The Truth Talker

By Dickey, Christopher | Newsweek, January 30, 2012 | Go to article overview

The Truth Talker


Dickey, Christopher, Newsweek


Byline: Christopher Dickey

As head of the International Monetary Fund, can Christine Lagarde steer Europe and America away from the brink of the next Great Depression?

Friday the 13th of January dawned grim at the International Monetary Fund in Washington, D.C. The news blowing in from across the

Atlantic, as often happens these days, brought the smell of disaster like an approaching

hurricane. The credit scores of France and eight other European countries had just been knocked down. Negotiations to bail out an

all-but-bankrupt Greece had stalled, or died--

it wasn't clear which.

At a meeting that morning, the fund's board heard that European countries were not doing the maximum necessary to stave off a financial implosion that could suck the life out of America's anemic recovery and bring Western economies again to the brink of recession, or worse.

Christine Lagarde, the former French finance minister who has been at the top of the fund since last summer, sat at the head of the oblong ring of seats in a conference room lined with portraits of past IMF managing directors, all of them men. (Her immediate predecessor, Dominique Strauss-Kahn, resigned in the midst of a sex scandal last May; his painting has yet to be put up.) Lagarde listened calmly as the 24 representatives of 187 different countries took in the bleak news, delivered by one of her key aides. Good, she thought. The staff, which has its antennae everywhere, told what the whole truth is. From her point of view, that made it a positive meeting. "Telling truth is our job," she said. There is still time to prevent a second collapse, she believes. But not much time.

Lagarde's mind was already turning to the speech she will deliver in Berlin this week, warning of dire consequences if Europe, America, China, and others do not find better ways to work together to stabilize the world economic system. Nobody at the fund wants to use the phrase "global depression"; instead, they talk about a "defining moment" or a "1930s moment." But everyone knows what they mean: massive job losses, political unrest, chaos. While Europe is the epicenter of the crisis right now, fund analysts are also looking hard at the U.S., volunteering advice on how to reduce the burden of mortgage debts on homeowners (the IMF suggests bank write-downs) and criticizing the partisan impasse in Congress that has sent repeated shocks through the world economy.

The IMF claims it can chart the way out of the crisis, but the price is high and Americans, especially, are likely to balk. Among the fund's goals: the creation of a "global firewall" of almost a trillion dollars to protect faltering finances. That would nearly triple the amount of money the IMF has on hand, but it still might not be enough, according to many economists. While Lagarde says she is generally optimistic that the Americans will support the idea, few observers think that would translate into cash contributions. A Treasury official said flatly last week that the United States has "no intention to seek additional resources for the IMF."

Lagarde, in an exclusive interview with Newsweek, is blunt about the consequences if the world continues to ignore the risks: "loss of confidence that will affect investment decisions, affect employment creation, affect volume of trades" that would hit everywhere, including the U.S. "We had better make sure that we have the buffers and we have the defenses, and that we have built reserves, so that we can resist."

Until recently, IMF managing directors were virtually anonymous. But Lagarde has become the woman of the moment, the iron lady of the global economy. She is not an economist, and she has never been elected to political office. Her greatest skills, according to those who work closely with her, are her ability to listen, to assess, to pull together a strong team, and to get the best out of a tough situation. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Truth Talker
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.