IMF just can't leave us alone
A rebellious impulse arises to tell Christine Lagarde to mind her own business.
Trouble is, her business is the world's business.
Lagarde is managing director of the International Monetary Fund, which lends to countries in financial trouble. U.S. taxpayers put up the most money.
And there was French native Lagarde the other day telling the United States to quit obsessing about budget deficits so much. Focus on growth and jobs, she said. And ditto for Europe's debtors.
Now Lagarde may or may not have been right. But who asked her?
The people of the United States are big enough to handle, or mishandle, their own business. Likewise the many peoples of Europe, though some have gone out of the habit of work while their welfare states have gone bust.
But that's the “global economy” for you. It's your international duty to prosper. And you get these bureaucrats without borders scolding if you don't.
Lagarde released her inner nag in advance of a policy bash of planetary proportions. The finance ministers and central bankers of the 20 major economies gathered last week in Washington. Icing on the cake for the four-star hotels came the spring meeting of the IMF's sister do-gooding World Bank, 188 nation-members.
It is gospel on such occasions that government is the tool that fine-tunes how manufacturing and job markets will go. Likewise shopping, home building, and everything else that moves in an economy.
The possibility that government mostly gets in the way does not loom large over the conference tables.
The global economy has been stubborn of late. Policy can't seem to get it humming. The IMF went so far as to lower its world forecast. Cuts in government spending will slow U.S. growth, it sniffed. And “austerity” budgets mean continued recession in the euro zone.
World Bank President Jim Yong Kim said global growth is still too weak even as a “world without poverty” has become feasible (presumably with our money). Put an “expiration date,” he said loftily, to anybody anywhere having to live dirt poor.
Lagarde unleashed some diplomacy at the clumsiness of U.S. budgeting by way of across-the-board “sequester.” Use “better quality” reductions, she advised, measures that won't delay job creation.
This possibly was a reference to how much damage our own public servants are doing with the sequester cuts they've been given.
To save a relatively few bucks — $85 billion in $3.5 trillion total spending — they're mean enough to cancel White House public tours. The furloughing of air traffic controllers that disrupts thousands of flights is in a class of spite all its own. As if there's no fat in government departments, the cuts are forced to happen uncannily close to the bone.
And yet countless government policies work against job creation even as budget stimulus aims to quicken it.
Think of the regulatory cancer that has grown over the decades, discouraging every new job: the minimum wage-setting, tax withholding and anti-discriminatory, safety and environmental hoops to jump through. And hey, Obamacare's coming, a new era of complexity. In Europe, too, it's almost impossible for companies to fire anybody.
Alas, Madame Lagarde, employers have reasons to be slow to hire.