The Neoliberal Ways Of The World Bank May Be Numbered If Jeffrey Sachs Becomes Its President
When World Bank President Robert Zoellick announced that he would step down at the end of his five-year term in June, calls were made for his successor to be selected based on merit this time, rather than on nationality, as has been the custom for the past 68 years.
Whereas the International Monetary Fund’s Managing Director has always been a European, the World Bank’s President has always been an American. Though the U.S. is indeed the institution’s biggest funder and largest shareholder, its finances are paid by taxpayers around the world.
The moment Zoellick made his announcement last January, the Obama Administration indicated it had every intention of inserting an American as the new President. At a briefing on Feb. 21 , State Dept. Spokesperson Victoria Nuland stated, “Our expectation is that we will nominate a strong American candidate and we will put our full backing behind that person.”
After Nuland ruled out Secretary of State Hillary Clinton as a possible successor, several other top contenders’ names have been floated around.
These include Former Obama Economic Adviser and former U.S. Treasury Secretary Lawrence Summers, U.S. Ambassador to the U.N. Susan Rice (who has also been rumored to be Clinton’s likely replacement as Secretary of State), PepsiCo Inc CEO Indra Nooyi, and Sen. John Kerry (note: his spokesperson said he was not interested, and had never even been contacted about it).
If Rice does in fact have her eyes on State, this would leave Summers and Nooyi as two ‘short-listed’ contenders. The Chicago Tribune listed the pros and cons of Summers and Nooyi:
Sources within the World Bank and the Obama administration said that while Summers has excellent credentials, he also has political baggage.
While president of Harvard University, he created a firestorm by suggesting women may have a lower aptitude for science and engineering. He is also remembered for a memo he wrote in 1991 when he was the World Bank’s top economist that laid out the economic logic of dumping toxic waste in developing countries.
By selecting Summers, Obama “would have to use political capital” with his liberal base and women’s groups, the source with knowledge of the administration’s thinking said.
Nooyi, the Indian-born chief executive of PepsiCo, has been under pressure from investors for a stagnating stock price. She recently laid out a plan to turn around the company’s North American soft drink business and took responsibility for management missteps. PepsiCo spokesman Peter Land declined to comment on whether she would be interested in the World Bank job.
If Obama chose a woman, he would be breaking the mold for a job that has always been held by a white male, a move that could garner support from developing nations.
But as the White House vets its candidates, it is facing international pressure to democratize the selection process. The fastest emerging economies, including China, Russia, India, Brazil, and S. Africa have coalesced to end this 70 year old passport-as-determining-factor tradition.
They were so appalled at how Europe arrogantly moved to replace the IMF head last year with one of its own, despite pleas to open the process, that they have responded more forcefully this time with Zoellick’s announcement. They have every intention of nominating some stellar candidates of their own to fill the impending vacancy.
Well, one American Economist, Jeffrey Sachs, who is director of the Earth Institute at Columbia University and serves as Adviser to U.N. Secretary General Ban Ki-moon, has helped to make this a true contest. He has thrown his hat into the ring, albeit his nomination didn’t come from the U.S. He has been nominated by Kenya, Malaysia, Jordan, Namibia, Bhutan and East Timor.
And in stark contrast to outgoing President (Bush-appointee) Zoellick, who had been a former Managing Dir. of Goldman Sachs, Jeffrey Sachs considers ‘Neoliberal’ a dirty word (as demonstrated by his Tweeted response to one critic’s accusation):
Here is how he distinguishes himself from traditional World Bank Presidents:
Unlike previous World Bank presidents, I don’t come from Wall Street or U.S. politics. I am a practitioner of economic development, a scholar and a writer. My track record is to side with the poor and hungry, not with a corporate balance sheet or a government. Yet the solutions work for all — the poor, companies, governments and the rest of us — by creating a more prosperous, healthy and secure world.
Sachs has the full support of Congressman John Conyers (D-MI), who is circulating a letter on his behalf to President Obama. Current signatories include John Conyers, Hansen Clarke, Jesse Jackson, Jr., Barbara Lee, Zoe Lofgren, Jim McGovern, Lynn Woolsey, Raul Grijalva, Eleanor Holmes Norton, Keith Ellison, Robert Brady, Rubén Hinojosa, Peter DeFazio, Steve Cohen, Maxine Waters, and Bob Filner.
Mark Weisbrot, in his piece yesterday in The Guardian (which I highly recommend reading), highlighted some of the World Bank’s disgraceful policies over the last 15 years. He then explains why Sachs is the right guy to help turn the institution around:
The bank could … play a positive role by increased financing of urgent development needs such as health, education, and sustainable agriculture. In these areas, Jeffrey Sachs has a proven track record over the past decade. He has played an important role in supporting the Global Fund to Fight Aids, Tuberculosis and Malaria, which has saved millions of lives in poor countries. His Millennium Villages project has also provided a significant positive example of how development aid can be used to boost agricultural productivity and health outcomes. This is an important refutation of the widespread cynicism that helps limit the financing of real, positive development aid.
