Stanley Fischer, poster boy for austerity, bad choice for Fed vice chairman

[This post by Josh Snodgrass reflects his opinions and not necessarily anyone else in Alternative Banking.]

In 1997, several East Asian countries had currency collapses and debt crises — something about banks borrowing too much money short term, sound familiar?

The International Monetary Fund (IMF) swooped in to the “rescue” them by imposing austerity. Stanley Fischer was the technocratic #2 and enforcer of those terms. He became the poster-boy for how the IMF and US were imposing harsh terms which forced the end of subsidies that helped the poor afford to eat (sound familiar).

He later said ”Every place you turn you read the same story, that we came in, that we made things worse,” said Stanley Fischer, ”We frequently get the blame, some of it well-deserved”

The New York Times reported: “Once, the I.M.F.’s critics were largely found in Africa and South Asia, were the fund was often viewed as arrogant; today they include Wall Street’s biggest players and top officials in the most powerful economies of Asia and Europe.”

He then had a stint as Vice Chair of Citigroup from 2002-05 — the period that they piled on huge mortgage exposures that lead them to the brink of default (they would have failed but for the bailout).

Stanley Fischer is now reported to be the front-runner for the number 2 post at the Fed. Surely we can do better. How about someone who really will work to achieve the Fed’s mandate to promote full employment?

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