Tuesday, February 5, 2019

Will Malpass Destroy the World Bank?

Reports are circulating that President Trump will nominate David Malpass to head the World Bank,

The thinking is that Malpass is anti-World Bank.

The Wall Street Journal is putting it this way: Malpass is "one of the World Bank’s sharpest critics within" Trump's administration.

He is currently the Treasury Department’s undersecretary for international affairs.

But don't cheer just yet. Malpass strikes me more as a government mechanic than a demoliotion man. He knows how to play his cards. He has previously served as Deputy Assistant Treasury Secretary under President Ronald Reagan and Deputy Assistant Secretary of State under President George H. W. Bush. You don't get those positions by acting libertarian and even blowing up a small government division within a division.

And he is playing his cards right with Trump by being as pro-mercantilist as you can get and still be considered serious by most of the economics profession.

But for the most part, after you look at his views on the Fed, taxes and trade, you see he is carrying around a phillips-head screwdriver to tweak a situation that calls for a flat head and he doesn't come close to putting on a suicide vest and blowing anything up.

But as Paul Krugman would put it, the very serious people, take Malpass seriously. When he appeared at the Council on Foreign Relations for a Q&A in  2017, Willem Buiter  (Chief Economist at Citigroup), Marty Feldstein (Harvard),  Mike Skol (former Principal Deputy Assistant Secretary of State),  Leland Miller (Senior Fellow at the Brent Scowcroft Center on International Security at the Atlantic Council.), Zachary Karabell (former Head of Global Strategies at Envestnet,) and Deroy Murdock (Senior Fellow with the Atlas Network ) all were in the audience.

But what fascinated me most about the Q&A is when Malpass made this comment, and keep in mind this was in 2017:
The Northern Triangle of Central America faces particular challenges which we think deserve the concerted efforts of the entire region. Non-democratic governments in Cuba and Venezuela are dragging down their people and neighbors leaving poverty. Many countries are working hard to stop the damage by those governments, and we have hope that the Western Hemisphere will be freer as the decade progresses...
And so right now—I mentioned in my remarks the problems in Cuba and in Venezuela moving away from freedom. There needs to be a coordinated global effort. We can lead some of that from Treasury with people in the region. For example, in October we held a meeting of the Friends of Venezuela at the Treasury Department. Secretary Mnuchin led, and we had very senior people from Venezuela’s neighbors. So it was a diplomatic effort. And those neighbors often are urging us to do even more as part of trying to bring Venezuela back to democracy. 
And so we really need a broad U.S. government effort.
This guy isn't anti-Deep State he is a member of the vanguard of Deep State plotting.

No doubt, he would make noise at the World Bank and shift some priorities around. He doesn't like, for example, Bank money going to China but the World Bank is not going to disappear on his watch.

That is if he gets the position if Trump nominates him. The presidency has always gone to the US nominee but there are some rumblings that another nominee may be advanced by another country.

Either way, it won't matter, the focus of cronyism might be different based on who lands in the driver's seat but the cronyism will continue.


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