Washington Post on A16

[Brad De Long]

>Brad De Long wrote:
>
>>  Meltzer Report.
>>
>>  There are a bunch of people who think that problems with the world
>>  economy arise because it is not laissez-faire enough--that the World
>>  Bank and IMF are bad because they are institutions of collective
>>  self-government that interfere with the free operation of the market
>>  by creating moral hazard, pushing prices away from market equilibrium
>>  values, and so on.
>>
>>  That bunch of people are stronger than you are. And you are aiding
>>  them. It's like watching people congratulate themselves on kicking
>>  the ball past their own goalie...
>>
>
>Yeah, there are also a bunch of people who think the earth is flat. I don't
>particularly care. Without the IMF, countries in financial trouble 
>will be more
>likely to default rather than turn their population into debt-servicing
>machines. That alone is a good argument to shut the thing down.

Doesn't the fact that you are on the same side as Pat Buchanan make 
you worry that perhaps he has read the situation better than you 
have? Look at your allies, for God's sake!

Default is bad news. It took how many years after Mexico's effective 
default in 1982 for the economy to start to grow? Six? And it took 
how many years after Mexico's non-default in 1995 for the economy to 
start to grow? One?

If your ideal is North Korea, default is an option.

If your ideal is something different, then you have to deal with the 
fact that the dominant feature of post-1945 economic history is that 
the countries that integrate themselves into the world economy--that 
export a lot, use the proceeds to buy capital goods to build up their 
productive capacity, and then export some more--are the big winners.

We want to build up more winners on the periphery that learn from and 
about the technologies of the industrial core. You want to build up 
more autarkic losers on the periphery.

Brad DeLong, muttering about cashew nut buying monopolies in Mozambique...