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Venting

I don't know about you but I'm getting a little tired of my elected leaders going around the world apologizing to anyone who will listen and conceding that yes indeed, if something's not going well it is probably America's fault.

The latest bit of self-flagelation came from Treasury Secretary Geithner today when in a speech he agreed that the U.S. must take a substantial share of the blame for the financial crisis. Would somebody please explain to me exactly what it was we were doing while the rest of the world followed best practices. 

This entire mess has always looked to me like an equal opportunity f***-up. Somehow I missed the part about the rest of the world begging us to make our consumers stop buying their products as well as the chapter in which the European banks were forced to buy CDS from AIG in order to game their regulators. No doubt the Bush administration kept all of that under wraps.

Where is all of this groveling getting us anyway save to placate political constituencies. It seems beyond time to accept our current circumstances and get on with fixing things. So no more of this. Let's just get on with figuring a way out. So far, that seems to be more of a challenge than most are up to.

While I'm throwing thunderbolts about let me send a couple the IMF's way.

You couldn't miss the news of their latest study on the economy of the world if you tried. They seem to be trying to out-Roubini Roubini. Last year bank losses were projected to be $1 trillion then it was $2.2 trillion in October and now its $4 trillion. Where the numbers come from is anyone's guess but the bigger the better seems to be their motto.

The question that no one seems to want to ask is why we should believe these guys. As I posted a few weeks ago (link), the IMF has a less than stellar forecasting record. Here's what I wrote:

n June 2007 the U.K.’s Financial Services Compensation Scheme (sort of like our FDIC) issued a report on Icelandic economy. They quoted an “expert body” which said that, ”The medium-term prospects for the Icelandic economy remain enviable.”

That "expert body" was the IMF. I frankly don't recall hearing much from them in the several years that led up to the global crisis either.  Having so far contributed nothing at the outset, they seem to be determined, based on their success at the G-20 summit, to move to center stage. Pardon me if I'm just a little skittish about that. Somehow a supranational organization controlled largely by European countries with a Socialist at its helm doesn't fill me with confidence. I have the feeling I might not much like the results they engineer.

There, I feel better.

more: here and here