fide geriatric semi-ambulatory husk Joe Biden supplanted him thanks to a "fortified" election in which both halves of the Permanent Bipartisan Fusion Party enthusiastically participated in order to get rid of him, the economy has hit the skids with malice aforethought. The social battles have largely been won by the Left, which is why you have drag-queen story hours at your local public library and "gender reassignment" disfiguring surgery for girls and castration for boys fervently advocated by Democrat government officials and their pet media. Shoplifting is legal in many places, and talk about freedom: you can poop on the sidewalks with impunity. 

Now it's the economy stupid, and its turn to transition. Just ask the Big Guy, who on his first day behind the Resolute desk unleashed a war on the energy sector, nominally in the name of "climate change" but in reality because, in the words of Gordon Gekko. "it's wreckable, all right?"

An "incredible transition," and don't you dare call it a "recession." Next we have Janet Yellen, head yenta-in-charge at the Treasury Department and former chairx of the Federal Reserve, to explain the transitioning of your pocketbook from full to empty:

And don't forget economic adviser Gene Sperling, an Obama retread and currently the White House coordinator for something called the American Rescue Plan, who's also got some transition 'splainin' to do:

Quoth this parrot: "This is an economic transition moment." He's right: damn the torpedoes, full speed ahead as we complete the "transition" from a store-of-value-based currency (the dollar, until Nixon wrecked it in 1971) to the wet dream of the Modern Monetary Theory brigands, for whom it's impossible to print too much funny money because, hey, we can always print more! 

Modern Monetary Theory (MMT) is a heterodox macroeconomic framework that says monetarily sovereign countries like the U.S., U.K., Japan, and Canada, which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending. Put simply, such governments do not rely on taxes or borrowing for spending since they can print as much as they need and are the monopoly issuers of the currency. Since their budgets aren’t like a regular household’s, their policies should not be shaped by fears of a rising national debt.

Don't try this at home, kids. But now that the adults are back, what the hell? If girls can be boys and boys can be girls, it's a mixed-up, muddled-up shook up world anyway. There is no innate nature to anything any more, and nothing really matters. As the Left's favorite economist, John Maynard Keynes, famously said: "In the long run, we are all dead," so let's party like it's 476 or 1543 or 1914.  It's the ultimate triumph of mind over matter, of fiat over gold, of fantasy over reality, and you're a bigot if you think otherwise. You're the enemy now. So like the blushing bride on her wedding night, lie back, think of England, and let the transitioning begin. After all, you have no choice. You're next.

Modern Monetary Theory Meets the Great Reset

Between 1930 when his two-volume magnus opus A Treatise on Money was published and his preparation of what became The General Theory of Employment Interest and Money, published in 1936, John Maynard Keynes had a very bad idea. His very bad idea formed the core of this latter, and much more famous book. Simply put, Keynes’s bad idea was that spending drove an economy. This idea had been eruditely pilloried by John Stuart Mill in the nineteenth century and -- kaput! It was gone.

But, hold your horses, bad ideas are not so easy to be rid of when they appeal to specious reasoning.

After all, who doesn’t like spending money? Of course, we know that if we spend too much ourselves, we will get into terrible trouble and end up in Queer Street. But suppose it’s the government spending money and, to boot, giving some to us. And, at same time, so-called economic experts are explaining that this spending will cure unemployment. Now that’s a bad idea whose currency persists. I expect it to be around in perpetuity.

So dumb only an egghead could love it.

Human history is replete with bad ideas. Slavery, bloodletting, Operation Barbarossa to name just three of very many. If we are lucky only one or two bad ideas hold sway at any one time. We are not so lucky. I will canvass four contemporary bad ideas plaguing our lives; or, at least, the lives of those susceptible to reason. And show how they have coalesced to form one grandiose idea hatched in a remote part of Switzerland.

You may have noticed that I haven’t mentioned the promotion of abortion on demand, gender dysphoria and men in frocks playing sport against women, or iconoclasm, or national self-loathing, or trigger warnings and ‘hate-speech’ on university campuses. All of these, and more, are redolent of contemporary bad ideas too. But one runs out of puff covering them all. In any event, it is the four I’ve canvassed which lead to Switzerland.

Follow the logic below. It is a stretch. But since when has that been an unjumpable hurdle for the leftist mindset.

Green New Deals whether of the AOC variety or of the slightly watered-down Biden/Sanders variety or even of the Boris Johnson variety are, shall we say, on the expensive side. Lots of things to be done and so little time with the planet we know and love on the brink of extinction:

  1. Undermining reliable sources of energy (to wit, coal, oil and gas) while subsidising unreliable sources of energy (to wit, wind and solar).
  2. Chasing internal combustion engines off the road while building a whole new infrastructure to power electric cars.
  3. Refitting many thousands of buildings to increase their energy efficiency.
  4. And, lest we forget, somehow reducing the belching proclivity of farm animals; or, alternatively, mandating mass switching to veganism.

None of this will come cheap. This is where MMT comes to the rescue; whether it is called that or not. Required, à la MMT, is a carefree approach to government spending and borrowing; all underwritten by central banks keeping their money-printing presses (figuratively speaking) at the ready.

MMT -- it's fun and better yet, it's free!

And, in case you don’t see the next connection, lockdowns have already provided a trial run. Governments have borrowed and spent big to keep the ship of state afloat after crippling their economies and throwing millions out of work. Financial restraint has been defenestrated. It will be a much more sellable proposition than it ever would have been to spend and borrow still more to underpin economies (MMT / Keynesian-style) and, at the same time, save the planet. And that isn’t all.

The emergence from lockdowns to a greener future provides yet another opportunity. And this is to lift those whose underprivilege has cruelly held them back. To be fair, innately overprivileged though they are, poor white guys and gals are not specifically excluded.

If you haven’t already guessed, the coalescence of four bad ideas have ineluctably led me to The Great Reset – and to its goal of producing a greener, more inclusive, more equitable world. This latest manifestation of the utopian-pipedream genre was unveiled in May 2020 by the World Economic Forum, which is made up of rich people and notables, passionate about saving the planet from fossil fuels, who fly into Davos Switzerland from their mansions or yachts each year in their private jets. You sense they know that they could run things much better than the hoi polloi ever could.

Prince Charles together with Klaus Schwab, the chair of WEF, presided over the great unveiling of The Great Reset:

There are reasons to believe that a better economic system is possible—and that it could be just around the corner. As the initial shock of the COVID crisis receded, we saw a glimpse of what is possible, when stakeholders act for the public good and the well-being of all, instead of just a few... Rather than chasing short-term profits or narrow self-interest, companies could pursue the well-being of all people and the entire planet. This does not require a 180-degree turn: corporations don’t have to stop pursuing profits for their shareholders. They only need to shift to a longer-term perspective on their organization and its mission, looking beyond the next quarter or fiscal year to the next decade and generation.

Building such a virtuous economic system is not a utopian ideal.

Can a cacophony of four bad ideas produce a harmonious good idea? Maybe for those living in the Davos bubble. Not for those living in struggle street; white, black or brown.