IMF Legend Michael Mussa: Wolfowitz Should Resign


In international finance circles, Michael Mussa is a legendary figure who used to work at the thin air levels at the International Monetary Fund. For those interested, Mussa’s story is in one of the few real page-turners on international finance I have read, The Chastening: Inside the Crisis that Rocked the Global Financial System and Humbled the IMF by Paul Blustein.
Mussa is judicious, non-partisan, and seriously respected. He articulated yesterday what most think about World Bank President Paul Wolfowitz’s situation — whether they blame him or not for various misdeeds.
From Bloomberg:

“The way he can make the strongest contribution to the bank is by resigning,” said Michael Mussa, a former chief economist at the International Monetary Fund and now a fellow at the Peterson Institute for International Economics in Washington. “When you get to that stage, it doesn’t matter how you got to that situation.”

I have no inside information on whether Wolfowitz will resign tomorrow or Friday — but nearly everyone engaged in this game thinks Wolfowitz can’t win at this point — particularly after the White House essentially washed its hands of his fate yesterday.
If I were advising Wolfowitz — since his press advisor Kevin Kellems is on his way out — I’d encourage a late in the day resignation on Friday just to sidestep much of the news cycle and catch the weekend shows off guard. That’s not what I want — but a smart player would play a bad hand that way.
— Steve Clemons


12 comments on “IMF Legend Michael Mussa: Wolfowitz Should Resign

  1. David G. Stahl says:

    Any chance you’d do a piece explaining the politics of the World Bank appt. My simple reading from Harrisburg:
    Europe never liked Paul W.
    Paul W ignored Europe’s concerns
    Staff at Bank didn’t like Paul W’s management
    Investigation/Problem crisis occurs
    Europe considering a non-US head of World Bank
    Negotiations now are whether US heads bank
    – Paul W no longer in the picture
    Again I see this as classic WH defending a privilege – President of the World Bank – too carefully means you create a political/diplomatic mess and weaken the priviled – ability to name President of the World Bank.


  2. Carroll says:

    Posted by Kathlkeen at May 9, 2007 02:09 PM
    That works for me.


  3. Kathlkeen says:

    I wonder too and am profoundly disgusted with both parties and their mincing around the issue for the most poltically advantageous option while others are being blown to bits.
    If Dems compromise on this funding, they will letting the repugnicans have their cake and eat it too. Come September, they can campaign on the fact that they gave Busholini’s Surge a chance. If it ‘works’ they can take credit. If it fails, they can end the funding and take credit for that too.
    I’m all in favor of a citzen’s arrest type extraordinary rendition of the big bad Wolfowitz.


  4. Punchy says:

    Mr. Clemons, with all due respect…If you’re going to microanalyze Tony Snow’s comments, then I’ll do the same. From today’s presscon:
    “White House press secretary Tony Snow on Wednesday sought to debunk any notion that President Bush’s support for Wolfowitz had weakened. “We still support him fully,” Snow said.
    Snow on Tuesday had referred most questions about Wolfowitz’s future to the World Bank and to the Treasury Department. But on Wednesday Snow said that shouldn’t have been read as any wavering of support for Wolfowitz. “This is not hanging Paul Wolfowitz out to dry,” he said.”
    Check out the last sentence in each paragraph. Now tell me again that Wolf is going soon, and/or will go quietly without a fight. Are you still as adamant?


  5. Sandy says:

    I wonder how many young people died in Iraq today? I wonder how many were maimed for life? I wonder about their families. I wonder about their pain. And sacrifice.


  6. wufnik says:

    I agree with David N. Much of the discussion surrounding this issue–and similar ones, like the Boton UN appointment and the current Gonzalez disaster–grow from the assumption that somehow the issue is that the wrong guy got appointed, and that the problem gets solved by getting a different guy in there. I think, unfortunately, it’s a deeper problem–Bush does not understand, respect, or care about these organizations. He, like Cheney (who does understand what these organizations are for) holds them in contempt. And Paulsen can shout and wave his hands all he wants–Bush really does not care if this situation compromises the World Bank. 20 more months…


  7. Carroll says:

    I think Steve is right…Snow’s
    “understatement” means they won’t fight over Wolfowitz.


