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Today's Top News
Could Congress Block Antiworker IMF 'Bailouts' in Europe?
Republicans in Congress are trying to block the U.S. Treasury Department from supporting U.S. tax funded International Monetary Fund contributions to the so-called "bailouts" in Europe, which, as economist Mark Weisbrot explains, aren't bailouts for working families at all - for working families, the IMF programs guarantee extreme hardship, and most Europeans would be much better off if these IMF packages collapse - but bailouts of European banks with bad loans.
The purpose of the IMF packages is to force European working families to pay off the banks' bad loans through economic austerity, rather than forcing the banks to take their losses on their bad bets, which would be capitalism, or at least the capitalism they lecture us about it in school and on the nation's op-ed pages when the politically weak are on the chopping block. As we know from the recent Latin American experience, if a country like Greece defaulted on the bad debt and got it over with, economic growth could resume. But the IMF is more of a collection agency for the big banks than an institution concerned with boosting economic growth and employment or reducing poverty.
The Wall Street Journal says the House Democratic leadership is unlikely to bring the Republican measure to a vote, and that's certainly true - the House Democratic leadership is likely to do whatever U.S. Treasury wants, and U.S. Treasury is likely to want whatever Wall Street banks want, and Wall Street banks are likely to see this as an issue of banker solidarity - this time the taxpayer financed IMF slush fund is being used primarily to benefit European banks, but the next IMF bailout could primarily benefit New York banks. One hand washes the other.
However, a majority of Members of the House can force a vote on an issue through a discharge petition. A discharge petition isn't an everyday thing, but a U.S. taxpayer- funded bailout of European banks at a time when U.S. measured unemployment is nearly 10% - the real rate may be nearly double that - and we're being asked to fork over $33 billion more for pointless slaughter in Afghanistan - isn't an everyday thing either.
And these European bailouts are arguably a much worse deal than the hated Wall Street bailout for U.S. taxpayers - there is no plausible story that they are needed to save the U.S. economy, and they are coupled with cruel austerity packages to make working families in Europe scream. Imagine the Wall Street bailout, now coupled with a plan to cut the wages of American workers and raise the retirement age for Social Security. Why should the majority of American working families go along with this?
If past votes on IMF banker bailouts are any guide, House Republicans are likely to move as a disciplined bloc. So the question boils down to this: is there a decent handful of progressive and conservative anti-IMF Democrats in the House who are willing to throw in their lot with Republicans to try to block anti-worker IMF loans in Europe?
There are some hopeful precedents in the past. The first time the Wall Street Bailout came to the floor, the House blocked it. And in 1998, a group of House Democrats led by Dennis Kucinich, Peter DeFazio, and Bernie Sanders joined with House Republicans to repeatedly block the then-princely sum of $18 billion in tax dollars for the IMF to bail out banks from their bad loans to Asia.
And that was back when the AFL-CIO supported the IMF. Lately President Trumka's AFL-CIO has been bashing the Wall Street banks. What if the AFL-CIO decided to go rogue on the IMF? Support for the IMF from many House Democrats could no longer be assured.
And what if Greek- and Eastern European-Americans lobbied Congress against the IMF? It could be a whole new ballgame. Who knows what could happen when white workers in Europe start to resist the IMF's Africa treatment? Maybe Americans would notice.
The Wall Street Journal points out that the U.S. share of the votes in the IMF is "only" 17%, so if only the U.S. votes no, the IMF packages can still go through. But that assumes that the rest of the world would all support the IMF extreme austerity bailout loans. Of course European governments will likely support them, because the European finance ministries are controlled by the European banks, just as the U.S. Treasury department is controlled by Wall Street. But why should Brazil, Argentina, Russia and China - countries which have all rejected IMF extreme austerity policies - vote for the European banker bailout and antiworker austerity packages, if the "consensus" of the IMF is broken?
There is a "murder on the Orient Express" quality to these anti-taxpayer and anti-worker bailouts - if you can convince everyone that they are inevitable, and that everyone else is going to go along, the antidemocratic bailouts can proceed. But once a rebellion begins, there's no telling how far it might spread.