IT IS FAR more important to pass the IMF bill, in its revised and embroidered form, than to quibble about the quality of the embroidery. The bill would authorize the Treasury Department to lend another $8.4 billion to the International Monetary Fund. It needs the money to steady the world's system of trade and finance, now threatened by high interest rates and the great accumulation of debt in the Third World. Passage of the bill is urgently necessary, and the new restrictions do not alter that reality.
It's been an interesting week. It began with cheery assurances from the Treasury Department that it had the votes to pass the bill, and it pressed a dubious House leadership to proceed. By Wednesday it was unhappily obvious that Treasury was wrong, and the leadership pulled the bill back. Overnight the chairman of the Banking Committee, Fernand J. St Germain, drafted a substitute with a series of changes calculated to placate some of the opposition. It's a truly strange opposition, a coalition of populist right and populist left among whom the unifying sentiment seems to be a hostility to big banks.
The St Germain modifications would, among other things, hold up nearly a third of the $8.4 billion unless the Treasury could certify that it's needed to prevent an "impairment" of the international monetary system. With Brazil teetering on the brink of default, that condition may not prove difficult to meet. The more dubious amendments are the changes that the new bill would make in the American banking laws. Perhaps some of them are justified, but it would be a good deal wiser to deal with them separately after orderly hearings. This bill, incidentally, only authorizes the loan to the IMF; to add to the confusion, the appropriation is moving through Congress simultaneously.
Amid the great outpouring in the House of resentment against bankers and foreigners, congressmen might usefully recall where the Third World's debt crisis came from. It started with the leap in oil prices a decade ago. A lot of the OPEC money went into American banks, and a lot of Third World countries, desperately pressed by the high cost of oil, borrowed to keep their economies developing. The debts were not unmanageable until the end of the 1970s, when interest rates soared. Before you repeat the line about Brazil's having borrowed too much, think for a moment what those loans bought--among other things, longer life expectancies and a lower infant mortality rate.
If infant mortality rates don't concern you and you seek a more practical reason for supporting the IMF bill, you might observe that last year--not a good year --Brazil spent $3.4 billion on exports from the United States. Latin America altogether spent $30 billion. Those are customers that would not easily be replaced. If the IMF runs out of resources and any of them slide into bankruptcy, you can safely say that things won't be the same in this country--many things, starting with the American unemployment rate.