Just the heading alone, “Trump’s pick” – you must know that his has to be a rotten apple. That is the beauty of Donald Trump – a transparently hideous human being that only severely flawed individuals could support. So of course one will not have to dig too deep to unveil the facts—for Malpass is generally described as a Trump loyalist and can thus be easily profiled as an aging white guy with a fossilized supply side hoax mentality. A progressive brain by its nature evolves and it cannot imagine how an individual would fail to learn from their mistakes—how did this guy, who as an adult keeps tripping up over himself, ever learn to ride a bike as a kid? Answer—his brain had yet to atrophy.
Aug 2007, as the smartest minds were just beginning to sniff impending economic disaster, guess what our mastermind was saying?
“Housing and debt markets are not that big a part of the US economy, or of job creation. It’s more likely the economy is sturdy and will grow solidly in coming months, and perhaps years.”
You would have thought that any economist would have learned that it was unfettered capitalism that lead the great depression; the 1990-92 economic bust caused by advisers such as Malpass (he worked on an array of economic, budget, and foreign policy issues as an economic adviser to Ronald Reagan.)
On October 19, 1987 stock markets around the world crashed. In the U.S. the Dow Jones Industrial Average lost over 22% of its value. Although the causes of “Black Monday” were complex, many saw the crash as a sign that investors were worried about the inflation that might result from large U.S. budget deficits. The American housing market presented another sign of weakness, as in the second half of the 1980s a large number of savings and loan associations (private banks that specialized in home mortgages) went bankrupt. The collapse of the S&L industry negatively impacted the welfare of many American households and precipitated a large government bailout that placed further strain on the budget.
Sound familiar? It was Bill Clinton who had to clean up that “free market/greed is good” mess. The same insane and obstinate policies were fated to ignite the great recession of 2008. At this point a miracle did occur—A fossil, better known as Alan Greenspan, the architect of America’s economic policy 1987-2006, as Chairman of the federal reserve, finally did recognize that his adherence to the prepubescent teachings of Ayn Rand libertarianism was just that—a philosophy that any properly functioning educated adult must ditch. As The New York Times reported:
Mr. Greenspan, who has long argued that the market is often a more effective regulator than the government, has now adopted a more expansive view of the proper role of the state.
He argues that regulators should enforce collateral and capital requirements, limit or ban certain kinds of concentrated bank lending, and even compel financial companies to develop “living wills” that specify how they are to be liquidated in an orderly way.
And he acknowledged shortcomings in regulation — an area on which the central bank has placed far greater emphasis under Mr. Greenspan’s successor, Ben S. Bernanke.
Shall we give the guy (Malpass) a break? Anyone can have an opinion right, surely forecasters can make errors. It is not like deadly stupid opinions have real life consequences? Well not unless one happens to have been the chief economist at Bear Stearns bank. He was there for 15 years before the bank’s near collapse in the 2008 banking crisis.
But surely the great thing about an epic failure or two, is to learn…
“Don’t lose your confidence if you slip, be grateful for a pleasant trip, and pick yourself up; dust yourself off, start all over again”
That’s how a kid learns to ride a bike, how humans get to survive as a species. But we are beginning to realize with these types of humans, that human survival grows more unlikely—and the reasons are becoming more apparent. I mean if he had to go back and start all over again he could not possibly make the same mistake again, right?
Of course he would, because he would personally profit at everyone else’s expense and never suffer any consequences. This is the great transference of wealth, from the Taxpayers to the top 1 percenters. That is what happens when money governs. This type of person will always choose myopic greed over intellectual integrity. How do we know that this inability to evolve is at the core of what Malpass is—beyond the fact that he is a Trumpeteer?
Writing for Forbes in 2010, he reveals zero introspection about the vital importance of Keynesian orthodoxy when dealing with a financial collapse (Bear Stearns being at the center of such a collapse)
If post-election Washington finds the backbone and procedures to spend less and return power to the people, their businesses and states, capital will rush back into the U.S., providing the jobs and investment needed to compete globally.
While some are still arguing that more deficit spending is needed to help people consume and to subsidize small business, the reality is that massive federal spending and control discourage private-sector investment. And the country simply can’t afford it.
So spend less when confronted with deflation—when has that ever worked on a big scale?
Fast forward to 2011. At this point in time, as Obama’s strategy of salvaging Malpass’s mess is beginning to take shape, America beginning to perform better than the still austerity focused Europeans—Malpass recommends increasing interest rates (failure to do so would evidently lead to a recession in 2013), at a time when deflation was still a bigger threat than inflation.
More recently, did Malpass support Trump’s attacks on the Fed Chairman Powell in the last quarter of 2018 for raising interest rates in what is now a more logical environment than back in 2011? Assuming he did, then that would be proof that Malpass is a partisan hack
It is not like all of Malpass’s ideas are bad…
“China’s use of non-market export credits, opaque financing, and exclusive procurement practices often benefits the donor more than the recipient and undermines debt sustainability, domestic institutions, and environmental and social standards.”
Absolutely correct, improving the world’s infrastructure without an over reliance on China’s brand is clearly a pivotal issue for the World Bank.
But the World Bank is a multilateral agency. One cannot put an “America is Great” nincompoop in charge and expect that person to garner the respect necessary for what must by definition be a non-partisan group wielding intellectual and moral authority—and honest broker. Since the White House has nothing in that department, it should recuse itself and get a nonpartisan body like the Brookings Institution to put forward an American nominee. But expecting an intelligent introspective thought out of the White House would be like waiting for Godot.
As Bloomberg points out:
More importantly, if the World Bank is truly to respond to the needs of new, emerging and developing economies, then it needs to be led by someone with direct experience of those nations and their priorities. As former Indian central banker Raghuram Rajan pointed out as long ago as 2008, multilateral agencies have to “encourage [development] strategy formulation” by host governments. They need to be impartial, sometimes combative, policy advisers.
But this is too deep for any ‘Trump loyalist”, you could not even get your ankles wet, wading through their deepest thoughts.
Hopefully the World bank will push back and put America where it now belongs—in the back seat of any policy driven organization that is endangered by America’s more malevolent Oligarch’s that now run the country—running mankind into oblivion.