RSS
Using PayPal
Paul Wolfowitz Busy Neo-Conning the World Bank: Staff Rebellion Brewing
Share / Recommend - Comment - Print - Friday, Jan 20 2006, 9:33AM
Paul Wolfowitz, architect of America's failing foray into Iraq as Rumsfeld's former Deputy at the Pentagon, now heads the World Bank and finally seems like his true self is coming out of the closet.
In recent months, picking up steam in recent weeks, there has been a massive exodus of top talent from the World Bank. According to reports, the senior Ethics Officer at the Bank has departed. Also on the exit roster are the Vice President for East Asia & Pacific, the Chief Legal Counsel, the Bank's top Managing Director, the Director of Institutional Integrity (which monitors internal and external corruption), the Vice President for Environmentally and Socially Sustainable Development, and the head of ISG (Information Solutions Group).
According to one senior insider who feels as if Wolfowitz is gut-punching the most talented teams at the bank and indicated that morale is plummeting, "Wolfowitz just does not talk to his Vice Presidents. He speaks to a few close advisors -- Kevin Kellems, Robin Cleveland, Karl Jackson, some others -- but a lot of very good people are leaving."
What Wolfowitz has done that has started a serious wave of negative sentiment against him among his ranks is that he has appointed Kevin Kellems -- Vice President Cheney's former Communications Director and Spokesman -- as a "director" of the bank, which formally reports to a Vice President of the Bank -- while at the same time making him Senior Advisor to Wolfowitz.
In other words, Wolfowitz is forcing a political appointment at the "director level" of the bank -- which is never done. "Director" positions are fairly low in the World Bank bureaucracy and are filled by a competitive process and the merits of one's work -- not political imposition.
However, Wolfowitz on January 10, 2006 made Kellems Director of Strategy in the External Affairs, Communications and United Nations Affairs Vice Presidency while at the same time Senior Advisor to the President of the Bank.
In addition, the senior Bank staff are bristling at the behavior and antics of Robin Cleveland, a long-time aide to Senator Mitch McConnell who was considered by this writer to be one of the few genuinely monstrous personalities among Congressional staff. She has been shaking World Bank staff and programs on governance and anti-corruption agendas "in her normal, predictable tirade-style" according to one senior World Bank official.
The irony here is that Robin Cleveland was herself deeply involved in the Boeing tanker ethics mess. While soliciting then Secretary of the Air Force James Roche to help her brother get a job at Northrop Grumman, Roche wroter her a reply after receiving his resume:
Be well. Smile. Give tankers (Oops, did I say that? My new deal is terrific.) :) Jim.
While the Financial Times reported that Roche was found guilty of breaching defense department ethics rules, the Pentagon inspector general did not have the authority to inveestigate Robin Cleveland.
Senior bank staff see Wolfowitz withdrawing from his team and senior players -- and relying instead on a group of political zealots -- Wolfowitz's "dobermans" one staffer told TWN.
Here are some comments that have been shared with TWN this morning and yesterday:
"Wolfowitz is not talking to his VPs. He is withdrawing -- and instead using Robin Cleveland and the likes of Kevin Kellems to do his bidding, and they are building massive ill will inside the Bank.""He is appointing political hacks into positions that should be filled by highly qualified personnel through competitive and transparent processes."
"Cleveland and Wolfowitz talk about anti-corruption and good governance, but she herself was in the midst of the Boeing tanker scandal and he is appointing a hack at the director level, circumventing the VP, and making this same hack his Senior Adviser. Cleveland in particular rankles as she is the single most arrogant and abusive person at the senior level of the bank without anything to be arrogant about. She makes John Bolton look sheepish."
"Wolfowitz is Sovietizing the bank by placing his political watch dogs in key positions in the bank -- and is more interested in political symbolism than the substantive work and challenges of the Bank."
What is clear to TWN is that whatever honeymoon Paul Wolfowitz had at the World Bank -- externally and internally -- is over. ANY major bureaucracy will resist change and attempt to thwart some of the more extensive objectives of its leader. So, some of this resentment of Wolfowitz may be similar to the same kind of resistance that James Wolfensohn encountered when he was shifting things around inside the institution.
However, after having recently listened to Karl Jackson at an informal lunch where Jackson recounted his work on Indonesia and interaction with Paul Wolfowitz, with whom Jackson is very close, I have concerns about the quality of interaction between Wolfowitz and other senior level personalities in the Bank's hierarchy. I can't comment on Jackson's precise comments as they were not for attribution -- but I got a "feel" for some of the problems that others have been describing.
Jackson now serves as an advisor to Wolfowitz and is a former colleague at the Johns Hopkins/Nitze School of Advanced International Studies where Wolfowitz served as Dean. But after just mentioning the names Robin Cleveland and Kevin Kellems to a few Bank staff in phone interviews, people gushed with resentment against them and Paul Wolfowitz.
This simmering tension between Wolfowitz and his staff seems to be deeper and more serious than even the drama of staff reorganization can explain.
Wolfowitz may be showing his stripes now -- and may be finally tilting the Bank into a groove where it becomes a harsher instrument of U.S. foreign policy -- rewarding friends and punishing those who don't fall into lockstep behind George W. Bush's vision.