  8. Pissed Off American says:

    You mean he is “on his own” as far as the WB business goes. The White House does not wash its hands of the criminals it has tasked to advance agendas. Instead, the White House rues the exposure of its criminal machinations, and simply shifts its players to other positions, in or out of government. Wolfowitz’s future is not damaged at all. He will simply ooze slime on humanity and ethics from another posting or position. These people aren’t going away, voluntarily, or through forced conditions.


  9. David N says:

    The Mussa comments — and others — start from the premiss that Wolfie will act in the best interest of the Bank.
    We know that’s not the case. Wolfie has somehow become convinced that he is the center of the universe, when all right-thinking fascists know that Bush is. Thus the WH non-endorsement endorsement.
    I tend to buy the premise that Wolfie is holding out to June 1, when he can get his $400,000 buy-out, and will then leave to take up a position at a right-wing holding cell — I believe the standard term (using words that mean, of course, the opposite of what the thing does) is “think tank,” where he will produce a book blaming everyone else in the universe for his problems, and get paid millions to do so.
    The only thing I look forward to is his appearance on The Daily Show, though, given how Stewart caved during Tenet’s appearance, even that is not so much.


  10. Steve Clemons says:

    Folks — perhaps I could have used a more tilted article to link to. But make no mistake, Tony Snow’s comments that said that the President was not going to personally weigh in and would let World Bank processes proceed without interference was designed to lower expectations and diminish White House vulnerability if Wolfowitz is shoved out the door.
    After being one of those who helped wage the Bolton battle, these kinds of messages from the White House and the change in tone of the President’s support is extremely important.
    You may not be convinced by my suggestions here — but I can practically guarantee that Wolfowitz understands what Tony Snow’s words meant. And that meant that Wolfowitz is now on his own.
    — Steve Clemons


  11. Robert M. says:

    Well, the OVERALL tone of the article certainly supports your view, Punchy. The overtly supportive statement is from Cheney, while the WH release by Snow is not as strong. I think its in two places one can read a Friday PM exit, though maybe a late Sunday evening exit so as to avoid all the talk shows & make it old news by next weekend.
    Its that Paulsen is said to have asked for just enough time for a proper response and that deadline is Friday, which leads me to suspect a Saturday review & then a Sunday ultimatum.
    Also, notice the comment about Rove, which in effect says that Bush’s voter-counter/producer says the Europeans have the votes and now the will-power. Quietly astouding!!
    Which of course from a normal IR position is a stupid place to put the US’s interests in this matter. But as this is NOT about US interests but rather the B/R/C Power Drive, who knows what the outcome will be in the short term?
    Looks like Paulsen is walking his own tight rope with the Euros and with the WH. Left to his own devices as a Wall Street man, he’d have canned Wolfie, but the Neocon tangled web of deceitful relationships has trumped yet another power player.
    Hhhhhmmmm. I think what Steve is suggesting is what Paulsen and general observers want. Muzza’s statement should be the nail in the coffin, but with the B/R/C crew it isn’t over until stakes are driven through their hearts. So all for reasons even Machiavelli would have found inexpliable, if not outrightly stupid, this American government is going to endure its first Iraq-related defeat–over ousting and replacing the head of the World Bank.
    They’re just doofuses now (albiet dangerous ones). Paulsen himself should resign on principle–but won’t unless we spell it principal.
    I’ll take the turf accountant odds that Wolfie is STILL in place a week from now.


  12. Punchy says:

    I fail to see how your link is “washing their hands”. Paulson had the very opp to openly and clearly call for Wolf to step down. Instead, he called for more infighting, more dissention, and more controversy. He emboldened Wolf’s hothead lawyer to make even more ridiculous and embarrassing claims. And Bush himself has likewise refused to ask for Wolf’s resignation, at least publically.
    I must dispute your opinion that the WH is “washing hands”; no, instead, they are stirring up the already muddied water, hoping everyone will lose their sight and focus, this will drag on a few more weeks, and Wolf keeps his job. Am I reading this wrong?


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