Dominique Strauss-Kahn‘s recent arrest has left marks in the areas of international politics and economics. Some defend the man, some defend the reform-minded IMF chief and some criticize him for being a neoliberal apparatchik. There is no doubt whatsoever that Strauss-Kahn was an elite technocrat and a major political personality in France. He also was a socialist in name only, a figure who represented the political collapse of socialism in France. But, was he a reformer of the International Monetary Fund?
Dean Baker, an American economist, believes he was. Baker recently defended Strauss-Kahn because of Strauss-Kahn’s work at the IMF:
Dominique Strauss-Kahn tried to shake up this institution. He brought in Olivier Blanchard from MIT, one of the world’s most prominent macroeconomists, as the IMF’s chief economist. He gave Blanchard a free rein, which he quickly used to harshly criticize the orthodoxy within the IMF.
Last fall, the IMF published a study in its World Economic Outlook that showed that fiscal austerity in the wake of the economic crisis would further contract demand and raise unemployment. This reversed the institution’s historic role; the IMF officially became a voice for expansion and employment rather than contraction and austerity.
Of course the story at the country level was often quite different. The teams that imposed specific terms for IMF support are well entrenched. Their plans for “internal devaluations” (declining wages and prices) in countries like Estonia and Latvia pushed their unemployment rates to nearly 20 percent. Getting the country-level teams in line with any new thinking at the top was likely to be a long and difficult process even in the best of circumstances.
If the charges against Mr. Strauss-Kahn hold up, then he will not be around to carry this effort forward. As far as for what the future holds, his interim successor, John Lipsky, was a former vice president at J.P. Morgan. This could mean that the whole world will suffer for Mr. Strauss-Kahn’s criminal conduct.
Bernard-Henri Lévy, a French journalist and longtime friend of Strauss-Kahn, used the purple prose which marks his style to defend Strauss-Kahn against the charges made by his accuser, the New York Police Department and the New York District Attorney’s office, on the one hand and plead for special treatment for Strauss-Kahn, on the other:
I do not know what actually happened Saturday, the day before yesterday, in the room of the now famous Hotel Sofitel in New York.
I do not know — no one knows, because there have been no leaks regarding the declarations of the man in question — if Dominique Strauss-Kahn was guilty of the acts he is accused of committing there, or if, at the time, as was stated, he was having lunch with his daughter.
I do not know — but, on the other hand, it would be nice to know, and without delay — how a chambermaid could have walked in alone, contrary to the habitual practice of most of New York’s grand hotels of sending a “cleaning brigade” of two people, into the room of one of the most closely watched figures on the planet.
And I do not want to enter into considerations of dime-store psychology that claims to penetrate the mind of the subject, observing, for example, that the number of the room (2806) corresponds to the date of the opening of the Socialist Party primaries in France (06.28), in which he is the uncontested favorite, thereby concluding that this is all a Freudian slip, a subconsciously deliberate mistake, and blah blah blah.
What I do know is that nothing in the world can justify a man being thus thrown to the dogs.
To this Matt Welch offers the following as a rebuttal:
I’m guessing what BHL really means here is that no worldly rape can justify Strauss-Kahn’s treatment. Since if the accusations are true, a 62-year-old man known by every French person I’ve asked to have the sexual manners of a primate lunged nakedly at hired help half his age, grabbed her breast, knocked her to the floor, and chased her around his expensive hotel suite attempting with some success to thrust his penis into her body and discharge DNA evidence.
I don’t know if he’s guilty, and it would be imprudent not to consider the conspiracy theories in a case involving someone who until this week was the single biggest political threat to the sitting president of France, but the only decent way you can arrive at “nothing in the world can justify” Strauss-Kahn’s treatment is if you oppose all perp walks equally. Short of that, it’s just special pleading for a powerful dick. And another reminder that BHL is 10 times the national embarrassment to France than Jerry Lewis or even Johnny Hallyday ever was.