-- Steve Clemons
« Previous Article - Dana Priest Online at Washington Post Forum at 12:30 p.m. Today» Next Article - Washington Post White House Correspondent Jim VandeHei Gives Nice Nod to TWN. . .but More on VandeHei and Scandalmongering
Who's surprised at Wolfowitz's behavior? He runs off good talent at the bank; Bolton tries to run off good talent at the U.N. A lot of experienced talent has left the FBI, the CIA.
The next thing you know is that the U.N., the World Bank and the U.S. government is run like the Republican party when placing people in positions of power and authority -"not just any Republican, but "our" Republican."
This is just another phase and step of establishing a "global empire".
Steve, anyone who read the World's Banker by Mallaby knows the extreme resentment and anger that Jim Wolfenshon's management style engendered among bank professionals too. At some points, Mallaby describes a total meltdown of relations. But overall, Wolfenshon's tenure at the bank was pretty good bringing about needed reforms.
I don't know if Wolfowitz's is screwing things up or not. But making midlevel folks mad pretty much comes with the territory when a new management team comes in after 10 years under someone else. Styles are going to clash and people are going to leave.
Your last paragraph is the really scary part. That would be an awful fate for an important institution. The Bank needs to be credible as an INTERNATIONAL organization, and not as a tool for pursuing American policy.
If progressives form one large ad hoc union and boycott some of the major companies that give money to the Republican Party and lobby Republican representatives and senators we can make progressive legislative demands of the company CEOs or they lose our business and our money.
I suggest people write congress and demand a progressive agenda and tell your representatives that unless they increase the minimum wage, pass universal health care, pass vote by mail with paper ballots counted by civil servants throughout the US and other progressive legislation, you will boycott companies like Wendy's restaurants, Outback Steakhouse and other hard core Republican contributors.
I would also suggest people look at websites like buyblue.org and boycott-republicans.com which advocate boycotting companies that give money to the Republican Party and then demanding that these CEOs go to the Republican Party and get the legislation that we progressives want.
Gee I am shocked...the PNAC plan was the demon seed for "Neocon Federation' across US government agencies ( with DOD, CIA, State Dept at top ), agencies like World Bank, corporations like Carlyle Group.
And except for a very small percantage of informed Americans ( like on this blog ) that can see through this ruse the Forth Estate is runningt a great cover operation for these Neocon bastards.
Matthews is a sterling example of Howard Dean's point when he said: "I think the press in general is a failed institution in this country. For two reasons...the biggest problem with the media is first that 90 percent of Americans get their news from eleven corporations so that the loyalty in the editorial staff and higher up is principally to the shareholders rather than to the public. And the second problem is that entertainment has supplanted news value."
And the more threatened the Bush/Cheney admin is the more they get their media shills to spew even more meaningless drivel to keep the large populace of uninformed Americans 'dumb downed'
It's sickening !
Steve -
In light of the positioning of mid-level political appointees in the world bank, you might find my Middle East Policy article "Lessons from Walmart and the Wehrmacht: Team Wolfowitz on Administration in the Information Age" interesting. It's available at
http://www.mepc.org/public_asp/journal_vol11/0406_hudson.asp
This is OT, but CSpan is covering the Democratic hearings on Bush's domestic spying.
Get a load of what conservative Republican Jonathon Turley is saying!
Prof. Turley:
"I don't see how you can argue this does not violate the statute.
"You (Congressmen) are obligated to hold hearings if the President asserts that his power is beyond the restrictions of a statute."
Nadler: "Is it an unconstitutional encroachment on liberty."
Turley: "This is a textbook example of an impeachment issue. When the President held up his hand and took an oath to God that he would uphold the Constitution, he was promising to uphold separation of powers."
AND
Bruce Fein (former Dep'y AG during Reagan Admin): I came to the Justice Department at the time of Archibold Cox's discharge [Watergate, discharge of Special Prosecutor]. Attorney General Richardson resigned [rather than fire the Special Prosecutor]; William Ruckelshaus resigned.... That is what you do when you believe the law is being violated. I think that attorneys in the Justice Department must resign.
Steve, If you read my email yesterday there was a suggestion. Fein's statement ties in with this perfectly. No honest man can serve Bush anymore.
There is no moral corner left to hide.
I'm in and out of the Bank all the time on consultancies, attending rountables, brownbags etc.
I talk with the upper-mid and lower-upper Bank Staff on a continuous basis, and virtually all of them say (at least) what Steve has said. Some are considerably more vitriolic.
Interestingly, American professional staff in the Bank (who are a minority) are usually more blunt in their criticisms than European and other non-US staff. Asian bank staff normally refrain from political comments, but the Europeans sometimes give off a sense that "this is what we knew would happen, so what is there to talk about?.
I imagine that many TWN readers don't really care too much about internecine stuff at the World Bank, but for those who do care....... you should heed Steve's warning. There's trouble brewing.
JohnStuart
Question: why do we even have a World Bank? I don't think it is something that 99.5% of Americans would want to put US money into. Who cares if a staff rebellion is in the makes there? So what. Fire them. Leave. If we are going to fund that wretched organization, it ought to be a complete tool of a nationalist, right-wing U.S. foreign policy.
Do you think the average American pines away at night over the travails of frustrated, anti-US, left wing bureaucrats? I don't. Maybe they can go do something more productive for a living like pick up cans on the side of the road.
Also, I noticed that the new Liberian president, Johnson-Sirleaf and several of her new cabinet ministers are from The World Bank.
