What's with America and the International Monetary Fund? If you read the Financial Times, Wednesday's IMF forecast of significant global contraction just prior to its upcoming meetings in Washington was front-page-worthy news ("IMF sees 1.3% drop in global output" in big, bold scary type), with commentary inside. The New York Times ran a single story on the IMF forecast on B2, while The Wall Street Journal left the multilateral organization that just got a trillion dollars from the G-20 to save the world out of the paper entirely (it didn't even make the index), save, for sharp-eyed readers, a mention in the lead of David Wessel's economics column (but it did make the online edition). Even The Washington Post, for whom the IMF is a local institution, only ran a curtain-raising interview on the meetings this week (on A11) with Robert Zoellick, the American currently heading IMF sibling World Bank, who announced his own $55 billion stimulus plan. When in doubt, find an American.
Carrying the banner of the IMF in the U.S. is that ubiquitous Brit, former IMF chief economist Simon Johnson, who nattered on in his usual intelligent fashion on National Public Radio early Thursday morning. (Not that it matters, but I'm beginning to feel as if Johnson's shadowing me wherever I go.) Johnson continues to be the exception that proves the rule when it comes to the IMF.
Well, these kinds of coverage differences wouldn't matter that much if, well, it didn't seem so important -- a case Johnson effectively makes. On NPR Johnson was particularly persuasive about the need to follow the trillion-dollar replenishment of the IMF by restoring earlier budget cuts. In the FT, Lex struggles mightily to put the gloom of the IMF forecast into perspective, comparing its pessimistic numbers to the relative optimism of folks like the European Central Bank and the U.S. Treasury. This explains in part the disdain of the remarkably large, active and articulate IMF crowd for Treasury's stress tests, which are based on rosier forecasts. These differences are striking, which doesn't boost my confidence in economic forecasting.
John Authers in the FT makes another sensible point, comparing the gloom of the "policy wonks" at the IMF with the relative cheer of equity markets around the world, particularly when it comes to emerging markets. Authers puts his finger on a fascinating phenomenon that speaks to all kinds of current debates. In the U.S., the IMF is considered a veritable foreign haven of policy wonkery, a worrisome combination. U.S. papers seem to believe that American readers don't know and don't care about the IMF or wonkish economics period, and if they do, they viscerally dislike it. Why? Well, being a superpower means you only have to care about yourself. We may have nurtured the global trading system, but we still don't really need to worry about countries far far away, unless we invade them. Besides, there is a long tradition in American politics of antipathy toward economics, of a desire to invent a kind of counter-economics, some of it on display in the Bush administration.
The point here is pretty obvious: The Brits and others care more about the multilateral institutions because they're not superpowers and they understand more intuitively that globalization is not a zero-sum game. Who knows if that will change here as the crisis continues? - Robert Teitelman
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Robert Teitelman is the editor in chief of The Deal.
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