Archive for April 2017

Birch Tapping Update   2 comments

Image result for image of birch sapI had a few requests to update our progress on tapping birch trees. The sap finally started running last week and Brad put in all the taps and 20 collection buckets on Monday. He had three trees that didn’t produce anything – two of those are now giving trickles. That’s evidence that they are in colder or drier soils than the others. They just may be late producers. He also has three trees that are producing 3-4 gallons of sap a day. Apparently, this isn’t miraculous, but it is rare.  We’re taken between 16-19 gallons every day.

Birch sap looks like water and tastes like fruit-infused water.  There is a very light floral taste sort of like green birch leaves smell. Members of the cooperative say they make coffee and drink the sap. They really tout the health benefits, so Brad has been doing it too. On Tuesday, he gave me an 8-ounce glass of it.  He seemed curiously animated that night, full of overblown ideas and optimism. I had a couple of creative ideas for my latest novel, so I wanted to write, but he kept popping in to tell me this latest “great idea”. I sort of wanted to put duct tape over his mouth. I also needed to pee twice as often and in twice the volume of normal. I had gas too.

Image result for image of birch sapThe next morning, my toothpaste tasted like birch. So did my toast, my coffee, my lunch, and my dinner … and my lips. I drank two water bottles in the afternoon and the tap water tasted like birch. Still had the eliminatory effects and even my sweat tasted like birch. Brad, who is drinking a great deal more than I am (alcoholics, even in recovery, don’t have a normal on-off switch like other people) reported the same thing. That lasted about 40 hours and was becoming distressing. On Thursday, my toothpaste, coffee and drinking water tasted like birch, but food (well, the curry leftover from the night before that had tasted like birch) was starting to taste normal again. I didn’t drink any birch water on Wednesday and I drank a coffee cup each (about 4 ounces) on Thursday, Friday and Saturday. Everything now tastes normal again. This is similar to what I’ve heard from people who have used coconut water for cleansing, so I think it was probably fine. I might try an 8 ounce glass today.

I’m hungrier than normal and I seem to have more energy (but that could just be the effects of spring). Last night, I sweated a ton even though I’d showered, so I had to shower this morning, which is unusual for me. So, I do think it’s probably doing somethng. It’s really high in Vitamin C, the research says.

And we’ve now given 45 gallons of birch sap to the cooperative and Brad has made some great contacts for the future.

I’ll let you know how it’s going next week as birch sap harvest goes for 2-3 weeks.

Posted April 30, 2017 by aurorawatcherak in Alaska

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Love the Sinner & Purge the Leaven   Leave a comment

In the first four chapters of 1 Corinthians, Paul introduced a shameful problem in the church whereby the Corinthians had proudly attached themselves to certain leaders whose teaching seems to disclose a “wisdom” not known or taught by other teachers, and certainly not by Paul or his fellow-apostles. These cliques and factions were undermining the unity of the church and were a denial of the gospel of Jesus Christ.

Image result for image of leavenPaul then turned his attention to other problems plaguing the church at Corinth. Both are pertinent to our own time.

Before we did into the Scripture, it should be noted that Chapter 5 is not primarily about the immorality of one church member. It’s more about the pride and passivity of the entire church in response to that sinner. Chapters 5-6 are all part of one discussion that should be read together. Unfortunately, that would be a huge blog post, so I’ll have to trust you to do it yourself. Chapter 5 introduces the matter of immorality and the obligation of the church to exercise discipline. Chapter 6 takes up the issue of Christians taking each other to law courts (verses 1-11), and then concludes with Paul’s teaching on immorality. Yeah, Paul viewed sexual immorality and lawsuits as similar.

It is actually reported that sexual immorality exists among you, the kind of immorality that is not permitted even among the Gentiles, so that someone is cohabiting with his father’s wife. 1 Corinthians 5:1

Paul had heard about this in Ephesus, which was many weeks’ travel away from Corinth. He expressed shock and dismay and hints that he may have heard about this from Gentile non-Christians. Paul was shocked that immorality was taking place in the church, and that it was such common knowledge that no one doubted it.

Scholars suggest this wasn’t the only immorality occurring in the church at Corinth. Paul dealt with the most egregious examples. On the subject of sexual immorality, Paul focuses on the specific instance of a son who was having sex with his father’s wife. This wasn’t a one night fling. The sin was still going on as Paul put pen to parchment. We don’t know if the father was still alive or if the woman was a professing Christian. Paul didn’t instruct the church to disfellowship the woman. His instructions are specifically for the man who was living immorally with his father’s wife, which would have certainly been forbidden by the apostles on Scriptural grounds (see Leviticus 18:8; Deuteronomy 22:30; 27:20, Acts 15:20, 29; 21:25). It was apparently considered taboo by the pagan Corinthians.