Wouldn't it be shrewd to try and get a jump on securing MNC (particularly, AMERICAN MNC) rights of exploitation of African countries a century before everyone else?
SC's ill thought out Neville Chamberlainesque entry the other day about good people in the Bush administration got him mentioned on Daily Kos. It is not a flattering mention and mirrors the sentiment of most of the comments he got from those of us who read here regularly and cared enough to respond.
From Daily Kos:
"Responsible bloggers" like Kevin Drum, and Steve Clemons (who wrote that Harry Reid was being too partisan on the Abramoff scandal), and the folks at The New Republic who think the Left blogs are too mean to the Media, still live in a cocoon of denial of the centrality of the Media to the problem."
When criminals are robbing a bank do the police seek to find common ground with them and open a dialogue? No. And likewise real "responsible bloggers" should not seek to do anything but oppose with all their being the dismantling and looting of our republic.
This is not a suprise to anyone it was the Bush plan all along. Wolfowitz is doing Bush and Company's bidding. He's just another unqualified appointee. I just hope none of his employees shake his hand the man is dirty and who knows what sickness you will get. Look Bush wants to control the world what better place then the UN. He buts dumb people in jobs that he can dictate to him. Now we all know from George Bush's speeches that his not the brains behind the mass corruption of the US government. As usual evil will fail thats right the US will lose this too. I guess Hillary Clinton said it best history will show that this President is the worse/dumbest/corrupt/liar/racis of all our US Presidents.
Name one policy driven person of any philosophical stripe that isn't interested in shaping an agenda and you have found one amazingly adept policy wonk.
We need to first start from the accepted idea that anyone with a considerably different world view than our own becomes suspect of some nefarious actions.
If we want to be honest to ourselves at least.
Saying that they are damaging an organizations reputation for fairness or respectability obviously becomes an extension of the disagreement over what we believe the focus of the organization should be.
Does that make the person evil? Will Armageddon occur? We really need to stop with the hystrionics.
The World Bank's history of giving money out is clear and accurate. The true effectiveness of all that giving is extremely debatable.
Senior staff are either the kiss ups that steared clear of getting fired, or ideological twins of the last power position to run the World Bank.
They are not to be lionized merely because you disagree with the new power position.
Ronny -- Thanks for posting the DailyKos mention. I like Kos a lot -- but our blogs and approaches are different. I'm going to engage those whom I think are worth engaging -- and I'm going to seek to divide reasonable conservatives from unreasonable ones. To win any of these policy battles, some conservatively leaning independents and independent-minded Republicans will have to join reasonable progressives. That is not Kos's strategy, which I also respect -- but which is not what I'm about. Best, Steve Clemons
The bottom line at the World Bank, like the IMF, and exactly like the private central back we refer to as the 'federal reserve,' and use their money in everyday life, is a corporate tool in the drive for global domination. It doesn't make any difference who runs any of the above organizations, unless your name is 'Andrew Jackson' and carries the same level of awareness. Under various levels of deceptions, the above organizations lend money with zero reserves other than verbal backing of their political servants that most of us call our political 'leaders,' aka, the government. They do what most of us have to work for; that is, they make a lot of money from nothing. However, worse is that the countries that borrow the money, being stupid, but trying to survive politically, no matter what their political theory may be (republic, dictatorship, socialist,) force their citizens to carry long term debt loans. The corporations obtain easy wealth and the foreign politicians remain in power. The central banks use the basic nature of man, pure evil, for profit.
If any puppet government of our corporate lords act up by trying to pay off their debt, they have their servants, the US Military, decapitate the rebellious rogues, or kick their asses using various corporate strategies also proven.
There are no 'good men' running these corporate tools of domination, just a bunch of effete asses of the same ilk as our girlie lawyers, all trying to re-invent monarchy within the deceptive sheeps wool of 'democracy.' I suspect these bankers place the word, 'esquire,' after their names on their gold-embossed business cards, if only because their fellow criminals, the corporate servants we call 'lawyers' love the expression not as a ‘courtesy,’ but as a corporate shield bearer in the true feudal style.
Just crap; meanwhile, our media, also corporate demi-gods, maintain the horrendous load of re-cycled material that continues the situation while pacifying our airhead voters.
Steve, I assume your allergy to partisanship arises from thinking that you can't be an effective agent for change from a partisan position. I don't think you can be an effective agent for change unless you operate within an environment in which change is feasible. So long as Republicans control the government, that environment simply won't exist.
I rely on your blog for what you're providing in this post, which is inside information about the climate in institutions and bureaucracies to which most of us don't have access. It's valuable stuff. But ...
But I cannot understand why you would give the benefit of the doubt to people such as Wolfowitz and Bolton when they migrate to new positions. They've already gotten, during the past five years of the Bush administration, the benefit of whatever doubts anyone may have had. Regardless their new titles, they're continuing the policies and practices, including the cronyism you note with Wolfowitz, that distinguished them in their previous jobs.
Rice is a case in point. She may be less shrill now that she's at State, but she is continuing to promote the policies she supported and helped develop when she was undercutting Powell from her position at the NSC.
As I'm sure you know, the EU parliament is about to launch an investigation into CIA "extraordinary rendition" operations conducted in Europe. Do you suppose Rice will cooperate with that? or will she continue the practice of threatening, bullying and belittling anyone who questions what has become an official US policy of violating human rights and domestic and international law as the White House see fit? I'm pretty sure I know the answer.
