The IMF Board Must Resign
Due to Incompetence!
Feb. 10, 2011 (EIRNS)This statement was issued today by Helga Zepp-LaRouche, Chairwoman of the Civil Rights Solidarity Movement (BüSo) in Germany.
In view of what the scandalous incompetence of the IMF's internal Independent Evaluation Office (IEO) has practically demonstrated about all of the International Monetary Fund leadership, its organizational structure, as well as its overall analysis and working methods, the only possible conclusion that can be drawn is that the entire IMF board, as well as its leading associates, must resign, or they must provide proof that they are ready to correct the mistakes they have made.
Whether deliberately or by accidental coincidence, the IEO report reads like a defensive excuse for the total failure of the IMF in the face of the totally appropriate accusations which had been raised two weeks ago in the Angelides reportalso called the Financial Crisis Inquiry Commission (FCIC) reportof the U.S. Congress, on the causes of the global financial crisis. The FCIC report after an 18-month investigation came to the conclusion that the global financial crisis could have been avoided, and that it was the result of human actions and ommissions, and not the outcome of Mother Nature or computer models gone crazy. The report names the repeal of the Glass-Steagall standard under Alan Greenspan and the resulting deregulation of the financial markets, as well as the total failure of financial institutions and regulatory agencies, as the main cause for the crisis.
The Angelides Report confirms, 100%, all the forecasts and analyses which my husband Lyndon LaRouche made in connection with the financial crisis. A precise comparison of the investigative conclusions of the Angelides Commission and LaRouche's forecasts and analyses is available.
In the 50-page report of the IEO, which has been published on the Internet, the following amazing list of admissions can be found:
- The IMF was incapable of recognizing the risks in the financial system and expressing the appropriate warnings;
- it had analytical weaknesses and organizational structural problems;
- there was group think,
- intellectual bias,
- false assumptions,
- faulty analytical methods,
- an absence of cooperation among departments,
- unclear lines of responsibility,
- dread of making critical statements,
- failure of supervisory bodies,
- the avoidance of problems,
- cognitive prejudices,
- organizational blindness,
- exclusive acknowledgement of information, which coincided with one's own expectation,
- disregard of differing information,
- gaps in knowledge, whereby risks and weaknesses are no longer recognized,
- mistaken conceptual system for explaining the connection between macroeconomic processes and the financial sector,
- stereotyped thinking,
- indoctrinated resistance against advice from the outside,
- a mentality of accommodation, and
- lack of punishment or penalties in the case of mistakes made on the basis of accepted assumptions.
In any normal firm, associates to whom the here-cited incapacities were attributed, would be immediately fired or moved to a position where they could do no further harm.
The harm which the IMF has committed with its brutal conditionalities in countless countries, is immense. The most dramatic example of the total failure of IMF policies is currently Egypt, where the Mubarak government has been foolish enough to carry out the full privatization program of the IMF, with the result that the precious national patrimony was sold off cheaply to foreign investors, unemployment stands at 30%, and poverty and hopelessness have become unbearable above all for the youth. The result is the now ongoing explosion which was foreseeable. The bitter poverty of billions of other people in the whole world is also the result of the incompetence of the IMF.
The comment of IMF head Dominque Strauss-Kahn, that the fund has honestly acknowledged the mortifying fact of the failure and promptly responded, is, after a three-and-a-half-year crisis without any real countermeasures, really a bad joke. One can only hope that France draws the right conclusion in the next election.
There is only one way that the IMF board can show that it wants to correct its serious and multifaceted errors: It must support the immediate restoration of a global Glass-Steagall standard. Otherwise resignation is the only option.