What kind of a socialist is Strauss-Kahn?

Before his arrest in New York City on charges of attempted rape of a hotel maid, Dominique Strauss-Kahn was considered the front-runner for the Socialist Party’s nomination for President of France.

Socialism historically has been a movement against economic injustice and in favor of greater economic equality.  Socialists claim to represent workers in their struggle against the economic elite.  How does Strauss-Kahn fit into this historic tradition?

Strauss-Kahn entering friend's Porsche

According to Forbes magazine, Strauss-Kahn’s lawyer said his bank balance is in the “low seven figures.”  He was paid roughly $420,000 as managing director of the International Monetary Fund, and got an additional $75,000 to maintain a style of life appropriate to his position.  He and his third wife, Anne Sinclair, an heiress and TV personality, have economic assets estimated by Forbes as worth $100 million to $200 million. Most of this is the art collection of Sinclair’s grandfather Paul Rosenberg, an art dealer who represented Picasso, Matisse and Braque.  This estimate does not include more than $90 million worth of art she’s sold over the years.

Strauss-Kahn and his wife live well.  He and Sinclair own a house in the Georgetown section of Washington, D.C. (which is headquarters of the IMF), not one but two luxury apartments in Paris, and a traditional Moroccan house in Marrakesh.  The houses have a combined value of $15 million, according to Forbes.

Strauss-Kahn’s wealth is small change compared to the wealth of the world’s billionaires, but it is a lot by most people’s standards.  Political opponents call him a “caviar socialist.”  There was an uproar when he was photographed getting into a friend’s $140,000 Porsche earlier this year.

He and his wife of course have a right to spend their money as they choose.  The question is whether someone who is (literally) wedded to great wealth can understand and champion the interests of working people.  His record in French politics and as managing director of the IMF help provide answers to that question.

Named  minister of economy and finance in Lionel Jospin’s socialist government in 1997, Strauss-Kahn pushed for privatization of government-owned industry, lower taxes and lower spending, sometimes at odds with Jospin.  He was forced to resign in 1999 over charges that he pocketed money from a university students’ fund administered by the Socialist Party, and pre-dated documents to make it appear his actions were legal; he was acquitted after a lengthy trial.

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He remained popular in his party, and, in 2008, he was named managing director of the International Monetary Fund.  The IMF’s mission is to lend money to governments in financial crisis to tide them over; in practice, it insists on cutting back on schools, clinics and other public services, allowing prices to rise and wages to fall, and holding taxes down – all practices which make existing conditions worse.

Strauss-Kahn made speeches about allowing governments to promote economic growth (provided the loans are paid back); the IMF did suspend loan repayments for Haiti after the earthquake and some other countries in similar crises.  But for the most part, his administration was the same IMF as before.  An independent study of 41 IMF loans during the crisis said that 31 out of 41 were “pro-cyclical” – that is, they made the existing situation worse.

Going into the coming election, the French Socialist Party’s platform calls for construction of public housing in order to create jobs, creation of an industrial development bank to lend money to businesses in depressed areas and doing something (unspecified) about youth unemployment.

Strass-Kahn reminds me of the elite liberal Democrats in the United States.  They associate more with the financial and governmental elite than with the working people they claim to represent, and they have lost confidence in the things they say they believe in.

Click on Just How Rich  Are Dominique Strauss-Kahn and His Wife Anne Sinclair? for an estimate of the couple’s wealth by Claire O’Connor, who tracks the world’s billionaires for Forbes magazine.

Click on Dominique Strauss-Kahn’s lavish life for comment by Annie Lowrey on Slate magazine.

Click on IMF-Supported Macroeconomic Policies and the World Recession: A Look at Forty-One Borrowing Countries for an analysis by economists of the impact of the IMF’s policies.

Click on The IMF after DSK for analysis by Mark Weisbrot of The Guardian in London.  Weisbrot argues that Strauss-Kahn wanted to pursue more enlightened policies, but was thwarted by the IMF’s governing board.

In a way, the IMF has had a positive effect in a way that it didn’t intend.  The leaders of many developing countries, seeing the consequences of IMF lending policies, have accumulated hard currency reserves to tide themselves over during economic downturns, and also arranged to help each other out so they won’t have to go to the IMF.

Click on Could Dominique Strauss-Kahn Run France? for political analysis by Newsweek before the scandal.

Click on Strauss-Kahn and the European Left for analysis by Robert Kuttner, co-editor of The American Prospect magazine.  He thinks Strauss-Kahn is aligned with an economic elite that is responsible for the current crash.

I can see how people in France, especially the socialists, would be upset over one of their leading politicians being arrested in New York City.  Imagine, for example, Bill Clinton being arrested on similar charges in Paris in May, 1992!

Click on Dominique Strauss-Kahn: The Collision of American Justice and French Conspiracy Theories for thoughts on the French reaction by Paul Berman of The New Republic.

[Update 12/3/11]  The full story of what happened is not known, and may never be known.  Click on What Really Happened to Strauss-Kahn? for Edward Jay Epstein’s report on unsolved mysteries in the case.  Both the accused and the alleged victim behaved in ways that are hard to explain.

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