Regardless the occasional appearance of a Republican with an ex post facto conscience — which I agree is better than no conscience at all, ever — the Republicans who remain in office are deeply, irretrievably corrupt.
John Dean is famous for his "cancer growing on the presidency" comment to Nixon regarding Watergate; now, we're faced with a Republican government that is a cancer growing on America. If you're to accomplish anything, they have to go. And they're not going to go absent a fierce, partisan attack that makes clear to voters the extent to which this crop of Republicans have degraded the country and democracy.
Partisanship is not a bad thing: it's fundamentally the product of an argument over what's the best course for this country. It's the cornerstone of democracy. Democrats who behave like Republicans with smiley faces — and I'm not referring to you, now; just people like Lieberman and the large majority of Democratic "strategists" such as inhabit the Democratic "Leadership" Council, who either validate or are afraid to challenge destructive White House policies and behaviors — are not having and will never have a positive transformative effect on Republicans so long as the latter remain in power.
You're a reasonable guy. They're not. You cannot reason with unreasonable people. You can only force them into a position where their disabilities no longer affect the rest of us. And in order to do that, one has to take a stand.
In case you missed it, the link from Leila Hudson, 12:16 pm post, was very interesting.
http://www.mepc.org/public_asp/journal_vol11/0406_hudson.asp
Isn't it just reassuring to watch a dyed in the wool war criminal at work? It IS reassuring to watch. Wolfy is pulling the exact same crap that has become the hallmark in trade of the entire Bush gang of forty war criminals. Bolton at the U.N., Brown at FEMA and that would be pre-ethnic cleansing of New Orleans, and say Gayle Norton at Interior. Criminals at work and play. America will never ever be the same. Nor will our world but, that was their plan all along wasn't it?
Maybe the World Bank will collapse and Wolfowitz with it and billions of dollars of blood-money wrung from the bodies and souls of third world people will go uncollected?
Wishful thinking.
Does Paul Wolfowitz really have the competence to run the World Bank himself, ideological issues aside? Whatever you want to say about Wolfensohn,
he had a background which made him suitable for the job. Can the same be said of Wolfowitz?
Isn't he himself a hack political appointee? Has the World Bank had similar heads in the past? I don't know.. i'm just asking.
Heck uv a job, Wolfie????
Everything they touch turns to shit. Geez. Don't you just hate these people.
Weldon Berger,
AAAAmen and then some!!!!
Thanxxxxx, Could not have said it better.
The Bush administration and anyone having current and past association with it is like a plague. Wherever they go, when they get into power, they ultimately drive off the vital people then lay waste to the remnants, like strip mining or clearcut logging. Once the best parts have been used or destroyed, the rest crumbles into decay. They're almost like the Martians in H.G. Wells "War of the Worlds", coming into a thriving environment, convert it to their own model and leave it in degradation. Maybe this is another version of the "Shrink government so it can be drowned in the Bathtub". Cut the World Bank down to an uninfluential size so it cannot control.
I remember when Wolfowitz was first appointed to head the World Bank. The sort of official "buzz" was that he was a bit tired of the 24/7 pace at the White House and needed to spend the last of his good years "doing good for the world." I swear! "Yea, right," I thought at the time. Another part of me thought, "There's hope for us all. People can truly change through the wisdom of years."
Your post, Steve, has confirmed that I should have stayed a cynic. However, your "benefit of the doubt at the beginning" stance is still the best one to take. Don't give it up. You can't do your work as a cynic. One of the reasons I stay connected to this blog is so that cynicism will not win.
I hope I'm not being anti-Semetic, but ex-US defence department analyst Larry Franklin is jailed for over 12 years for passing secret information to Israel. I'm not telling this because you're piling on Wolfowitz and I'm just piling on. This is a true story. If I've offended anyone by mentioning this, I had no intentions of doing your people any harm, only reporting some news of the day. Take care.
Marky asks:"Does Paul Wolfowitz really have the competence to run the World Bank himself, ideological issues aside?"
The short answer is yes. He doesn't have all the skills one might want in the "perfect" Bank pres, but no prior Bank pres has met that test.
Running the Bank takes brains, the ability to handle smart technocrats, the ability to manage a large organization, financial savvy, an ability to manage the Bank's largest stockholder (us); and a range of diplomatic skills.
Paul has lots of brains. He also knows how to manage multiple intellecutal agendas with lots of smart technocrats.
He is not good at large-organization management and he is not particularly knowledgeable in the realm of finance (where he will necessarily rely on Bank technocrats).
He knows a lot about managing the principal shareholder - especially when a Republican administration is in charge.
It may surprise you to hear it, but Paul is quite skilled on the diplomatic front. His years as the Assistant Secretary for Asia and later as Ambassador to Indonesia gave him quite a good set of cards in that domain.
His biggest achilles heel will be management. He is about as far from Jack Welch (or name your favorite big-time corp manager) as you can get.
His second biggest achilles heel (this metaphor is begining to fray, I'm afraid) is ideology.
Despite being both innately smart and well-educated, Paul gravitates towards one end of the spectrum when it comes to interpreting international affairs. He is comfortable with folks who tend to do the same.
