Reforming Global Finance - Essay Example

The stability of the global market destabilized to an extent that the economy of the rest of the world, including Thailand, Indonesia, Philippines, and South Korea went into economic meltdown. This was so severe that it called for the intervention of the humanitarian groups, like Jubilee 2000, who advocated for the cancellation of the debts owed by the poorest countries. The Central bank decided to chip in and try to resolve the situation therein. They worked for 24hours just to see the thing go back in order.

Hazel introduces John Perkins, who is an economist and the author of “Confessions of an Economic Hit Man”, to discuss the history of economic theory and his involvement in the manipulation of the financial organizations like the world bank and the International Monetary fund (IMF). Perkins says that, during the past decades when ‘hot money’ was in circulation, he was actually seduced into luring the poor countries who had huge debts into further debts (Henderson, Perkins, Rogoff, & Fukuda-Parr, 2005).

This was purposed so that these countries would hold to the government policies of the United States. For instance, Indonesia became a victim when the United States loaned it billion of dollars, which was later taken by the US in the name of building for them projects back in the US. They continued paying back the loan with the huge interests until they could no more. This left Indonesia with a huge debt that they would never repay logically thus holding on to the US government. Therefore, this gave the US a chance to manipulate the Indonesians by fetching resources their country such as oil.

Finally, Perkins confesses that whatever he was asked to do was technically politics and not assisting the poor countries to get out from their poverty (Henderson, Perkins, Rogoff, & Fukuda-Parr, 2005). I think this was an unfair way of trying to control the entire world. The US government went overboard in trying to exercise their superiority. Professor Kenneth Rogoff, who is the chief economist at the IMF, suggests that instead of giving out loans the US government would have given the underdeveloped countries grants.