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Jeffrey Sachs on anti-China hysteria

Summary:
Here’s Jeffrey Sachs in the FT: Georgieva is receiving McCarthyite treatment of the kind for which Washington has been notorious in the past. President Joe Biden’s administration, counting votes in a closely divided Congress, looks on with wariness, not wanting to pick more fights with Republicans and anti-China Democrats. Those anti-China forces hope that by making enough noise, all will conclude that “for the good of the institution”, for peace and quiet, Georgieva must go. Pundits will add weighty nods of approval. Such an outcome would be a dangerous and costly capitulation to anti-Beijing hysteria. The American right in particular is overtly trying to undermine the multilateral system. In the minds of many in Washington, either the US runs a multilateral institution

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Here’s Jeffrey Sachs in the FT:

Georgieva is receiving McCarthyite treatment of the kind for which Washington has been notorious in the past. President Joe Biden’s administration, counting votes in a closely divided Congress, looks on with wariness, not wanting to pick more fights with Republicans and anti-China Democrats. Those anti-China forces hope that by making enough noise, all will conclude that “for the good of the institution”, for peace and quiet, Georgieva must go. Pundits will add weighty nods of approval.

Such an outcome would be a dangerous and costly capitulation to anti-Beijing hysteria.

The American right in particular is overtly trying to undermine the multilateral system. In the minds of many in Washington, either the US runs a multilateral institution or should leave it. Under President Donald Trump, the US left the Paris climate agreement, the World Health Organization, Unesco and the UN Human Rights Council. For the unilateralists in Congress, and there are many, the US must control the World Bank and IMF.

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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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