In the area of personal matters, he has terrible judgement. At SAIS he had affairs that every little MA student knew about and that drove the faculty into a nervous frenzy. He brought some of that with him into the Bank and has not yet learned how to be discreet and wise in the personal domain. This habit has cost him in the past and will cost him dearly inside the Bank.
When Paul Wolfowitz' term runs out I suspect that he will be judged to have earned about a B (maybe a B+) as Bank President.
But you can be sure that the professional staff will be glad to see the last of him ----- just as they were glad to see the last of Wolfensohn.
JohnStuart
Third World development is obviously a complex & multifaceted problem. WB is part of the response. But it can be argued that it is not a large part of the solution. There are anti-development forces that are beyond the control of the West; there are anti-development forces that are not on the table & rarely discussed. I despise Wolfowitz as much as the next guy, but we're safer with him at WB. Nothing he can do at WB can hurt us (or the world) as much as what he already has done in the Administration.
John Stuart,
Thanks for your answer. I certainly don't think Wolfowitz is stupid, but I was wondering in particular about his background in the financial world. You say that he is not an expert in finance, which is what I thought.
I'm not a believer in the "rely on experts" school of management---George Bush has thoroughly disechanted me with that philosophy.
My own opinions aside, I still would like to know if there have been comparable appointments to the World Bank of people without a strong background in finance. For comparison, if someone like Wolfowitz were nominated as the Federal Reserve Chairman, I assume that markets would react very unfavorably.
No accident that they screwed up FEMA and Medicare, wanted to screw up Social Security, and are now trying to screw up the world bank and the UN. These programs/organizations are all hated by the right wing.
Steve, please just reread Jude Wanniski`s Memo
obtainable here - all the rest is no surprise at all:
http://www.studien-von-zeitfragen.net/Zeitfragen/Wolfowitz_Banker/wolfowitz_banker.html
Best regards
Peter
"Wolfowitz may be showing his stripes now -- and may be finally tilting the Bank into a groove where it becomes a harsher instrument of U.S. foreign policy -- rewarding friends and punishing those who don't fall into lockstep behind George W. Bush's vision."
The images that comes to mind are those of fascist and communist dictators striving to build an empire.
www.healthcare-now.org
U.S says Venezuela Overspending on Military
Fri Jan 20, 3:56 PM ET
WASHINGTON - Venezuela is planning a "buying spree" for military equipment that goes beyond the
country's legitimate needs, the State Department said Friday.
http://news.yahoo.com/s/ap/20060120/ap_on_go_ca_st_pe/us_venezuela_1
The US spends $500B/yr. on defense and maddog Cheney and Dumbsfeld want more.
Would CondiLiza Rice say same to China or Russia ? How about the UK ? Oh it fine for them because dog poodle Tony Blair is firmly in the NeoCon camp and looking to join Carlyle Group for his next 'career move'.
The hypocrisy from these motherfucker NeoCons is sickening !
Steve,
I don't find anything in your post besides the usual water cooler grumbling about new management at a large institution: complaints about the new guy's "management style", about his supposed over-reliance on his own people, about his failures to listen to the old guard, and about the tendency of him and his staff to step on on the toes of entrenched ego and give them the back of his hand.
I would be much more interested in learning about policy differences at the World bank under the new regime. What is Wolfowitz trying to accomplish? How does his agenda at the World Bank differ from that of his predecessors? What difference does it make to the world whether Wolfowitz or someone else runs the World bank?
This is very disturbing news. It's bad enough that moron bush puts everyone in ofc he owes a political favor to and their 2nd cousin.. but the positions of power these people get, and now the supreme court. It's like a damn scary nightmare what is happening to this country. By the way Al Sharpton and Hillary Clinton did not coin the phrase 'worst president in our history', because I've been saying it for over a year now, at least a year.
Most corrupt, inept, arrogant, and dangerous too.
.
This Small Group of NeoCons Must Be Stoped
Their Ideas 4 Earth Citizens are...
Everything 4 A Very Few
...and
A Very, Very, Very Little 4 Most of Us.
Money, Money, Money, Is the Answer 4 Everything...
Well ECs ( Earth Citizens ) there is another way 2 live on planet Earth.
ck it out at...
http://www.OneGlobalCommunity.com
Thank U, Roger Drowne EC
.
Didja notice?
Steve used the word "monstrous" to modify "personality."
Could it be a surprise that Mitch McConnell spawned a protege with such sparkling management and interpersonal skills. Would love to see Cleveland in action.
Amazing though, how accurately this turn events was predicted by many posters on this and other blogs when news of Wolfowitless's (forgive me Steve) appointment to the World Bank was announced.
By the way Steve, I wouldn't worry too much about bad reviews from the likes of the Daily Kos. DK is a juvenile sty of intellectual vacuity and mindless political hackery. It's content is barely worth the click of a mouse.
Marky asks:"I still would like to know if there have been comparable appointments to the World Bank of people without a strong background in finance. For comparison, if someone like Wolfowitz were nominated as the Federal Reserve Chairman, I assume that markets would react very unfavorably."
Again the short answer is yes. More than half of the prior Bank presidents lacked serious experience in the financial sector. This might sound alarming - because of the word "Bank" in the organization's title.
But the Bank really isn't a "bank". It is a money-and-advice dispensing organization that does not run on bankerly principles.
By international tradition (unwritten), the IMF is supposed to be run by a finance type (who by convention will also be a European) and the Bank is run by a generalist (who by convention will be an American).
