More Signs of Demolition Job against IMF’s Dominique Strauss Kahn

The sexual assault case against former IMF chief Dominique Strauss-Kahn has reportedly been in a near collapse.

From the Wall Street Journal,

The sexual-assault case against former International Monetary Fund leader Dominique Strauss-Kahn appeared to be weakening Thursday as prosecutors and his defense team prepared to raise questions about the credibility of the maid who accused him, people close to the case said.

Problems with the prosecution's main witness are expected to be made public at a last-minute court hearing scheduled for Friday morning before State Supreme Court Justice Michael Obus. Defense lawyers are likely to ask the judge to end house arrest and electronic monitoring, two restrictive conditions of Mr. Strauss-Kahn's bail.

"There will be serious issues raised by the district attorney's office and us concerning the credibility of the complaining witness," said Benjamin Brafman, a lawyer for Mr. Strauss-Kahn.

Mr. Strauss-Kahn, 62 years old, has pleaded not guilty to charges of sexually assaulting the maid in his suite May 14 at the Sofitel hotel in Manhattan…

Prosecutors aren't expected to immediately ask for dismissal of the charges against Mr. Strauss-Kahn, who faces a seven-count indictment, people familiar with the matter said.

Prosecutors are expected to reveal in court that the maid told them she had been the victim of a gang rape in her home country of Guinea, and later admitted that she had made the story up, a person familiar with the matter said.

The revelations about the witness also involve her interaction with a man jailed on drug charges with whom she was taped in a telephone call, one person familiar with the situation said. Prosecutors and defense lawyers met Thursday to discuss the issues.

DSK has reportedly been released on recognizance and seem on path to absolution.

The unfolding events manifest even more signs of a demolition job.

Could it be because DSK had questioned about the disappearance of gold reserves in the US, or his anti-US dollar stance where he has called for an alternative currency or because DSK argued for a default of Greece?

Obviously it has been about politics, where powerful vested interest groups wanted him out and knew exactly how to exploit DSK’s vulnerabilities.

As earlier said the DSK episode epitomizes how frictions in politics are dealt with—guiltism, covetism, envyism angerism and villainism—which leads to conflicts and consequently demolition jobs, if not, outright violence.

End The IMF

The sexual molestation scandal has compelled the resignation of IMF’s Dominique Strauss Khan.

Now there are have been speculations on his replacement.

As of yesterday bookmakers have placed the odds on some possible replacement candidates.

This from the Economist

Here are some of the people viewed to be plausible contenders to replace Mr Strauss-Kahn, and the odds on their getting the top job according to William Hill, a British bookmaker. A win for a non-European would be a first for the IMF, as would the appointment of Christine Lagarde, who would be the first woman to head the organisation.

Meanwhile, the Wall Street Journal describes part of how IMF politics works.

From the WSJ

Because the U.S. and European nations together have always held a majority voting stake in the IMF, that unwritten convention has guided the leadership process for the past six decades. Any executive directors on the 24-member board — representing the IMF’s 187 governments — can propose candidates for consideration, generally based on guidance from their home countries. In turn, the board has used informal straw polls — rather than formal recorded votes — to gauge support for the candidates. (Though formal voting isn’t used, the distribution of voting shares helps determine who can garner enough support as a candidate.)

At times, though, the U.S. and Europe have been divided on their options. In 2000, for instance, the European Union formally backed German deputy finance minister Caio Koch-Weser to take the top post at the fund, replacing longtime IMF Managing Director Michel Camdessus of France. But the U.S. balked, leading the White House press secretary at the time to publicly oppose the choice. Many developing nations wanted then-Acting Managing Director Stanley Fischer, an American born in Zambia, to fill the job.

After a month of heated public debate, the IMF eventually settled on German national Horst Kohler, who was president of the European Bank for Reconstruction and Development.

The U.S. has been expected to take a back-seat role in choosing the next managing director, focusing instead on its traditional role of picking the IMF’s No. 2 official. The current No. 2, John Lipsky, is slated to leave his post in August. For now, though, U.S. officials have put that process on hold considering the rush to fill the top post.

Since the IMF’s founding, all 10 IMF managing directors have come from Europe. The managing director is typically a former finance minister or central bank governor from a Western European country.

So the IMF has been mostly been a US-Europe turf, where the US has allowed Europeans to take the helm since.

Yet some have floated that the Kahn episode could even be a frame up.

Writes Bob Wenzel,

I continue to believe that the most likely explanation for him coming out of the bathroom naked is that he was expecting someone.

If he did make a call to an escort service than I fully believe a government agency could have set DSK up. What's more, this is a major French hotel, which means it his highly likely that French government agents are floating around the hotel as guests and employees.

The reasons: perhaps because he “broke free from the party line” (may have offended some vested interest groups) with his current policies or perhaps it was about the upcoming national elections in France or a combination of both.

A French poll reveals that about 57% believes that Kahn had been a ‘victim of a plot’

This only shows how politicking could have played a nasty part in the sordid Kahn affair which also reveals on the operational procedures of the IMF—which seems indistinguishable from any national agencies which redistributes resources politically.

Also the US-European political hegemony of the multilateral institution translates to the channeling resources to uphold their political interest. And this is why Emerging Markets are unlikely to gain a leadership foothold in the near future. The division of spoils belong to the winners.

