Let the Asian Tigers Fend for ThemseIves
Bailout: Why spend billions in U.S. taxpayer
funds for corrupt nations when we can't provide for our own people
by Bernard Sanders
Los Angeles Times, December 10, 1997
Simply stated, the role of the United States government in
the bailout of four East Asian countries is an outrage and a flagrant
example of the power that Big Money has in American politics.
It also exemplifies the degree to which both major political parties
ignore the needs of ordinary people, and why a majority of American
citizens have given up on the political process.
Somehow, at a time when President Clinton, Newt Gingrich and
many leaders in Congress have told us that we have to cut back
on Medicare, Medicaid, veterans' programs, affordable housing
and children's needs, enough money suddenly appears in the Treasury
so that, within a few weeks time, we can provide some $15 to $20
billion dollars in loans to Indonesia, Thailand, the Philippines
and South Korea.
Twenty-two percent of the children in this country live in
poverty, millions of elderly people cannot afford their prescription
drugs, and forty million Americans lack health insurance. For
these people, there is just no government money available to help
them. They are lectured, instead, about how tough and full of
risks the world is, and how the government can't protect everyone.
But when foreign governments, some of which are led by corrupt
authoritarian billionaires need assistance, the U.S. government
is there in rapid response fashion.
Where are the "risks" for the poorly managed governments
who have run their economies into bankruptcy? Where is the "magic
of the marketplace" for the reckless investors and predatory
speculators who have made huge profits in Asia? Where are the
pious and fine sounding words now about the "self-regulation"
of the free enterprise system?
And what about the deficit and our national debt? It's not
just Bill Clinton and the corporate Democrats. Where are all those
conservative Republicans who for years have been worried about
federal spending, balancing the budget and the "limits of
Here are just a few of the concerns I have with the Asian
bailouts and the entire process
1) Having listened to the House spending endless hours of
debate during the recently concluded session over appropriations
of $1 million, I find it incredible that there has not been one
word of floor discussion regarding a bailout that places at risk
an estimated $15 billion to $20 billion of U.S. taxpayers' money.
This projected multi-billion dollar loan is almost twice as much
as the entire foreign aid appropriation bill to which Congress
devotes hundreds of hours of scrutiny. What is the proper responsibility
of Congress when huge sums of public funds are put at risk? Can
the president act unilaterally on an issue like this?
2) Does U.S. participation in these IMF/ World Bank loans
follow Congress' mandate on human rights? The Sanders-Frank amendment
of 1994 requires the Secretary of the Treasury to direct U.S.
executive directors of the international financial institutions
to persuade the IMF and the World Bank to adopt policies that
encourage borrowing countries to guarantee internationally recognized
workers' rights. Have these Americans done that?
To the best of my knowledge, there is no language in any of
these loan agreements guaranteeing internationally recognized
workers' rights. In Indonesia, Muchtar Pakpahan, the head of the
independent Indonesia Labor Welfare Union, is still in jail because
of his belief that workers have the right to join unions.
3) How much money is in the Exchange Stabilization Fund, and
what are the precedents and conditions for utilizing that fund?
Can the president really bail out any country, at any time, and
for any reason?
4) Who will be the major beneficiaries? According to the State
Department's annual human rights report, " Despite a surface
adherence to democratic forms, the Indonesian political system
remains strongly authoritarian. The government is dominated by
an elite comprising President Suharto (now in his sixth five-year
term), his close associates, and the military." Suharto and
his family have an estimated worth of $30 billion dollars, and
control large sections of the Indonesian economy. How much of
this assistance will go directly to the Suharto family? Are these
really the people that the U.S. government should be bailing out?
5) What precedent is this bailout setting, and what does it
say about our role in the globalization of the international economy?
Given all the enormous unresolved problems facing our country,
is it really good public policy to allow a handful of people in
Washington, the IMF and World Bank to attempt to manage much of
the world's economy? If the U.S. government cannot protect millions
of small business people and family farmers in this country who
have gone out of business in recent years, should we really be
responding to every bank and business failure throughout the world?
Americans must rethink the nature of our relationship to the
global economy- and our obligation to millions of needy Americans.
Rep. Bernard Sanders (I-Vt.) is a member of the Domestic and
International Monetary Policy Subcommittee of the House Banking
New Global Economy