An Opponent of the IMF

An Opponent of the IMF
by JBS President Emeritus John F. McManus

The 1944 creation of the International Monetary Fund occurred even before the formation of the United Nations in 1945. But the IMF has long appeared on the organizational chart published by the UN and is without doubt one of the many UN divisions.

The International Monetary Fund is among one of the many UN divisions (image from Flickr by Mike Licht, NotionsCapital.com, some rights reserved).

Tasks of this money lending UN agency include keeping tyrannical and profligate nations afloat while financing questionable business ventures. Its chief creator, American Communist Harry Dexter White, didn’t have the best interests of U.S. taxpayers in mind. Neither has the UN. Over the years, IMF funds have bailed out Poland, Mexico, Brazil, Venezuela, Colombia, and others. There is hardly a deadbeat nation that hasn’t received IMF funds to keep it going.

Maybe some of this is about to change. President Trump has nominated Adam Lerrick for an undersecretary post within the Treasury Department. The post oversees U.S. involvement in international finance. His credentials as an opponent of bailouts for countries, banks, and investors are well known. In recent years while holding down a post at the American Enterprise Institute, he has sharply criticized the IMF for throwing money at the likes of South Korea, Brazil, Argentina, and Greece.

According to a report in The New York Times, Lerrick’s outspokenness endeared him to Reagan administration economist Allan Metzger. The two even coauthored a study in 2000 which critiqued the IMF and World Bank. They want countries to suffer the consequences of disastrous monetary policies. Metzger, now a professor at Carnegie Mellon’s business school, expressed the following welcome view of flawed IMF policy, an opinion obviously shared by his friend and fellow IMF critic.

It’s corrupting to give money to countries like Greece that never reform; those are taxpayer monies…. If we bail out countries that do things that are not in the interests of their citizens, then we just get more of the same. Adam [Lerrick] is the right man for this job.

At a Senate hearing in 2000, however, Lerrick was asked if there is any need for an IMF. His answer was guardedly positive. He believed then that the IMF is useful as a lender to emerging markets. “But reforms must be instituted to make sure costs are minimized, if not eliminated.”

Lerrick registered his somewhat positive attitude about IMF almost two decades ago. Have the more recent outrageous bailouts of European nations sharpened his view? Time will tell, of course. But there appears to be hope that American taxpayers will be paying less – and maybe nothing – to rescue deadbeat governments. Credit President Trump for reaching out to find someone who believes that America’s financing of reckless policies among some countries has to stop.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.