And you are proud! Shouldn’t you have been deeply sorrowful instead and removed the one who did this from among you? 1 Corinthians 5:2

Paul could no doubt have dealt with other cases of immorality that were acceptable to the Gentiles. While Paul was distressed by the actual sin of this one man, he was more disturbed by the sinful response of the church.

LISTEN CAREFULLY, modern church. Paul is talking to us!

Paul told the Corinthians that they had become proud (or arrogant) and were virtually doing nothing to correct this matter. Paul had already addressed their arrogance in the first four chapters of the letter. Now he draws a parallel with this case of immorality.

The Corinthians actually appear to be proud of this man’s sin. Remember that in the pagan religions of Corinth, immorality was practiced as a part of their heathen religious ceremonies. The Corinthians could have redefined the apostolic rules so that this sinful act was looked upon as enlightened Christianity. If you’re tempted to think this suggestion is groundless, I encourage you to read about the false teachers in 2 Peter and Jude and then take a look at some modern-day teachings on sexual immorality in the churches.

If they didn’t condone his sin, the Corinthians might have been proud of the “open and accepting way” in which they were dealing with his sin. Yeah, hello, 21st Century churches! In this therapeutic age when the church is often looked upon more as a “support group” than a “holy temple,” church members refuse to discipline members and continue to embrace sinning saints, even when it is clear they have no intention of repenting of their sins, and even when they publicly persist in their sinful ways.

Let’s face it – the Corinthians were proud and arrogant already. The sin within the church and their response to it were just symptoms. They took pride in their leaders, in their message, and in their methods. They took pride in their “wisdom,” a worldly sort that looked down on the simple message of Christ crucified and the apostles who proclaimed it. These Christians were so proud of themselves that they would not or could not acknowledge or act upon sins within the church that were public and undeniable. Their pride was the result of turning from the truth. Pride keeps one from seeing the truth. The Corinthians maintained an attitude of pride in situations that should have produced mourning.

Pride kept the church from expelling the wayward and willful saint rather than mourning what was taking place in the church and disfellowshipping this immoral man for his own spiritual good.

For even though I am absent physicallyI am present in spirit. And I have already judged the one who did this, just as though I were presentWhen you gather together in the name of our Lord Jesus, and I am with you in spirit,  along with the power of our Lord Jesus, turn this man over to Satan for the destruction of the flesh, so that his spirit may be saved in the day of the Lord. 1 Corinthians 5:3-5

Paul actually could have ignored this situation. He was a long way away and he could have pretended not to know, but he refused to do that. Paul might have been physically absent, but he was never spiritually absent. This was true not only of the Corinthian church, but of the other churches (see Colossians 2:5). Paul’s references to his prayers (see Romans 1:9; Ephesians 1:17; Philippians 1:3-5; 1 Thessalonians 1:2-3, etc.) and his personal knowledge of people in churches where he had never yet visited (e.g. Romans 16) are indicative of his spiritual presence beyond his physical local church. Many of the Corinthians were Paul’s spiritual children (see 4:14-16). He not only wrote to them, but he made every effort to obtain reports of how they were coming along. When word of problems in Corinth reached Paul, he didn’t allow his absence to keep him from doing the right thing. He was with these saints in spirit and so, while the Corinthians had not yet done anything to correct the situation, Paul informed them that he had taken action. He had already acted as though he were present. He had done what he would do if he were present and instructed to the Corinthians to carry out the kind of discipline Scriptures requires. (see Matthew 18:15-20; also Galatians 6:1-2, 2 Thessalonians 3:6; 2 Thessalonians 3:14-15; Titus 3:10-11).

If your brother sinsgo and show him his fault when the two of you are alone. If he listens to you, you have regained your brotherBut if he does not listen, take one or two others with you, so that at the testimony of two or three witnesses every matter may be establishedIf he refuses to listen to them, tell it to the church. If he refuses to listen to the church, treat him like a Gentile or a tax collector. 

