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IMF Chief's Rape Arrest: How a Leadership Vacuum Could Affect Millions

By Heather Boushey, Ph.D.

Like most people, I was stunned by the arrest of IMF President Dominique Strauss-Kahn for allegedly raping a hotel maid. This is a sordid tale: A powerful and wealthy man is accused of assaulting a hotel worker who, it should be noted, was a union member and therefore had access to more on-the-job rights than a typical hotel employee.

But, as an economist, I'm less interested in writing about the alleged crime (Mr. Strauss-Kahn has maintained his innocence and must be tried before we can make conclusions) than in exploring what the loss of Mr. Strauss-Kahn as the leader of the IMF would mean for working people worldwide. Because make no mistake: losing Mr. Strauss-Kahn as IMF president would be a terrible thing for working people.

The IMF is a powerful international organization. It helps to set the tone for what policymakers can-and should-do in terms of economic policy. Under Mr. Strauss-Kahn's leadership, over the past few years, the IMF has been a strong advocate for sound economic policies to pull the world out of the Great Recession. They pushed, for example, for more economic stimulus than did other institutions. Stimulus has been important for stopping the hemorrhaging of jobs here in the United States, but the lack of commitment to this policy is leaving unemployment unacceptably high.

Mr. Strauss-Kahn has also argued (as have his researchers inside the IMF) that high income inequality is incompatible with stable economic growth. On April 13, 2011, in a speech at the Brookings Institution, he said, "Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF's mandate." This is not the kind of rhetoric that the IMF has historically been known for and was welcomed by many.

The IMF's blog post on the April speech concludes with the following quote from Strauss-Kahn:

"Strong social safety nets combined with progressive taxation can dampen market-driven inequality. Investment in health and education is critical. Collective bargaining rights are important, especially in an environment of stagnating real wages. Social partnership is a useful framework, as it allows both the growth gains and adjustment pains to be shared fairly."
Assaulting an individual hotel worker is certainly a crime. Pushing policies that raise unemployment and constrain gains in the standard of living for millions of low- and moderate-wage workers around the world, however, should also be a crime. The latter is an area where Mr. Strauss-Kahn has a strong track record of doing good.


Heather Boushey is Senior Economist at the Center for American Progress. Her research focuses on employment, social policy, and family economic well-being. Much of her current work focuses on the Great Recession's impact on workers and their families, as well as policies to promote job creation. She co-edited The Shriver Report: A Woman's Nation Changes Everything (Simon & Schuster ebook, 2009).
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