This hasn't worked too badly in the past. Since the Bank doesn't raise its core capital in the world's financial markets (it raises its core capital by the high art of "begging" from its stockholder nations), the leader's financial stature is not so significant.
On the policy side, so far, Paul has not departed greatly from the policies of his predecessor, Wolfensohn.
The earlier "Wolf" shifted internal Bank priorities away from infrastructure and capital-project financings towards "poverty alleviation".
There are some real conceptual limits to the amount of "poverty alleviation" that can be achieved with low-interest loans to governments (the bank's primary instrument), but Wolf#1 made some genuine headway in that direction.
To date, Wolf #2 has put his name behind the basic Wolf #1 agenda.
Will he stick to it? It's hard to say. The Bank's rather tepid past programming in what they call "governance" (a sort of non partisan version of democracy/accountability/transparency) is where the Bank staff anticipate an agressive move from Paul Wolfowitz.
The staff theory is that he will beef up governance to make it look more like Bush 43 democracy promotion. His Middle Eastern girlfriend is a big fan of this approach.
But, to be fair, he hasn't actually done this.
Will he in the future? Is he keeping his powder dry until he gets a better lock on senior management positions?
Time will tell. This may have something to do with his moves to install like-minded American cronies in some key positions.
Steve's alert was just that - a flag that something is coming down the pike. I don't think that we can tell just what that "something" is yet, but given Paul's drive, ideological zeal and ambition, I would bet that it won't be somthing minor.
JohnStuart
Tell the speaker of the house you want a better prescription drug benefit.
Click on this link to send the speaker of the house a message that you want a better prescription drug benefit.
.
Thank you for tracking this business-suited madman's further career and misdeeds -- looks like you have managed to scoop every newspaper in the country by simply being a vigilant, outside observer. Well don, Steve.
Interesting ...
I'm a former long-time Bank staffer. Like a number of respondents I agree that the overall mission of the Bank was to contain Communism and has been more lately to use debt as a tool of domination.
What many of the like-minded folk don't seem to think, and what I believe is true, is that this political agenda is very closely held in the Bank. Which means that working there ... and I did for a very long time ... you will mostly encounter well-intentioned and intelligent persons who are genuinely interested in the benefit of the poor and dispossessed. There is a sizeable gulf between those who know the mission and those who effect it.
And ... embarrassing but true ... I have no first hand knowledge of anyone who knew the mission. I worked with and alongside many senior staff, up to and including Wolfie I (Jim Wolfensohn) and to a person they were either well-intentioned, badly intentioned in the usual ambitious way of overprivileged elites, or just putting in time.
I've come to believe the claims of overall ill about the Bank mission much in the way that scientists discovered the existence of Pluto ... by reasoning backwards from effects. I believe this to be significant ... if I'm not simply mistaken about the Bank's mission being to essentially enslave by debt then the mission is effected by a very light touch, and probably a certain amount of good is done along the way. Not arguing that the good outweighs the ill, just that there has to be enough humanitarian mission to keep folks like me working there.
There's a subtext ... the Bank provides employment for the third sons and daughters, the emotionally ill unemployable children, and the exiles of the third world's power elites. That addresses the Surleaf script (exiles, no insult intended) and is interesting but probably not germane.
OK, all that said, the senior staff at the bank are, IMHO, generally honest and well intentioned, if somewhat deluded privileged bureaucrats. They come in as selected "YP's" -- young professionals in a special fast-track recruitment program, rise through the ranks based on non-nefarious everyday work, and either flunk out, rise to positions of incredible comfort and power, or go home to be finance ministers. Simplified but generally true.
***For these folks to leave is genuinely significant.***
Bet you wondered if I'd *ever* get to the point!
You're describing an exodus of the incredibly privileged, who live as cushioned exiles in a country generally far richer than their own, with a very large tax-free (except for US citizens) salary, a dedicated service economy in the form of international schools and other institutions dedicated to their comfort, access to the perquisites of power, and employment nearly for life.
It takes a lot for folks like that to pick up and leave to a situation almost certainly worse. They outwaited Conable, and Preston, wore Wolfie I down pretty well (he wasn't a bad fellow in my view, but again I digress), and I fully expected they'd eat Wolfie II for breakfast.
If he's eating them this signals a new, and unknown dynamic in the role of the Bank. More forceful intervention? The velvet glove comes off? Comfortable deniability broken? I could not say. But it is definitely **not** business as usual. It would take a political H Bomb to move the likes of an IBRD director.
BankNoMore --
I was VERY interested to note recently that the President(?) of Argentina had scored big political points by .... buying out that country's debt, owed to the IMF.
Argentina took out huge loans in the late 1980s. You all know what bad shape their economy was in a scant few years ago.
Thing is, he PAID EXTRA in order to rid his country of this kind of "help." Curious. He didn't go the cheapest route -- as any economist will assert is more "rational," and supposedly inevitably describes/governs human decision making.
He bought out not so much the debt itself, as the strings attached to it. Sovereignty, you know. Worthwhile concept, and priceless, really, so no matter how you look at it, he got a very good deal.
From the kvetching in the article, it was plain that opponents as well as supporters saw it as a very, very shrewd move, one that would pay off in the form of political dividends as well as economic gain.
I can just imagine the folks at the Bank learning that an architect of Bush's biggest failure has landed on his feet among them. Can't you just picture his first staff meeting?