I tell you the truth, whatever you bind on earth will have been bound in heaven, and whatever you release on earth will have been released in heaven. Again, I tell you the truth, if two of you on earth agree about whatever you ask, my Father in heaven will do it for you. For where two or three are assembled in my name, I am there among them. Matthew 18:15-20

That’s Jesus talking to His disciples, some of whom became the apostles. Jesus commanded the apostles to instruct the churches, so that church discipline would be an on-going practice throughout the history of the church. More than any other text, Matthew 18 spells out the process of discipline. Paul’s words in 1 Corinthians 5 closely parallel those of Jesus.

Church disciple in a process. Paul speaks of the final step in 1 Corinthians 5, referring to the full process spelled out in Matthew 18. Private rebuke one on one, followed by an elder confrontation, followed by the collective disfellowshipping from the congregation by the whole church. The reason Paul dealt only with the last step of this process in 1 Corinthians 5 is that the willful rebellion of the sinner was evident, and his sin had already become public knowledge. Discipline must be as public as the sin.

Church discipline is the obligation of the whole church. Paul wrote that he discipline process should take place “when you gather together.” Jesus instructed that, if the wayward individual did not repent following a private confrontation, the matter was to be told “to the church” (Matthew 18:17).  In the case of the immoral man in the church at Corinth, the matter had already become a matter of public knowledge. Jesus promises His special presence when such a gathering is assembled for discipline:

Church discipline involves the entire local church and its implications are church-wide. Paul called for the whole Corinthian church to be involved. Think about that. The Corinthian church was already divided into various factions that seemed unable to work together on anything. Church discipline should be exercised in unity. What an impossible task in a church that lacks unity, but Paul required the whole church to participate in this act of discipline. A elder of our long-time church suggested it was a “team building” exercise.

Paul strongly implied that church discipline should be exercised by all the churches. In our day of great mobility, we have many churches to attend. Someone who is under discipline usually finds it easy to simply attend elsewhere. I’m sure it would be scandalous to suggest that matters of discipline need to be communicated to other churches and that those other churches have an obligation to honor that act of discipline if the wayward party attempts to “move his membership” to that church. We might consider it rude, but it is Biblical that newcomers to any church should be interviewed to be certain that they are not under discipline elsewhere. Why? Because appropriately applied discipline is for the disciplined person’s own spiritual good.

Church discipline should be done in the name and power of the Lord. The church acts on behalf of God in carrying out discipline. The Lord’s presence is promised in discipline. The church acts on God’s behalf, and thus when we act, God acts as well (see Matthew 18:18-19).

Church discipline delivers the sinner into the power of Satan. Church discipline expels the wayward and unrepentant Christian from the church, from participating in its worship, and from fellowship with individuals or small groups of believers. In so doing, the sinning saint not only loses the positive benefits of being a part of the church body, but is placed in the very dangerous position of being vulnerable to Satan’s attacks. In Paul’s words, the one who is disciplined is “delivered to Satan” (see also 1 Timothy 1:20). Satan is a destroyer( see 1 Peter 5:8). When the church expels a wayward member, that person is given over to Satan, knowing that he delights in destruction. It is not a pretty picture and churches should not take it lightly. When we deliver a brother or sister over to Satan, we are simply giving the unrepentant Christian what he or she has chosen. To remain in sin is to be in the bondage of Satan (2 Timothy 2:24-26). To be disciplined is simply to hand that Christian over fully to Satan. Discipline confirms a choice the sinner has already made.

While Satan has the power to destroy the flesh, he doesn’t have the authority to destroy the spirit. Satan was given the authority to attack Job, but this authority had boundaries. Given God’s permission, Satan could do so much to Job and no more (see Job 1:12; 2:6). Satan does not have the power to spiritually destroy someone who is saved by the blood of Jesus Christ (see John 10:27-29; Romans 8:31-39; Matthew 10:28; Revelations 11:18).

It’s important to understand that church discipline is only for those who are Christians or profess to be Christians. Paul made it very clear in verses 12 and 13 that church discipline is for those who are inside the church, and not for those who are outside. The Lord makes the same point in Matthew 18:15, where He begins, “If your brother sins. …” The final outcome of church discipline is that a believer who willfully remains in sin is treated as a Gentile and a tax-gatherer (18:17). Association with the believer under discipline is to be terminated, but he is still to be regarded as a brother, and not as an enemy (2 Thessalonians 3:14-15).

Church discipline is not a final judgment that condemns a Christian to eternal hell. The goal is the sinning Christian’s repentance. Church discipline is to be exercised for the highest good of the sinning saint. Consequently, Paul made it very clear that “turning one over to Satan” in church discipline is not a final act of condemnation, but an action taken with a view to the wayward saint’s repentance from sin in this life. Discipline is as painful for those who must exercise it as for the one disciplined. It is an act of mercy that seeks the highest good of the wayward Christian. It is something Brad has had to endure and many of the insights in this series come from him.

