Pray for South Korea, Greenspan, Rubin & Summers Jude Wanniski Christmas 1997

Memo To: Website browsers, fans, clients
From: Jude Wanniski
Re: The War Against South Korea

The Prince of Darkness is inhabiting the home of our friends in South Korea, the same friends we saved from being swallowed up by the Evil Empire of communism almost a half century ago. Now the Prince of Darkness -- who comes from that world where ignorance is a weapon of mass destruction --has declared war on South Korea. Unlike the communists of Pyongyang, this Evil Empire has succeeded in occupying the country. It comes in the form of the International Monetary Fund, headed by the man we have identified as the most evil and dangerous in the world, Michel Camdessus. Korea had managed to avoid the worst of the poisons spread through Southeast Asia by Camdessus and his serial bureaucrats, but as soon as word reached Seoul in November that President Kim Young Sam might consider aid from the IMF, the Korean currency, the won, went into a tailspin, immediately followed by a crash of the stock market. When the markets became so wildly discouraged that Kim Young Sam said he had no choice but to ask the IMF for money to stabilize the won and agree to its evil conditions, his popularity among his people sank to an all-time low. This news came amid reports that the proud Koreans were awash with shame for their nation’s predicament. One prominent businessman each day was committing suicide, and that old women were contributing their wedding rings to the government to help it support the currency. In last week’s elections for President, Kim Dae Jung, a 71-year-old man who seemed to have as much chance of winning as Ross Perot, promised that if he were elected he would review the IMF’s conditions. The won, which had been stable at 900 to the dollar in mid-October and had swooned to 1700 to the dollar on December 12, immediately rallied to 1400. The stock market, which had been at 650 in October and dove to 350 on December 12, rallied to 420.

Then, late last week, Kim Dae Jung won the presidency. Immediately upon news of his election, the Prince of Darkness closed in on the 71-year-old man, telling him that he had made a grave mistake in questioning the austerity conditions of the IMF. Kim Dae Jung retreated from his campaign promise, saying the crisis was worse than he thought it was. The markets renewed their downward spiral and suicides in Seoul renewed their upward spiral. The stock market is back to 350 and the won has sunk to an all-time low of 1852 to the dollar. An unnamed official of the U.S. Treasury, whose initials we suspect are “L.S.,” told the New York Times that Kim Dae Young “has to be taught how to speak to the markets,” by which he means with forked tongue. The situation has become so dire that the Seoul government has now asked its people to stop buying things, in order to increase their savings rate, as called for in the IMF manual. Mr. Camdessus, who rarely emerges for public appearances from his subterranean office on 19th Street in Washington, DC, came with his forked tongue to the Jim Lehrer "NewsHour" on public television recently and told of the Korean government’s need to balance its budget.

At the same time last week, the Republican congressional leadership was having a weekend retreat to ponder its responsibilities in the world. They agreed to hear about the problems of Asia from a delegation led by Treasury Secretary Bob Rubin, an aide with the initials L.S., and a man named Alan Greenspan, who has forgotten almost everything he knew about the way the world works in the past several months. They were accompanied by a former Senate poet from Maine, William Cohen, who is now the Defense Secretary. The purpose was to persuade the Republicans to agree to give another several billion dollars of US taxpayer money to the IMF, as before the holiday recess, the Republicans had been coy about it. The Treasury Secretary and LS want the money because the money is used to compensate the big banks in New York for bad loans in poor countries, and the IMF and Bob Rubin represent the big banks. Now they brought their big guns, Greenspan and Cohen. Greenspan told them it was a good thing for them to give the IMF lots more money. Cohen told them that they had better give the IMF lots of money, or South Korea would become so weak, that North Korea would invade it, and blah blah. As far as we can tell, the Republicans sat their traumatized. They don’t want to cause the loss of South Korea to the last real communists on earth.

The only really promising thing that happened this week, folks, is that Jack Kemp could stand it no longer, and put out a press release at Empower America calling for the resignation of the Prince of Darkness, Mr. Camdessus. Kemp had issued a similar statement during the Mexico peso crisis, when the Camdessus team egged Mexico into peso devaluation that further impoverished most of 90 million Mexicans. Of course, nothing happened back then, and nothing might happen now with Kemp’s renewed call for a change in policy and personnel at the Evil Empire. But it is something. It was also nice to see Steve Forbes last Sunday denouncing the “witchdoctors” at the IMF, and presumably he will second Jack’s direct appeal for action on the personnel front. Nothing will change as long as Camdessus and his sidekick, Stan Fischer, are in charge.

In the NYTimes this week, Fischer is quoted as saying the IMF can’t be responsible for all these currency problems, because money is flying around faster than they keep track of it. Someone should ask him about why taxpayers should give him another several billion on top of the zillions already down the drain, if he can’t keep track of the flying dollars, which are supposed to be floating peacefully. House Majority Leader Dick Armey, who has a Ph.D. in economics and who attended the meeting when the Pentagon’s Poet Laureate warned of a new war in Korea, might consider reading up on all this so he could have an opinion. So far he has been silent.

That’s something to add to your prayers this Christmas weekend. Rocks should be turned over and light allowed to fall on places where it has not reached since 1944. Korea could be easily fixed, appreciating the currency by making it scarce, cutting the 50% capital gains tax or wiping it off the books altogether, as there will of course be no capital gains for a long, long time anyway. The second Korean War of our time is being fought. We won the last one. Pray we can pull this one out.