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Show THE UNIVERSITY JOURNAL· SOUTHERN U!Afl U.NWRSITY • MONDAY, OCTOBER 5, 1998 MOLLY IVINS COMMENTARY Econo,nic crisis Some smart aleck aide in the White Ho use said to Newsday the other day, "lf we got Netanyahu and Arafat coming here and shaking hands on a deal for an Israeli pullout, the question is, will we get a Wag the Dog interpretation?" The trouble w ith the smart aleck's question is that there is no question about it: So purblind is the media/Republican obsession with the president's sex life that his standing ovation at the United Nations and s ubseque nt meetings with w orld leade rs o n the international financial collapse were as nothing- a bare blip on the media sc ree n , not eve n a m o m e ntary dis tracti o n fo r th e Republicans in their effort to elevate oral sex to the crime of the century. As President Clinton focused on tottering economies around the world , his s peech was d ism issed as yet an other ruse to draw attention away from the more important issue of exactly where he to uched Monica tewinsky. This. Is. Insane. In what may yet become the single stupidest act in the annals of folly, let it he recorded that o n Sept. 17 , 1998 , in the face of international economic calamity, the House of Representatives aga in re fu sed to approv e $1 8 billi o n fo r th e Inte rnati o na l Monetary Fund. Now, if you were to make the argument that the IMF should not be re-funded because its prescription fo r countries in economic collapse makes things worse , that is a fai r argumen t, although even the IMF is showing signs of getting it now. But that's not what the Republicans arc doing; they're refusing to re-fun d the IMF hecause Clinton wanL<; them to. Not since Nero fiddled while Rome burned has the world seen folly like this. The basic argumen t against t he current IMF prescription is simple Keynesian economics (and even Richard Nixon, you may recall, claimed co he a Keynesian). The IMF has heen insisting that other nations raise their interest rates, instead of cutting them, and c ut their sp ending instead of inc reasing it. Is that what we wouJd do? As o ur economy starts to slow , you n otic ed th at t he hig cry , a n d t h e n ext move mad e by Alan Greens pan and the Fed , was to CUT interest rates. Instead of letting Asian , Russian and now Latin c urren cies decline , the IMF has insisted that other countries prop theirs up. Poor Russia took IMF advice, and the onJy people who benefited were currency traders. For three critiques of what is wrong with IMF policy from three interesting vantage points, I recommend these recently published essays: Paul Krugman in the Oct. 5 issue of The N ew Republic, "How Washingto n Wo rsen e d As ia 's C r is is " ( Keyn es ian persp ective); Bernie Sanders in the Sept. 28 issue of The Nation , "Glob alization's the Issue " (socialist p e rspective); and Mahatir Mohamad , prime minister of Malaysia, in the Sept. 21 issue of Time, "Call Me a Heretic If You Like " (from outside the box) . So if the IMF is doing everything backward, why would we want to support it? Because we can't influence it if we ain 't in it, it's the only tool we've got, and we should be able to get it going in a better direction. Mean while, Clinton declared the economic crisis "the biggest fi na ncial c hallenge faci ng the world in a h alf-century" and prescrib ed a Keynesian d ose . He w ants to drop the fam o us Greenspanian inflation-phob ia, s pur growth and get the World. Bank to double its aid in Asia. He 's also calling fo r a s ummit meeting of finance ministers both from the afflicted and the as-yetunaffli cted nations. The Group of Seven industrialized nations, coordinated by the Treasury Department, issued a joint statement signaling coordinated interest rate cuts. ... Clinton also called for the use of emergency IMF money for Brazil, the nation everyone is now watching. The consensus is that if Brazil goes, we're all sunk. But Brazil is the last place to try the usual IMF prescription, which is why Clinton's leadership is so important. Inflation is low, and unemployment·is already high in Brazil. lf they cut interest rat.es and increase spending, they should get increased business activity and employment out of it. 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