Why does Bush and the GOP support the World Bank?
A federal program, Ronald Reagan used to say, is the closest thing to eternal life here on earth. Even the Gipper conceded he failed to get control of the federal behemoth.
At least he tried. But what can be said for the conservative movement today, as one witnesses the Wall Street Journal battle to save the $400,000-a-year tax-free sinecure of World Bank President Paul Wolfowitz, imperiled because Wolfie parked his World Bank squeeze over at State at a fatter salary than Condi Rice's?
There was a time when the Republican Party would have seized on this scandal to try to defund this 63-year-old relic. No more.
Yet, what is the purpose of keeping the World Bank and International Monetary Fund, the United Nations and its agencies, and NATO, all of which date to an era long gone?
The World Bank and IMF were created when the United States was the greatest creditor on earth. The bank was to lend for the reconstruction and development of Europe and Asia. The IMF was to provide loans to help members with balance of payments problems.
When Europe and Asia recovered, the need for the World Bank came to an end. By 1971, when the United States closed the gold window and let the dollar float, the need for an IMF to maintain fixed rates of exchange, in a world of floating rates, disappeared.
Yet both institutions reinvented themselves as lenders of last resort to bankrupt Third World regimes, and Republican presidents and a Republican Congress went along. Why?
Why should the United States, now the world's largest debtor nation, go out into the capital markets and borrow billions, so the World Bank and IMF can continue to subsidize the most corrupt and least competent regimes on earth? Does this make sense?
Between them, the Japanese and Chinese have amassed $2 trillion – two thousand billion dollars – in reserves. Why not turn the IMF and World Bank playpens over to them?
Though the soft-loan window of the World Bank, the Institutional Development Fund, was created to help "the poorest of the poor," 8,000 of the 10,000 World Bank employees live and work in the Washington area, where "World Bank neighborhood" is a realtor's way of saying, "You can't afford it."
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