John Stuart and Banknomore
Thanks for your comments. I'm glad that Steve's post gave an opportunity for this discussion
Banknomore, thanks for the information about our airhead yuppies with business degrees with a whole lot of ego-drive deluded as to the real mission of the central financial organizations that not only instruct DC on policy matters, but make whatever cabal gain or lose strength. The delusion is culture wide; a three dimensional matrix of deception. Young people don’t stand a chance.
RichF, I looked at the current Argentine situation concerning the payoff of the IMF loan. Their recent history the past few years has been in upheaval because the Argentine government servants were being punished by our corp guys for something: end result is that they couldn’t get more money. Some local ass started doing the impossible to pay the interest on the loan resulting in massive social problems and various change of governments. There is no way they suddenly found the ‘cash reserves’ to pay off the IMF; the IMF simply re-negotiated when they got their own effete boys in appointed positions. (I suspect that oil reserves may be connected, but this is not confirmed.) The local idiots probably dreamed up the ‘payoff’ statement to simply make themselves look good and to stem further social unrest of the working people. Brazil probably did the same with the IMF, but I haven’t confirmed.
Banknomore, I suspect that there are a few more young Latin Yuppies in the big corps hallowed halls these days.
Also, it simply does not matter who runs the corp, the policies of corporation business were laid 100 years ago. The only importance is for the regional figureheads to tweak corporate research tanks paper chase into policy corrections that depend upon current events; mostly personalities, etc. There is no ‘neo-con,’ or ‘liberal,’ these guys are on the same team, and they don’t care who gets hurt as long as it’s not their own blood spilling on their shoes.
scout --
Below is the NYTs Archive synopsis of a much more detailed and very informative piece recounting the political windfall -- ripe for the plucking -- that comes with eliminating the supposed "obligations" of sovereign nations (with primary, higher obligations) to creditors.
And that's perfectly understandable. After what Argentina went through -- a debt-prompted economic collapse and the ensuing creditor-driven stranglehold bent on driving a forced restructuring (perhaps crudely put) -- it's no wonder Argentinian citizens enthusiastically greeted Kirchner's very rational move.
Paying more to eliminate the debt now may seem like a more expensive and unaffordable way to go.
But the payoff is priceless. Priceless in terms of national sovereignty, which should never be compromised, and never for the sake of debt held abroad. Self-governance, especially in the economic arena, can never be bought and sold --
And in the grand scheme, client states are not the biggest loser in such an exchange.
Check out the whole article -- I don't have time to dig it up.
World Briefing | Americas: Argentina: Foreign Debt Paid Off
By LARRY ROHTER (NYT)
Published: January 4, 2006
With a transfer of nearly $10 billion, President Néstor Kirchner has paid off the last of his country's obligations to the International Monetary Fund and is now free to pursue economic policies more to his own liking. His supporters celebrated by releasing balloons, but some left-wing groups demonstrated against the action, arguing that Mr. Kirchner should have spent the money on social programs. Some economists were also critical, saying it was ill advised to spend more than a third of the country's approximately $28 billion in foreign currency reserves on what they regard as a political gesture. LARRY ROHTER (NYT)
Hmmmm, if overpowering foreign debt equals loss of national sovereignty, what does it mean that the bulk of the growing US debt is held by the House of Saud and China?
When will the bill come due? Is it being paid as we speak
this dirtbag wolfowits is a top zionist for his isreal handlers,its time for this country to kick these dirtbag traitors out of the country,since all these neocons are duel citizens of isreal they should move thier instaed of calling themselves americans,they are not americans by a longshot time run these traitors out of the country and start with bush and dickhead chany,we havenever seen bigger traitors then these slimeballs.
RichF, thanks; however, folk like Larry simply are not credible sources. Indeed, like the under-educated youngsters that enter the world-halls-of-corp-gods, he is merely another layer of deception. Indeed, look at Miller and the now totally degraded Woodward, both on the now outed CIA misinformation payroll.
Of course the corps are the true sovereigns; that’s the point. Banknomore, yes, the Asians and the Saudi’s, ad nauseam, pay the debt of the US govt., but it’s not the actual governments, it the same damn corporations. You must kick up your level of abstract thinking. Why do you think that China has suddenly entered the world scene as a key player? Because our financial corp guys were allowed to set up business over there, selling credit backed up by their new host governments while the corps insist on whatever gold and other natural resources as collateral. Soon they will have the Asians without gold, just as the Fed Reserve, a private central bank, has control of all the gold that is, or was, at Ft. Knox.
With the world peak oil situation, the corps are merely slightly tweaking acquisition toward oil, which will soon become far more valuable than gold and diamonds. Our crone women will soon be wearing oily necklaces to show how sexy they are; do you see? This is not rocket science.
Rich, Argentina doesn’t have ‘cash reserves,’ because they ain’t got nothing backing it up. The central banks simply used their power to tweak the Argentine govt. into the correct direction, and re-negotiated at the appointed time. This is why I suspect oil reserves are involved. These guys have been around for 100 years; a few of our political leaders after WWI tried to stop them, but our majority tyranny of voters can’t think beyond television, movies, porn, pizza, porn, hamburgers…you get the point. Universal suffrage works well for these guys because our basic nature is evil. It has taken be a lifetime of being hit over the head, but the Bible is correct about a lot of stuff.
