In the midst of the greatest economic downturn since WWII and an embarrassing sexual assault scandal involving its previous managing director, the International Monetary Fund announced that it will give its new boss a raise.
Christine Lagarde, who took over the reigns at the IMF yesterday, will earn $467,940 per year plus a $83,760 allowance. Notably, this salary is up almost 6 percent from the $441,980 per year that former IMF chief Dominique Strauss-Kahn used to make — and significantly more than the $400,000 salary earned by the U.S. President.
Ironically, the IMF justified Lagarde’s raise as “reflecting a rise in the cost of living.” Yet workers in countries ‘bailed out’ by the IMF have experienced vastly greater increases in their cost of living without any form of wage compensation.
Indeed, their living standards are rapidly plummeting as the IMF calls on countries like Greece, Portugal and Ireland to cut public sector wages across the board. Greek wages, for example, have already been slashed 15-20 percent.
Just to put this in contrast, the average Greek worker, say, a waiter in a restaurant, made some 727 euros net per month in 2008 on an average work week of 47+ hours (much less today, I just can’t find more recent figures). Excluding her benefits, Lagarde makes over 53 times that amount.
Also, while the IMF has forced these loan ‘beneficiaries’ to raise both income taxes and VAT, Lagarde herself will benefit from America’s negligible sales tax and won’t have to pay any income taxes over her salary.
Moreover, while the IMF has launched a head-on assault on so-called “overly generous” pension schemes in countries like Greece, Lagarde will receive benefits that most European or American workers couldn’t even dream of, including a generous pension arrangement and a lifelong annual retirement supplement.
All in all, this situation reveals a number of painful truths about our world today. First, it amply reveals the enormity of the chasm between the technocratic elites in charge of economic policy and the average people affected by their decisions.
But secondly, and this is even more troublesome, it reveals the subsumed truth behind the global financial crisis that we are not all in this together. As David Harvey correctly pointed out in a recent interview, “the rich are getting richer while the poor are getting poorer.”
Austerity, in other words, is not about everyone tightening their belts in order to collectively overcome the crisis we face. In truth, austerity is about siphoning wealth from the lower rungs of the social ladder to the top.
It’s the greatest bank heist of the century, and it’s the bankers who are doing the robbing — with their smiling and well-spoken accomplices in the finance ministries, central banks and IMF right by their side.