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Forgive Us Our Debtors ...
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11893 |
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Section : |
CURRENT ISSUES
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8 / 1987 |
1,008 Words |
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Warren Brookes
Warren T. Brookes is a nationally syndicated economics
columnist. |
The announcement by Citicorp, Chase Manhattan Bank, BankAmerica, and others that they were increasing their loan reserves to cover potential losses on their Third World debts was a welcome shower of sanity on the nation's financial markets.
It was also the final vindication of those brave souls, liberal and conservative, Republican and Democrat, who four years ago bucked the president, congressional leadership, and the entire U.S. financial establishment, not to mention the major national media, and voted against the $8.4 billion of additional funds to the International Monetary Fund to keep those debts "serviced," in return for the IMF's imposing on these nations severe austerity programs.
This losing opposition was full of "strange political bedfellows," like Phil Crane and John Conyers, Jim Courter and George Crockett, Bill Dannemeyer and Tom Daschle, Jack Kemp and Ron Dellums, Newt Gingrich and Henry Gonzalez, Patsy Schroeder and Mark Siljander, George Miller and Connie Mack.
Those who opposed this "big bank bailout" argued that it would merely reward the banks for having made bad loans and drive the debtor nations still further into debt just to service the debt. Since those nation were some of our biggest export markets, keeping those debts "serviced" and rising would merely delay their ability to grow and to buy our products.
One of the nation's leading monetary economists, the late Robert Weintraub, argued that letting the banks and their debtors work this problem out together, without either government interference or subsidy, would
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