Let the Asian Tigers Fend for Themselves
Simply stated, the role of the U.S. government in the bailout of four East Asian countries is an outrage and a flagrant example of the power that Big Money has in American politics. It also exemplifies the degree to which both major political parties ignore the needs of ordinary people, and why a majority of American citizens have given up on the political process.
Somehow, at a time when President Clinton, Speaker Newt Gingrich and many others in Congress have told us that we have to cut back on Medicare, Medicaid, veterans’ programs, affordable housing and children’s needs, enough money suddenly appears in the Treasury so that, within a few weeks’ time, we can provide $15 billion to $20 billion to support IMF/World Bank loans to Indonesia, Thailand, the Philippines and South Korea.
Twenty-two percent of the children in this country live in poverty, millions of elderly people cannot afford their prescription drugs, and 40 million Americans lack health insurance. For these people, there is no government money available. They are lectured, instead, about how tough and full of risks the world is and how the government can’t protect everyone. But when foreign governments, some of which are led by corrupt authoritarian billionaires, need assistance, the U.S. government is there in rapid response fashion.
Where are the risks for the poorly managed governments that have run their economies into bankruptcy? Where is the “magic of the marketplace” for the reckless investors and predatory speculators who have made huge profits in Asia? Where are the pious and fine-sounding words now about the “self-regulation” of the free enterprise system?
And what about the deficit and our national debt? It’s not just Clinton and the corporate Democrats. Where are all those conservative Republicans who for years have been worried about federal spending, balancing the budget and the “limits of government?”
Here are just a few of the concerns I have with the Asian bailouts and the entire process:
* Having listened to the House spend endless hours of debate during the recently concluded session over appropriations of $1 million, I find it incredible that there has not been one word of floor discussion regarding a bailout that places at risk an estimated $15 billion to $20 billion of U.S. taxpayers’ money. This projected multibillion dollar loan is almost twice as much as the entire foreign aid appropriation bill, to which Congress devotes hundreds of hours of scrutiny. What is the proper responsibility of Congress when huge sums of public funds are put at risk? Can the president act unilaterally on an issue like this?
* Does U.S. participation in these IMF/World Bank loans follow Congress’ mandate on human rights? The Sanders-Frank amendment of 1994 requires the secretary of the Treasury to direct U.S. executive directors of the international financial institutions to persuade the IMF and the World Bank to adopt policies that encourage borrowing countries to guarantee internationally recognized workers’ rights. Have these Americans done that? To the best of my knowledge, there is no language in any of these loan agreements guaranteeing internationally recognized workers’ rights. In Indonesia, Muchtar Pakpahan, the head of the independent Indonesia Labor Welfare Union, is still in jail because of his belief that workers have the right to join unions.
* How much money is in the Exchange Stabilization Fund, and what are the precedents and conditions for utilizing that fund? Can the president really bail out any country at any time and for any reason?
* Who will be the major beneficiaries? According to the State Department’s annual human rights report, “Despite a surface adherence to democratic forms, the Indonesian political system remains strongly authoritarian. The government is dominated by an elite comprising President Suharto (now in his sixth five-year term), his close associates and the military.” Suharto and his family have an estimated worth of $30 billion and control large sections of the Indonesian economy. How much of this assistance will go directly to the Suharto family? Are these really the people that the U.S. government should be bailing out?
* What precedent is this bailout setting, and what does it say about our role in the globalization of the international economy? Given all the enormous unresolved problems facing our country, is it really good public policy to allow a handful of people in Washington, the IMF and the World Bank to attempt to manage much of the world’s economy? If the U.S. government cannot protect millions of small business people and family farmers in this country who have gone out of business in recent years, should we really be responding to every bank and business failure throughout the world?
Americans must rethink the nature of our relationship to the global economy--and our obligation to millions of needy Americans.