Update
Dianna Johnstone takes the harsher position on Strauss-Khan, his politics and this scandal, one closer to my first take on the man. She wrote:
But the real scandal for the Socialist Party is the one it does not even begin to recognize: that it was pinning its electoral hopes on a leading champion of global capitalism, the president of the IMF. Whatever the outcome of the New York proceedings, the bursting DSK bubble marks the total degeneration of the Socialist Party in France, for reasons that have nothing to do with his sex life.
The crisis of the PS was long in the making.
Thirty years ago, the wily François Mitterrand led Socialist Party politicians to an election victory they are still celebrating. Initially allied with the French Communist Party, the better to subjugate and destroy it, Mitterrand’s Socialists started out in a blaze of reforms, ending the death penalty, nationalizing enterprises and lowering the retirement age, only to turn around a couple of years later and abandon socialist economic policies as impossible to pursue in the free market context of the European Community (now the European Union). The Mitterrand era in reality buried socialism, or even social democracy, but the Socialist Party went on calling itself “the left”. This no longer referred to economic policies favoring the working class but above all to moral issues such as anti-racism and all sorts of vague good intentions.
The Socialists were no longer socialist, without being anything else.
Well, they did embrace neoliberalism.
With Dominique Strauss-Kahn, the mere absence of socialism evolved into something much more vigorous: unabashed promotion of global capitalism. After becoming Minister of the Economy, Finances and Industry in 1997, he totally reversed the early Mitterrand direction, carrying out a wave of major privatizations, turning over French telecommunications, steel, aerospace and other key industries to the whims of international finance capital. This was to be expected from the vice president of the high level “Cercle de l’Industrie”, which he joined in 1994 at the invitation of Raymond Lévy, then head of the Renault auto manufacturer. In this charmed circle, dedicated to promoting the interests of industry in the European institutions, DSK hung out with the same crowd of top French capitalists whose company so delights Nicolas Sarkozy. Indeed, it is only fair to suggest that Sarkozy chose DSK to head the IMF not only, as is constantly repeated, to keep his rival out of France, but also because the two see precisely eye to eye when it comes to international financial policy.
Consistently, DSK opposed the last Socialist Party reform intended to favor the workers, namely the reduction of the work week to 36 hours adopted in 2002. Having written his doctoral thesis in economics on “human resources”, he has argued in favor of both a longer work week and raising the age of retirement, “now that we live a hundred years”.
A report now has an incarcerated Strauss-Khan subject to a suicide watch.
All Tied Up and Nowhere to Go 
Neoliberalism is an ideology and a compulsion
2.23.2012 1 Comment
Mike Whitney and Dean Baker argue that those leading the European Central Bank, the European Union, and the International Monetary Fund (The Troika) find it difficult to experience the world but through the lens of their idiotic economic theory. Baker had the recent opportunity to observe the Troika in action. He drew this conclusion:
Mike Whitney’s analysis affirms Baker’s assessment. Whitney notes that, “If Greece’s €130 billion loan was going to be used for fiscal stimulus, then it might be worth the commitment. Because that kind of money could put a lot people back to work and kick-start the economy fast.” Yet…he continues by observing:
Indeed, why would Greece accept the bitter medicine dispensed by the European Union?
An austerity politics entails personal suffering for many people. It immiserates them by design. This effect is considered a feature of an austerity regime. And the Greeks have already suffered, as we know. But an austerity politics also makes little sense during a recession. It is a policy regime a crazy person recommends.
The upshot: The government of Greece, if it were rational, would take the Argentinean path to recovery. Country debt and risk are not perpetual prison sentences. If Greece were to take this path, it would default on its obligations and exit the European Union (advocated here). It ought to do so because its current predicament and the proposed — or imposed — ‘remedy’ for it will only serve to transfer wealth to the financial institutions holding Greece’s debt and, of course, to plunder the country of those assets worth owning (discussed by Michael Hudson here). Greek “have-nots” have and continue to protest this imperial imposition on their country. It is rational for them to do this just as it is rational for the Greek government default on its financial obligations and jettison the Euro.
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Filed under Commentary Tagged with Dean Baker, Economic Predation, Eurocrisis, European Central Bank, European Union, Greece, Imperialism, International Monetary Fund, Mike Whitney, Neoliberalism, Politics of Greece