Recent financial developments like the 40% drop in the stock market, on the back of a total bank meltdown; the housing implosion tied to sketchy subprime mortgages; and the collapse of Madoff investment funds, a $50-billion Ponzi scheme that wiped out high rollers worldwide; makes me reminisce about the Asian currency crisis of 1997/8.Remember when southeast Asian economies underwent painful devaluation of their currencies, helped along by the IMF? And were made to institute neocon economic policies to qualify for loans to get them out of the cascading mess? The impact of currency machinations was so great on regular folks, in Indonesia especially, that it even helped bring down Suharto.
Anyhow, seems like the market-knows-best philosophy of those times has proven to be not so ironclad after all. Even hypercapitalist America has been buying stakes in firms left and right, to prevent a catastrophic economic event (read: Great Depression II). And Barack Obama has proclaimed recent events as history's "final verdict" on laissez-faire capitalism.
As I recall, Malaysian head of state Mahathir Mohammad was saying as much at the time, that the IMF could go stuff themselves with their right-wing reforms. Of course he was derided as a fool for being out of step with economic realities. Did he have it right all along, that the IMF was not the saviour of the crisis, but the catalyst?
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