Sachs has also been a strong advocate for debt cancellation in poor countries. His 2008 book Common Wealth provides one of the best overviews of the interrelated problems of climate change, development, poverty, population and health – as well as a set of concrete proposals for addressing them. This is clearly someone who has the knowledge, ideas, and experience to lead the bank in a different direction. … As Sachs noted last week:
“US officials have traditionally viewed the World Bank as an extension of United States foreign policy and commercial interests. … Many projects have catered to US corporate interests rather than to sustainable development.”
But Weisbrot believes ‘Sachs is facing an uphill battle,’ being an election year. Many of Obama’s biggest contributors happen to be the Wall Street banks and corporations that have millions at stake in the World Bank. They will obviously want another one of their Neoliberal bank cronies to man the top spot.
World Bank officials will be accepting nominations for Zoellick’s successor until March 23rd.
WATCH CNN’s recent interview with Jeffrey Sachs:
TAKE ACTION: Ask your Congressperson to Sign John Conyers Letter Pressing Obama to Name Sachs to World Bank (The deadline to sign Conyers letter to Obama is COB Monday, March 12.)
Thought it only fair to post a quote from Naomi Klein, who in her book, The Shock Doctrine, critiqued Neoliberal policies that Sachs had overseen in places like Poland and Russia. She was asked in 2007, if she believed Sachs was merely re-branding his image, or had truly changed:
A lot of people are under the impression that Jeffrey Sachs has renounced his past as a shock therapist and is doing penance now. But if you read The End of Poverty more closely he continues to defend these policies, but simply says there should be a greater cushion for the people at the bottom.
The real legacy of neoliberalism is the story of the income gap. It destroyed the tools that narrowed the gap between rich and poor. The very people who opened up this violent divide might now be saying that we have to do something for the people at the very bottom, but they still have nothing to say for the people in the middle who’ve lost everything.
This is really just a charity model. Jeffrey Sachs says he defines poverty as those whose lives are at risk, the people living on a dollar a day, the same people discussed in the Millennium Development Goals. Of course that needs to be addressed, but let us be clear that we’re talking here about noblesse oblige, that’s all.
Just thought I should put it out there, since I have a world of respect for Naomi Klein and her opinions on the matter.
Health Care Reform: WTF Just Happened? The Left Weighs In
The reaction to Obama’s Health Care Reform fiasco is getting rather explosive on the Left. There seems to be somewhat of a prevailing sentiment that Obama’s Administration bears the lions’ share of the blame for Lieberman and Blue Dog intransigence. Here’s some of the reactions:
Sam Stein from the Huffington Post is reporting that two of the country’s largest labor groups, the SEIU and the AFL-CIO, are holding emergency meetings, and are hinting they will formally oppose the ‘Lieberman-friendly’ bill. He described the labor leaders as “fuming at the concessions that Democratic leadership made in the last few days to win the support of the caucus’s most conservative members, notably Sen. Joseph Lieberman (I-Conn.)” Listen to how one high-ranking labor official described who is to blame for this mess:
“What is really frustrating folks here is that it’s impossible to make and implement plans to pressure senators when the White House and Reid keep undermining the efforts no one from the outside can put any credible pressure on Senators because they know the White House will back that Senator up whatever they do. If the White House is going to cave to a Senator who spent the entire election campaigning with McCain and calling Obama a traitor how are we supposed to have any leverage over anyone?
“If Lieberman — who has done so many horrible things directly to Obama — can get away with this on Obama’s signature issue it makes it infinitely harder for us to pressure senators, on issues in the future, because there is no fear of retribution or coercion from the White House. They only pressure progressives, not anyone in the middle.”
Here’s the President of the United Steel Workers, Leo Gerard, who gives President Obama the benefit of the doubt, by calling him naive, and suggesting he “got hoodwinked” by the Health Insurance Industry. Leo, no offense, but I don’t think Obama is the one showing naivete. He goes on to state:
“I can tell you this — point blank — if we don’t get a meaningful health care bill that reduces costs and has everybody in and doesn’t have an excise tax, has a pay or play for employers, has a public option, or a medicare buy-in, we’re not gonna campaign for any Democrat that voted against this bill, and we’re going to go out and try and defeat them.”
I think Glenn Greenwald has BRILLIANTLY NAILED what’s been going on here, as he usually does. He doesn’t buy that Obama and Rahm Emanuel got bested, due to some sort of naivete. He believes they got EXACTLY the health care bill they always wanted, and shows how they had no problem flexing muscle to get legislation through the Houses in the past when it was something important to them:
Indeed, we’ve seen before what the White House can do — and does do — when they actually care about pressuring members of Congress to support something they genuinely want passed. When FDL and other liberal blogs led an effort to defeat Obama’s war funding bill back in June, the White House became desperate for votes, and here is what they apparently did (though they deny it):
The White House is playing hardball with Democrats who intend to vote against the supplemental war spending bill, threatening freshmen who oppose it that they won’t get help with reelection and will be cut off from the White House, Rep. Lynn Woolsey (D-Calif.) said Friday. “We’re not going to help you. You’ll never hear from us again,” Woolsey said the White House is telling freshmen.
