Washington Post, Mr. Strauss-Kahn, IMF and the EuroDebt Crises

The Washington Post highlighted an article dated June 6, 2011 covering the Strauss-Kahn vs Sofitel Hotel Maid. One should restrain from commenting the case. The courts will decide on whether there are legal consequences to Mr. Strauss-Kahn's actions, and the French people will decide the political future of Mr. Strauss-Kahn.  

The human interest perspective of the article was intelligent and very refreshing. In general, the article would have been excellent had it not been for one unfortunate mishap. Early on, one reads incredulously the comment by the Post's journalist- Mr. Brad Dennis, who is following the case:

"Monday’s hearing was the latest development in a scandal that has sparked an  international media frenzy, tossed the IMF into chaos and endangered the agency’s efforts to stabilize the European debt crisis."

I have a problem appreciating that the IMF is in state of chaos and a greater problem understanding why  Mr. Strauss-Kahn's absence from the IMF should endanger the efforts to stabilize the European Crisis.

The man has been with the IMF for four years since 2007. His  presence certainly did not prevent the global financial collapse of recent years that surfaced in 2007, nor did it appease the intensity of subsequent recessions, nor contain the quasi meltdowns of Iceland and Ireland and the debt crises of Greece and Portugal. This type of hyperbole or if it's the rendition of a third-party remark should be cautioned.

One can appreciate the figurative scope of the comment had it been a Keynes or a Mr. Paul Volcker. Even then! I am certain that Mr. Strauss-Kahn does not perceive himself in the same league as the former two, nor with Messrs. Bernanke or Greenspan. Nor did he aspire to be in that league. Mr. Strauss-Kahn's ambitions were, metaphorically speaking, groomed for greener fields.

The IMF as an institution is not charismatic, and its governors do not intend that it be predicated as such.  One hesitates to think of the embarassment felt by IMF personnel when one suggests that their reputations are tied to one person. One hesitates to think of the embarassment felt by its governors when a reputable newspaper suggests that the organization they oversee is only one layer deep and just that good!

If either is the case, spare the needy the expense of a sham and close it down.

That the future of Greece, of Portugal, indeed of the Eurozone Debt-Crisis, or any other sovereign in the world should be yoked in this manner to Mr. Strauss-Kahn, is inconceivable and moreso unacceptable. Mr. Strauss-Kahn is a competent economist, and was a fine Minister of Finance; but to reduce an Institution whose global stature and mandate is so critical to the development and stability of one hundred eighty-seven countries, to one person is scandalous! Mr. Strauss-Kahn himself would disapprove the comment.

If the above turmoil and discomfort is true, that is also a scandal.  Then some overseers and regulators should have the courage and decency to step down for having failed to ensure transparency and accountability, and be replaced with competent people.

If, on the other hand, the IMF is in chaos because the incident in New York can unravel other similar disclosures, that is a governance issue of a different type. The readership requires the precision to avoid such ambiguity. 

On the succession issue: one should caution the Eurocentrism that is pervading the IMF and the World Bank. There are very good people with very good ideas beyond Europe, quite deserving of the opportunity to change things and make a difference.

This is a reprint of a posting that appeared on June 8, 2011