Well, not really. However, Kevin Hassett of the neoconservative American Enterprise Institute (AEI) suggests in a Bloomberg op-ed that another Wolfowitz-lite persona would best serve as the United States' next nominee for World Bank head honcho. Remember when Bolton said that the top ten floors of the UN could be blown away and no one could tell the difference? Hassett says that blowing away the entire World Bank could be done and no one would care. Talk about the World Bank having enemies (on the political) Left and Right.The complaints Hassett makes are boilerplate neoconservative stuff: the World Bank is a waste of money, it is corrupt, etc. In fact, his rhetoric is indistinguishable from that of Bolton, which is no surprise as Bolton is another AEI character. Given how poorly received Wolfowitz was, nonetheless, Hassett proposes all sorts of folks who aren't that much different--with the possible exception of Larry Summers. Of course, Summers didn't exactly endear himself with the infamous World Bank memo he wrote while serving as chief economist there, but that's another story for another time. Here's Hassett:
Now that World Bank President Paul Wolfowitz has resigned, the Bush administration has two options: It can appoint a new bank president who will continue the tough work Wolfowitz began of reforming the bank. Or it can refuse to name a president and withdraw U.S. support for the institution.Before he can decide which path to take, President George W. Bush must decide whether the World Bank is worth saving.
On the face of it, the answer seems to be a clear ``no.'' The bank has deviated so far from its original, worthy mission that its founders would hardly recognize it. It has become a generous welfare program for bureaucrats that finances itself by drawing money away from the world's poorest and neediest people.
When the bank was founded in 1944 it was intended to fill a gap caused by a market imperfection. Developing countries often had little access to capital, so they couldn't borrow the money they needed to pursue key economic projects. It was a worthy endeavor for developed countries to pool their resources and lend money to them.
But today, the World Bank hands out subsidized loans to relatively rich countries. My colleague at the American Enterprise Institute, Adam Lerrick, recently wrote that the proportion of loans going to countries without international bond ratings plummeted to 1 percent between 2001 and 2005 from 40 percent in 1993.
The major borrowers of the bank have ready access to credit elsewhere. World Bank loans accounted for a measly 0.4 percent of the capital flow to its top 10 borrowers, according to Lerrick.
What's worse, these borrowers aren't even poor. Lerrick reports that six of the top 10 borrowers, accounting for 52 percent of bank loans over a recent five-year period, had average per capita incomes of $8,000. That places them comfortably in the top quarter of developing countries. To top it off, the money has a nasty habit of disappearing along the way.
A U.S. News & World Report investigation reported that Glenn Ware, a former senior bank investigator, said his unit had uncovered ``a recurring pattern of bribery, kickbacks, front companies (and) shell companies.'' How bad is it? U.S. News quotes Northwestern University professor Jeffrey Winters, who estimated the bank has likely lost $100 billion to corruption over the years.
And it's not just Third World dictators who are running off with the money. World Bank employees often graduate from their cushy salaried positions to become consultants. Consultant fees can run into the millions...
Adding to the problem is that borrowers are required to adjust their domestic policies according to the advice of World Bank ``experts'' when they accept loans. The economic damage caused by World Bank advice may exceed the benefit of the bank's loan subsidies.
In other words, no rational country should be willing to take the loan packages that are offered. Why do the loans still exist at all? A big reason is there are enough bureaucrats the world over who put their own interests above those of their country, and take a slice for themselves.
Many countries have decided not to play that game at all, and there are signs the World Bank's business is drying up. Loans are being retired at a fast enough rate that the bank's total portfolio is dwindling.
So the Bush administration must look at this mess and decide whether it's possible or desirable to save this sinking ship. Or should the U.S. wash its hands of this sorry institution once and for all?
My vote would clearly be for the latter, but if a last rescue is desired, then the president must pick a replacement for Wolfowitz who has the organizational savvy and intellect to go to war against the bureaucrats who finished off Wolfowitz [poor, poor Paul. Sniff].
Four candidates come to mind. The best choice for the job would be Martin Feldstein [!] of Harvard University. Feldstein, a confidant of presidents and giant of the economics profession, is a no-nonsense economist with ample executive experience, both in Washington and in business.
His gravitas would immediately put to shame opponents within the bank, and he would have the intellectual wherewithal to separate the wheat from the chaff in the bank's own analyses.
A second choice would be Glenn Hubbard [!!], dean of the Graduate School of Business at Columbia University. Hubbard is as smart as can be, was perhaps the most successful of all economic appointees in the Bush administration, and has experience running a large organization.
My third choice would be former Clinton administration Treasury Secretary Larry Summers. Summers has the intellectual heft of the other two and Democratic credentials that might help him overhaul the bank from within with less opposition from the staff.
The final choice would be former Tennessee Senator Bill Frist [!!!]. Frist has been extremely active delivering aid that works to developing countries, and has the executive experience, and Teflon skin, necessary to take on the old guard at the bank...
It would be a lot easier, however, to take the money now devoted by the U.S. to the World Bank -- roughly $1.5 billion a year -- and use it to start a new aid organization from the ground up.
Feldstein...Hubbard...Frist? Needless to say, this is the most mind-bogglingly awful op-ed I've read in a while. Who's next from these guys? Ahmed Chalabi for World Bank chief?
