Sunday, April 25, 2010

American Double Standards

From Freefall by Joseph Stiglitz:
For the critics of American-style capitalism in the Third World, the way that America has responded to the current economic crisis has smacked of double standard. During the East Asian crisis, just a decade ago, America and the IMF demanded that the affected countries reduce their government's deficits by cutting back expenditures-- even if, as in Thailand, this resulted in a resurgence of the AIDS epidemic, or even if, as in Indonesia, this meant curtailing food subsidies for the starving, or even if, as in Pakistan, the shortage of public schools led parents to send their children to madrassas, where they would become indoctrinated in Islamic fundamentalism. America and the IMF forced countries to raise interest rates, in some cases (such as Indonesia) to more than 50 percent. They lectured Indonesia about being tough on its banks and demanded that the government not bail them out. What a terrible precedent this would set, they said, and what a terrible intervention into the smooth-running mechanisms of the free market.

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