A BIG caveat on more IMF funding

If the European Union, and the U.S., is on board for more funding for the International Monetary Fund, the old “cui bono” must have its head brought up to see the shadows of Big Finance.

An IMF with more money sounds good, but…

More money to do what?

If the IMF of 1990s austerity budgets is simply revived, and trained on Iceland, Hungary (again), maybe Malaysia, etc., well, then we haven’t made any progress after all, have we?

You think the IMF has changed its spots? Think again. And again. And again.

Recent details of IMF loans suggest they haven’t learnt their lesson – Pakistan was recently told to raise interest rates and electricity tariffs, Hungary to devalue its currency and increase interest rates, Latvia to reduce its local government wage bill, Serbia to cut public sector pay and El Salvador not to increase its fiscal deficit.

So, everybody in favor of giving, not the G20, but the old G7, ultimately, more financial bully power, sure, raise your right hands.

Oh, and that scary “Chinese” idea for a new world reserve currency?

Unless Joe Stiglitz just moved to Beijing and renounced his U.S. citizenship, I don’t think he’s Chinese. And, as Nicholas Dearden observes, neither is the UN Commission of Experts established by the President of the General Assembly on the financial crisis.

Michael Hudson offers one more talking point. He claims the global “dollar glut” helps finance American military expansionism.

Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.

Hmm… Beijing and/or Moscow wouldn’t be at all upset about that now, would they?

Hudson points out that when sovreign wealth funds, whether from China or elsewhere, look at making major investments in things besides various aspects of the financial market, “national security” or other red flags get waved. (Sidebar: That ought to tell you just how important the “financial sector” actually is.)

When you read stuff like this, you realize just how much a Krugman (along with more neolib types) is missing the boat on European debt concerns.

And, folks, stuff like this is why I read Counterpunch. Where I read stuff like this.