The social delusion is very apparent in looking at the level of ‘elected’ leaders on the intelligence awareness scale as we get closer to present time. Andrew Jackson, as silly as he was, understood why the central bank system was too powerful, just as our business leaders feared the Bank of England during colonial times, (they invented their own script to counter England with its accompanying credit schemes). What our corp cabals are doing is the same as during the 18th century, but total suffrage democracy has accelerated their global domination of natural resources and the ability to gain control of nominally sovereign nations.
Thanks again
Steve:
A good post, but with some occasional misinformation in the comments ...
In fact, most of the recent Presidents of the WB have had significant financial market experience (Clausen, BofA; Preston and Wolfensohn, investment bankers) and McNamara managed a large business before becoming SecDef. The exception in the 36 years before PW was Barber Conable, who was a lawyer and a Congressman.
The WB does raise much of its core loanable funds in world markets. It does so by selling IBRD bonds. It re-lends the proceeds of the bond sales to middle-income countries, such as Mexico and Turkey, taking a small markup (25 basis points or so) in the process. (Wolfensohn was once asked if IBRD could be split off from the other four parts (IDA, IFC, MIGA, ICSID) of the WBG; his answer -- "IBRD is the Bank"). The WBG does receive donations from shareholders for the IDA part of its portfolio, which provides subsidized credits to poor countries. Recent statements from representatives of EU shareholders about channeling money through European mechanisms would be a serious threat to IDA.
Of course the WB runs on bankerly principles, notably that it must be financially sustainable from the point of view of its public shareholders. The latest example of this is the HIPC initiative. In 2005, the G8 countries decided to provide full debt relief to some of the HIPC countries, including on IDA debt. IDA then had two broad options to pay for its contribution to this expanded debt relief (which is analogous to a commercial bank writing off much of its portfolio): (a) it could ask its shareholders to make up the difference; or (b) it could reduce its new portfolio in proportion to the foregone repayments. The first option required more donor money and the second option implied a substantial contraction in new IDA credits to poor countries. JW and PW were able to secure shareholder financing for the first option.
Perhaps I am reading too much into this thread, but I infer that most of the posters do not really understand the constraints on the behavior of the WB’s President. The part (about half) of WBG money that goes to middle-income countries is a market process. Either countries want to borrow from the WB at a very small discount compared to world capital markets or they want to forego the discount and borrow in the market. There is little that PW or JW can do about that; all they can do is wait for a rise in world interest rates or some exceptional event (the Asian crisis of 1998 or the tsunami of 2004) which make IBRD loans (temporarily) more attractive. (“Temporarily”, because while new IBRD loans rose during the Asian crisis they quickly fell after the crisis). Hence, if the President of the WB tries to use IBRD money too aggressively as a lever (say for better governance) then all he will do is drive the putative borrowers away from the WB and to the market. The WB does have much more leverage with IDA countries, which have little or no access to capital markets, but even in those countries, because of the formulaic way in which IDA money is allocated, the WB’s leverage is more limited than one might think.
Dan Kervick is right to say that the interesting questions concern policy differences. What will PW do about such problems as : (i) the financial structure of IDA (see above); (ii) the declining amounts of IBRD loans in real terms and relative to world capital flows; (iii) the intellectual contribution of the Bank to issues (e.g., the trade negotiations, climate change, post-conflict countries, women’s health, HIV/AIDS, extractive resources, conflicts over water) to which certain shareholders are sensitive ? (iv) IDA priorities – health and education or infrastructure? Though I won’t say anything about the personalities, it is easy to see that doing the right thing about those problems will involve consulting more than 3 people in the inner circle.
BankNoMOre - I couldn't agree more re the price that's being paid, right now.
scout -- I don't claim that Larry Rohter has all the answers or the whole story. But I do think it's essential you respond to the substance of the article. Read the whole thing.
Rohter may suffer from the same flaws as many NYTs reporters. However, absent some substantive info indicating otherwise, I don't believe you can dismiss the substance of the reporting. I know Argentina's been busted and is likely broke. So What if they did come up with "cash reserves" by accessing oil reserves?
As you yourself pointed out, oil is just another form of money.
I don't disagree with you, and on a number of points. But that does NOT mean that the gist of my posts weren't accurate. And the same for Rohter's reporting.
It's clearly a bold and wise political move to pay "more" to eliminate foreign-held debt -- a debt held by govts and non-govt'l agencies that have abused their own obligations to respect national sovereignty -- even as they have damaged Argentina's democracy and crippled its national economy.
In short, the payment only SEEMS too high because it is not the debt that is being purchased -- it is the sovereignty. And however deeply that was in hock, it's priceless, and though literally and by definition not a steal, it was an incredibly astute move.
So, scout, I want to know what you think. But specifically about the substance of that whole article, not these vague side issues.
Thx,
R
The Bank board could fire the Presidnet and redo the agreement that has the board accepting the US candidate.
the bank really is a bank, and sells bonds and lends usually at about one percent more. It is a complicated story. I wrote a paper about it, after being a consultant, which I presented at the American Anthropological Association in 1980. People at the Bank still call me up to tell me how accurate it still is.
http://doug.pbwiki.com/WorldBank
The VP's are more intrested in lending targets than development, which follows from the nature of their job, which is to lend money. Bank staff write reports on development, but usually to justify what the lending requires.
Reader Comments (54) - post a comment