September, 1999

Well it's quite an uproar, all this trouble with Russia's financial collapse, stolen billions and finger pointing to the International Monetary Fund or Al Gore for turning the other cheek or poor old Boris Yeltsin for not being able to leash his hungry dogs. But what the hell could we possibly be thinking? This bailing out business has never worked and can never work as presently constructed. Jeez, what a bunch of dimwits.

As just a brief historical note, Al Gore or the IMF need look no further back than Ferdinand Marcos to understand that heaps of dough given without controls merely end up in Imelda's shoe collection. And yet there's this prevailing "we gotta do something" attitude. Well certainly, we do gotta do something to keep the huge and trembling Russian machine from merely falling to pieces before our eyes. But recycling IMF money through laundered New York bank accounts does precious little other than scare off (rightfully so) further loans and nothing at all for its intended purposes.

Much hand wringing. Many op-ed pieces. Lots of fingers to point.

Why not merely cut out the middleman? It's those middlemen in a kleptocracy like Russia or the Phillipines that allow all the siphoning. Suppose as an instance, that Russia needs some of the following items on their wish list of survival:

The payment of back wages in the military and various forgotten and isolated cities in Siberia. Solution: Pay the wages, directly and according to an identifiable schedule. Sidestep the Ministries that conveniently 'lose' the money.

New roads, new railway lines, new or upgraded industrial facilities. Solution: Merely build the damned things with western contractors (after all, that's where the money comes from). German or American or Brit contractors who use Russian labor and instruct Russian managers and technical people in the construction and ultimate operation. They learn something, we learn something, Al Gore and the IMF learn something. Additional benefits accrue to the cultural understanding of one another and the honest-to-God sight of something being built by the ordinary Russian in the street.

The obvious objection is "that's not the way they want it." Well I'm sure that's not the way they want it. Kind of a mistrustful thing not to just write out the checks and hope for the best. Sort of puts the Yeltsins and ministers in an unsavory light and loses them some face with the Russia people.

Well that's a laugh on the face of it. Yeltsin and the ministers have no face to lose with the Russian public. Their approval rating is somewhere hovering around the three to five percent rate and that translates to no approval at all from the citizenry. Additionally, the west is taking a hell of a black eye with the average Russian Boris on the street, who sees the recent years of unending collapse as a western plot to send Russia back to the dark ages. It's not lost on them that a few are cruising the streets in armored Mercedes while the many are slogging through life on diminished means. It wasn't that bad before the Communists fell. We've been snookered and the Russian people have been snookered as well.

If the current American administration and the IMF have been derelict in their mindless support of an insupportable Russian incompetent, then it means little enough to point fingers. The billions gone are irretrievable. The billions yet to come (and they will come, must come) need to be converted to direct-benefit transfer.

If Russia (or Indonesia or wherever) don't like it, they needn't take it. Financial help is after all, a voluntary thing. Time to run it as something other than an entitlement program for those in charge.

Get out of the Archives and read what Jim's writing today