Besides, the fundamental role for IMF’s existence have been exhausted, where the agency’s operations has shifted from ‘monetary’ to ‘developmental’.

As Cato’s Doug Bandow writes, [hat tip Dan Mitchell] (bold highlights mine)

The IMF's founding purpose vanished when the system of fixed exchange rates collapsed in the early 1970s. But instead of closing up shop (no jobs for international bureaucrats in that!), the IMF switched to promoting development. That is, it became a welfare program for Third World governments (and, more recently, for Eastern Europe and even Greece).

So maybe it’s not time to seek a replacement. Maybe it’s time for the IMF to stop meddling in the affairs of nations.

Maybe it’s time for the IMF to stop propping up collectivist regimes, bailing out unsustainable systems and promoting interests of political operatives behind the scenes.

As Leland B. Yeager writes in Cato (Hat tip Don Boudreaux) [bold emphasis mine]

I am inclined to concur in points made by Ian V squez (1997) and Allan Meltzer (1995) about activities of the IMF (and similarly of the World Bank). These tend to support government domination of economies, despite ``conditionality'' purporting to do otherwise; and politicization of economies increases the scope for rent-seeking. Thrusting debt onto poor countries, putting them onto a debt treadmill, ill serves economic development. Funds for bailouts create moral hazard, tending to delay reforming crisis-prone policies (see The Economist 1997b). New issues of SDRs, which the IMF staff likes to propose, accomplish international transfers of wealth in a way that most legislators do not even understand. Self-important international bureaucracies have institutional incentives to invent new functions for themselves, to expand, and to keep client countries dependent on their aid.

Maybe it’s time to abolish the IMF.

IMF Head Arrested For Sexual Molestation

From New York Daily News

A top French politician nicknamed "the great seducer" was dragged off a flight at Kennedy Airport Saturday after he was accused of sexually assaulting a Manhattan hotel maid.

Port Authority cops grabbed Dominique Strauss-Kahn, the head of the International Monetary Fund and a presidential hopeful in France, moments before his Air France plane took off about 4:45 p.m.

Strauss-Kahn, 62, allegedly crept up behind a maid after she entered his room and forced her to perform oral sex on him, sources said.

The woman broke free and ran out of the room. Strauss-Kahn quickly headed for the airport, sources said.

Charges against Strauss-Kahn, who is married to well-known French TV journalist Anne Sinclair, were pending Saturday night, sources said.

Hours before Strauss-Kahn was pulled from the flight, a close Socialist Party ally claimed he was the target of a smear campaign by French President Nicolas Sarkozy.

My two cents.

Politics is a dirty game.

While this sorry event shows how officials are subject to the same frailties as anyone else, the difference is that the political class have the tendency to abuse their powers just to meet their personal desires.

Besides, the law applies differently to everyone. Remember this? (hat tip Charleston Voice)

Or that maybe too much of economics can increase one's libido too?

Manny Pacquiao/Tiger Woods Controversies: Victory’s Thousand Fathers

ONE of the du jour topics in social gatherings I recently attended this holiday season has been the sensual indiscretions by international sporting legends as Tiger Woods and Manny Pacquiao.

Most of the discussions, like any conventional chitchat, seem to be focused on the “moral aspects” to which would appear to me as reeking in self-righteous cockamamie.

Yet, I find it appallingly a highly prejudiced view that media have opted to sensationalize what would be normally seen as stereotyped celebrity lifestyle- one has only to look at tmz.com for a daily fare on celebrity flings.

However what eludes local media is the fact that these sport champions are merely human beings whom are subject to instinctive vulnerabilities.

Considering the immense fame and wealth or the social status acquired, which is not just a relative conventional high status but of the highest strata; the attendant acclaim from their sporting feats signifies as powerful biological signaling mechanism in terms of the sexual preferences for the opposite sex in the order of Natural Selection.

In other words, some women, perhaps, may see illicit relationships or trysts with these sport heroes as being a sublime beneficiary of the 'spreading good and healthy genes', or possibly hoping to get a sliver or piggyback on the material or non-material bounties of the celebrity’s success (attention, finance, etc.).

In addition, if countless admirers would scramble to have their pictures taken with these historical figures or get autographs for posterity purposes, one can’t blame many in the opposite sex to engage in concupiscent adventurism for the same reasons.

So if musicians (mostly rock n’ roll artists) get the chicks, what more them, as still youthful world record champions?

Nevertheless, what most really fail to comprehend is that people really don’t cherish celebrities because of who they are, but because of what they have accomplished.

For instance, the fledging and budding Manny Pacquiao around 15 years ago used to train in our neighborhood in Mandaluyong (as formerly part of the Abalos stable) while yet aspiring for boxing glory, who was then a nameless aspirant who wouldn’t get anybody’s attention, nor would have sensational sexual intrigues that would elicit publicity…that is until his recent string of record world victories.

In short, fans love celebrities MOSTLY for their feats.

Hence, it would seem cursory to deduce that when the glory of victory fades, all the accompanying privileges seen today would likewise dissipate. And perhaps it is why the political spectrum seems like an alluring alternative for Mr. Pacquiao (possibly in the realization of such prospects).

Here, John F. Kennedy’s maxim reverberates, ``Victory has a thousand fathers, but defeat is an orphan.”

Bottom line: Controversies are indispensable part of the success.