Wednesday, May 25, 2011

Oh! Calcutta!

The French magazine Le Point reported that Dominique Strauss-Kahn’s last words, before being hauled off the Air France AF023 flight to Paris by two New York Port Authority detectives, were addressed to one of the air hostesses “loudly and openly” and in front of witnesses: “Quel beau cul!”.

Admittedly this utterance sounds better in French than in English. Camille Clovis Trouille (1889-1975) - a minor part-time painter and decorator, Surrealist and anti-clerical – used a pun on that kind of French remark to name his painting of a naked woman’s buttocks: “Oh! Calcutta! Calcutta!”. And Kenneth Tynan used both that title and that painting in his 1969 Broadway show, featuring extensive scenes of total nudity, that at the time became the longest running and is said to be still today the sixth-longest running in Broadway’s history.

Nevertheless, the remark is not endearing or charming, but gross and aggressive. DSK is sub judice and the courts will decide whether he is guilty and of what. But there can be no doubt, regardless of the courts’ eventual ruling – especially if it is the case that his line of defence is the consensual nature of sexual acts with the Sofitel chambermaid - that he is “a man with a problem that may make him ill-equipped to lead an institution where women work under his command”. These are the words used by a colleague of his, with whom he had an affair, in a letter she addressed to the IMF Executive Board in 2008. A public external enquiry on that case cleared DSK because there had been “no harassment” but ruled that he had made “a serious error of judgment”. The Fund lacked - and still lacks - “clear and protected arrangements for reporting possible misconduct” and “clear disciplinary arrangements” to deal with it if it occurred.

Unfortunately, DSK’s latest little error of judgment has already had the most devastating consequences, not only for him and his family but for the IMF, which in the three and a half years of his tenure he had steered to a larger scale and to a greater role in global governance during the greatest world economic crisis since 1929; for the sovereign debt crisis in the Eurozone and the future of the euro; for the French presidential elections in which he had been a frontrunner who could have led the Socialists to their first victory since Mitterand’s 1988 re-election.

DSK is a Keynesian, like his Chief Economist Olivier Blanchard (from MIT). He persuaded IMF shareholders to raise $500bn additional capital thus trebling its resources. At the emergency summit of G-20 leaders on 15 November 2008 he proposed, and obtained, a large scale global fiscal stimulus of the order of 2% of global GDP, and encouraged a parallel monetary expansion. He opposed calls for an early exit strategy (for instance by the German Chancellor Angela Merkel and the ECB President Jean-Claude Trichet), which he viewed as premature, and above all a collective exit strategy considered by the G-8 of 8-10 July 2009 at L’Aquila, which would have been disastrous.

He junked the old “Washington Consensus” that had inspired IMF operations in the 1980s in Latin America and in the 1990s in the post-socialist transition economies. He was well aware of debt sustainability issues, but was also very conscious of the impact of fiscal austerity on poverty and distribution. Under his leadership there was concern for gradualism, and for client countries’ ownership of stabilization programmes. He aimed higher than he could reach, just to make progress; an instance would be his argument for a new role for the IMF as a global Lender of Last Resort, which was inappropriate, for which he never really developed a case and let drop.

His revolution was unfinished. He was acknowledged to be a very good diplomat, who listened to both North and South; was trusted by the Greeks, was the only non-German with an influence on Angela Merkel.

He is virtually irreplaceable. The problem with Christine Lagarde is not the Tapie affair, of which she is likely to be cleared on 10 June, but – as Martin Wolf puts it in the FT of 25 May – “her limited knowledge of economics”. DSK’s letter of resignation as IMF Managing Director ended, incongruously, with the words “Au revoir”. Sadly, he clearly meant “Adieu”.


Anonymous said...

Unfortunately it happens that some people who are exceptionally good in their public role, should suffer from unthinkable fragilities in their private, more intimate life. This is confirmed by serious biographies of great historical figures.

On the other hand, the opposite also happens, not infrequently: people whose private life is completely irreproachable may lack any public virtue. And it may happen that a person from the latter group might end up replacing one from the first group. Whatever can we do about it?

D. Mario Nuti said...

It could be worse: a public figure without any qualities might behave immorally and criminally (the better case of an irreproachable talented public figure is too good to be true).

What can we do? Forgive those sins that are not crimes, and prosecute crimes regardless of the wealth and status of public figures. As it was done in the US for Strauss-Kahn (possibly going over the top) and is not being done in Italy for Silvio Berlusconi.

Martha said...

Christine Lagarde is not only a woman, but a former member of the French national synchronised swimming team. What better qualifications to represent within the IMF the most a-synchronous Eurozone?

AND she is said to be a vegetarian who never drinks alcohol. AND her passions could not be more innocent: yoga, scuba diving, swimming and gardening. Let's hope she accepts the post.

Branko said...

I would not totally rule out DSK's return to great politics. If he manages to get a hung jury (and you can be assured that his lawyers will give hell to the accuser), and then makes some noises to the effect that his behavior was not always the best, that he made "errors of judgment" and says a few other nostrums, he may be even back into French presidential race like an independent. Another possibility is that the maid accepts to be paid off (apparently such contacts have already been made) although I am not sure whether in that case the NY prosecutor office may still continue with the case. So, DSK might after all have really meant just to say "Au revoir, les gars".

D. Mario Nuti said...

It is conceivable that he might walk. But he can't go back to manage the IMF; and for the French Presidency his image is irreparably tarnished, not least by a few other similar skeletons in his cupboard, and the millions that he and his wife mobilised to get him bail and a luxury home for house arrest, on top of the Porsche and other non-socialist traits of his habits.

I would be interested to see what odds - if any - are being offered on his comeback by Political Betting.

Bob said...

DSK had an important role in the IMF reacting to the global crisis in 2008-2009, but there was nothing innovative or effective in his response to the 2010 Eurozone crisis of sovereign debt. He simply went along passively with the delayed,inadequate and cacofonous European initiatives,simply raising the scale of IMF European operations to an excessive level.

D. Mario Nuti said...

For conspiracy theorists, the latest food for thought:

"WORLD EXCLUSIVE: Dominic Strauss-Kahn, his brother, and a trail leading all the way to the White House"