Malpass May Emerge As Trump’s Anti-Socialist Point Man
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Could David Malpass emerge as the point man of President Trump’s campaign against socialism? The thought occurs to us as the economist prepares to accede to the presidency of the World Bank. Mr. Trump’s formal announcement of his plan to name Mr. Malpass to the post took place the day after Mr. Trump, in his State of the Union speech, laid down his marker in respect of socialism.
The context in which Mr. Trump brought up socialism was Venezuela. The president didn’t give a monograph on the impoverished oil-rich country. The president did, though, ascribe to the regime’s “socialist policies” blame for having “turned that nation from being the wealthiest in South America into a state of abject poverty and despair.”
Then Mr. Trump warned of creeping socialism here at home. “Deftly” is the word a dispatch in the Hill newspaper used to describe the way the president juxtaposed the two. It “created an immediate public split among Democrats that was caught on live television.” Senators Schumer, Stabenow, Manchin, Tester, and Brown joined a standing ovation with Republicans. Other Democrats, not so much.
What an opening for Mr. Trump, what an issue for a sage like Mr. Malpass. He understands the economic problem down to the ground — that the biggest problem the developing world faces, the biggest problem poor countries face is socialism and the lack of a system protecting property rights, sound money, market prices, and a system of independent courts to enforce laws.
No doubt Mr. Malpass is going to face hostility, as the Wall Street Journal predicted in a classic editorial called “Mission Impossible.” Two days later, the London Financial Times trundled in with an anti-Malpass editorial that could have been written by Congresswoman Ocasio-Cortez or Jeremy Corbyn. The FT editorial is less important than symptomatic of the problem Mr. Malpass faces.*
Oddly, the most far-sighted suggestion any World Bank president ever made was issued in the FT by Robert Zoellek, who said it was time that some kind of role for gold be restored to the international monetary system. The FT seemed to have been horrified at what it had printed; it promptly turned around and attacked Mr. Zoellek for remarks it had given him space to make.
We mention that because Mr. Malpass would be the first World Bank president since Mr. Zoellek who gets the stake emerging market countries have in monetary reform. Mr. Malpass made this clear in his own article in the FT, where he spoke of the importance of “best practices” for encouraging growth. He named lower taxes, fewer regulations, and “stable currencies.”
The one combination that’s never been tried at the World Bank is the combination of an American president with the crust of Mr. Trump and World Bank prexy with the attachment to the key principles that Mr. Malpass has long displayed. Last we checked, there were no active World Bank loans in Venezuela. If the Bolivarian Republic can bring in a free and democratic government, Mr. Malpass might find an inspiring partner.
*The FT faults Mr. Malpass for being “blithely confident about the strength of the US economy in 2007 — a year before the global financial crisis.” It neglects to mention, say, Ben “the crisis came from causes not captured by the new Keynesian models used at the Fed” Bernanke and Janet “I wouldn’t have seen it in the data” Yellen.