That’s what the White House can do when they actually care about pressuring someone to vote the way they want. Why didn’t they do any of that to the “centrists” who were supposedly obstructing what they wanted on health care? Why didn’t they tell Blanche Lincoln — in a desperate fight for her political life — that she would “never hear from them again,” and would lose DNC and other Democratic institutional support, if she filibustered the public option? Why haven’t they threatened to remove Joe Lieberman’s cherished Homeland Security Chairmanship if he’s been sabotaging the President’s agenda? Why hasn’t the President been rhetorically pressuring Senators to support the public option and Medicare buy-in, or taking any of the other steps outlined here by Adam Green? There’s no guarantee that it would have worked — Obama is not omnipotent and he can’t always control Congressional outcomes — but the lack of any such efforts is extremely telling about what the White House really wanted here.
Jane Hamsher of FireDogLake weighs in with similar sentiments on the Administration:
“They were very good at making it look like they wanted a public option in the final bill without actually doing anything to make it happen,” said Jane Hamsher, publisher of the liberal blog Firedoglake. “It’s hard to believe that the two most powerful people in the country — arguably the world — could not do more to achieve their desired objective than to hand the keys over to Joe Lieberman. They would not be where they are if they are that bad at negotiation.”
Digby weighs in:
There are not a lot of good reasons why [Obama] wouldn’t use the power of his popularity when his numbers were stratospheric to insist on something other than cost controls. One can only assume he didn’t want to.
Even I knew that the Senate was full of a bunch of prima donnas who had to be deftly handled and given a tremendous amount of attention and engagement when you try to do something big. That’s just how it works in that chamber, especially when Democrats are in the majority. It was never going to be easy. But the president had a tremendous amount of good will and political power when he came into office and indicated from the beginning that instead of pushing through his agenda quickly and efficiently he would have the congress to “take the lead” and only inject himself when it was necessary to consecrate some (preferably bipartisan) compromise. That’s a recipe for slow action and bad legislation.
The president may not have the singular power to enact good domestic policy, but he is the only one with the power and public backing to knock heads and lead in his own party. And if the best he can do in that regard is tell the Democrats that they need to “protect him” by passing any bill, well, that’s pretty weak.
Most surprising of all, is the candor coming from Democratic politicians themselves. No more putting a nice spin on things, for the sake of the President. They are pulling-no-punches:
House Appropriations Committee Chairman Dave Obey (D-Wis.) told POLITICO:
“It’s ridiculous, and the Obama administration is sitting on the sidelines. That’s nonsense. The White House has been useless,” he said.
“Snowe? Stupak? Lieberman? Who left these people in charge? It’s time for the President to get his hands dirty. Some of us have compromised our compromised compromise. We need the President to stand up for the values our party shares. We must stop letting the tail wag the dog of this debate.”
Senator Feingold weighed in to The Hill:
“This bill appears to be legislation that the president wanted in the first place, so I don’t think focusing it on Lieberman really hits the truth,” said Feingold.
Here’s what John Conyers had to say about it:
“The president keeps listening to Rahm Emanuel,” he said. “He doesn’t listen to” the Congressional Black Caucus.
As for the Senate health care bill, Conyers went through a list of defeats: “No public option, no extending Medicare to 55, no nothing, an excise tax, God! The insurance lobby is taking over.”
Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus:
“Since the Senate won’t use reconciliation, which only requires 51 votes, it doesn’t look promising for any real change.” Grijalva said he would vote against the Senate bill unless the House is able to make significant changes in conference.
Rep. Peter DeFazio:
“There is unbelievable frustration with the Senate,” he said. “The Senate is a graveyard. They could run the place with 50 or 51 votes, but they don’t want to hurt the club,” he said. “They are relying on people like Joe Lieberman, who was thrown out of the Democratic Party by the voters of his state, to tell the Democratic Party what its agenda is. That’s a very sad state of affairs.”
Rep. Lynn Woolsey:
“Thirty percent of Democrats will not come out and vote if there is no public option in the health care bill,” she said. “What does that tell you?”
I think it’s safe to conclude that Obama and Emanuel have effectively divided the Democratic Party in two. Instead of applying an iota of pressure on Lieberman and the Blue Dogs they are doing the very opposite: hitting back at the base. Note: I didn’t say “hitting back at liberals or the ‘Left Wing of the Party’,” because 88% of ALL Democrats still favor a public option, as does 60% of ALL Americans.
The President has effectively been undermining the popular will of his own party AND country, and he’s furious that everyone isn’t bending over, and giving him his ‘political victory’.