Comparing Clinton regime to Hitler regime

Brad De Long delong at econ.Berkeley.EDU
Mon Jun 7 16:53:04 PDT 1999



>
>Charles: But a news item has just been posted claiming that the current
>Clinton regime ( of which someone said you were a member) , through its
>control of the IMF , has managed to shove 200 million people into poverty
>by its neo-liberal economic policy, in the latest world recession alone.
>There is a good chance that 30 million of those people will die premature
>deaths. So, there is evidence that you should add your own regime to your
>list.
>
>You don't do body counts on American regimes' very reckless policies
>resulting in mass poverty and thus premature deaths, or else you would
>have many more extremely reckless policies to label as killing millions.
>
>Your critique of disasterous and deadly economic policies means you're in
>a glass house and throwing stones.
>
>
>Charles Brown

The _tu quoque_ argument is the last resort of those who have no other arguments. And it makes no sense at all: the fact that Y is bad has no bearing on our evaluation of X.

My friends who do food policy tell me that (Indonesia possibly aside--although I hope not) it is going to be hard to see the impact of either the 1995 Mexican or the 1998 East Asian financial crises in life-expectancy or infant-mortality statistics. I believe that the impact will be there: poverty and income inequality will take their mortality toll (albeit slowly and partially) even if our statistical measures are too crude to see it.

I do think that the U.S. regimes of the 1980s and 1990s--Reagan and his Congress, Bush and his Congress, and Clinton and his Congress--are going to be judged very, very harshly indeed by History. Their failure to find the resources to do a real Marshall Plan for eastern Europe that might have made what is optimistically called "transition" a great success is a great disaster. (I very much hope that our failure to seriously support reform is not going to make us very sorry after the fact--that the regime that follows Weimar Russia will be much better than the regime that followed Weimar Germany.) And our cutting foreign aid budgets (including debt relief funds) to the bone over the past two decades has greatly worsened possibilities for rapid development on the periphery.

On the other hand, I think that the senior IMF officials of the mid- and late-1990s--Michel Camdessus, Stanley Fischer, Michael Mussa and company--is going to be judged very positively by historians. The 1982 global economic crisis was followed by a near-decade of recession and stagnation--the so-called "lost decade of development"--throughout practically all of Latin America, Africa, and much of South Asia. By contrast the 1994-5 Mexican crisis caused only a one and a half-year long interruption in economic growth. And it looks as though (Indonesia aside, which is still hanging in the balance) the 1997-8 East Asian crisis is also causing only a one or two-year long interruption in economic growth.

Stanley Fischer thinks that the difference is that in the 1990s the IMF went in on a much bigger scale, providing much larger loans in order to try to keep the web of international financial intermediation from unraveling and requiring *immediate* policy changes as a condition for large-scale IMF support. I think that he is right: certainly those in the Reagan and Bush Treasuries who argued that the IMF and the U.S. should play a minimal role in the 1980s Latin American debt crisis, which should be worked out between lenders and borrowers, seem to have done no good service.

Moreover, I suspect that Fischer believes that if the G-7 had given the IMF twice as much in the way of resources it could have done much more, and made the recessions both in Mexico and in Asia much shallower than they turned out to be. I am on Jeff Sachs's side in this one: the big problem with the IMF is that it doesn't have enough money, and so can't make loans big enough for long enough periods at low enough interest rates to be a real world lender-of-last-resort.

Reducing the "slump" phase of the international business cycle at the periphery from a period measured in years to one measured in months is--if it in fact comes to pass--a major, major victory for human possibility.

Brad DeLong



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