At a press conference today in Tokyo, acting International Monetary Fund Managing Director John Lipsky was practically buoyant about several of the major challenges facing the international economy. Washington may be roiled by the gloomy jobs news, but Lipsky backed up Fed chairman Ben Bernanke's forecast that the current slowdown in U.S. economic growth is temporary and that no new stimulus package is necessary. "Our expectation is current U.S. monetary policy is consistent with a return to moderate growth." Meanwhile, Lipsky radiated confidence about the Greek debt imbroglio. "We're quite confident of the design of the program and the intentions of the Greek authorities to implement it fully."
It's always hard to know what to make of IMF proclamations like these. If Lipsky were truly concerned about recent developments -- let's say he thought that a double-dip recession in the United States was a strong possibility or that the European debt crisis was reigniting -- would he ever say so publicly? Not only would the IMF's top shareholders be livid if he did, but airing that concern publicly might impact the markets and consumer confidence, thus making a downturn more likely. Of course not speaking publicly about a looming economic crisis may later open the IMF to the charge that it missed the boat and failed in its principal mission, just the sort of charges made by a recent internal investigation of the IMF's role before the 2008 crisis.
David Bosco reports on the new world order for The Multilateralist.