Your boasting is not good. Don’t you know that a little yeast  affects the whole batch of dough? Clean out the old yeast so that you may be a new batch of dough – you are, in fact, without yeast. For Christ, our Passover lamb, has been sacrificed. 1 Corinthians 5:6-7

Paul wanted to be absolutely clear that the arrogance of the Corinthians was not good. Why not? Because it was destructive. We know deep down that it is harmful to the man living in sin. Paul showed us how destructive failing to deal with sin is to the church.

Paul turned his readers to imagery of leaven. If you’re unfamiliar with old-style baking, you keep a “mother loaf” of dough separate from the day’s break. You cut off some of that mother and use this tiny bit to change whole dough into something other that flour and water and oil. The sinner whom the Corinthians embraced and failed to put out of the church is likened to a little leaven placed in a lump of dough. If left there for long, it changes the whole batch of dough. If this sinner is allowed to remain in the fellowship of the saints at Corinth, he will contaminate the entire church. By removing this man from their midst, the church at Corinth not only seeks the sinner’s restoration, they also promote their own purity.

Paul fine tuned this leaven and loaf analogy, turning to a specific celebration in the Old Testament. Although his audience were Gentiles, they’d come to faith through the teachings of a Jewish rabbi. Paul reminded his readers of the feast of unleavened bread, which was to begin immediately after the Passover lamb was sacrificed:

So then, let us celebrate the festival, not with the old yeast, the yeast of vice and evil, but with the bread without yeast, the bread of sincerity and truth. 1 Corinthians 5:8

After the Passover was celebrated, the Feast of Unleavened Bread commenced. The Israelites were to go throughout their dwellings, seeking to find any leaven and remove it. They were to eat unleavened bread because leaven is a symbol of sin, and the Passover lamb was a prophetic foreshadowing of our Lord Jesus Christ. Paul called Him “Christ our Passover” (verse 7) and reminds us that He has been sacrificed. If Christ is our Passover and He has been sacrificed, what is to follow. In keeping with the Old Testament prototype, the leaven is to be removed Since Christ has been sacrificed, we are not to harbor sin in our lives, but to seek to identify sin and remove it. The Lord’s Supper is the Christian equivalent of the Passover Feast and acts as a reminder of what should follow the sacrifice of the Lamb—cleansing in the camp! The leaven in the Corinthian church (the camp) was this sinner. He must be removed. What better time and place was there than in the meeting of the church, where the Lord’s Table is celebrated?

Paul was not content to allow us to think that Christ’s atoning death, celebrated at the Lord’s Table, should only be applied to this man and his expulsion from the church. In verse 8, Paul broadened the application, indicating other forms of “leaven” which were all too evident in the church. The “old leaven” (this sinner who needed to be expelled) and the “new leaven” of malice and wickedness, must be put away. Malice and wickedness refers to that whole spectrum of “sacred sins” which are harbored and even nurtured in the church. They must go, and in their place there should be the “unleavened bread of sincerity and truth” (verse 8). Christians, individually and collectively, are to put off the hypocrisy and the false wisdom we have embraced and return to purity of motivation and of doctrine.

This blog post is getting too long, so I’m going to stop here and pick up next week. I suggest, however that you return to this lesson because really, next week’s lesson and this one are a whole.

Interesting Poll   Leave a comment

Something you might not recognize amid the fisticuffs happening on college campuses and the front steps of conservative think-tanks is that some people think the country is getting better.

Rasmussen polls asked people if they thought the country was headed in the right direction. It’s a question they ask several times a year. This week’s poll is an improvement over last week’s poll.

  • 42% of Likely U.S. Voters think the country is heading in the right direction

That’s up a point from the previous week. Prior to that, this number had been dropping steadily to new lows for the Trump administration from the mid-40s for the previous four weeks. It ran in the mid- to upper 20s for much of 2016.

The national telephone survey of 2,500 Likely Voters was conducted by Rasmussen Reports from April 16-20, 2017. The margin of sampling error for the survey is +/- 2 percentage points with a 95% level of confidence.

In addition, Rasmussen Polls asked 1000 likely voters:

Have efforts by national Democrats to oppose Trump during his first 100 days in office been a success, a failure or somewhere in between the two?”

Few Democrats are pleased with their own party’s attempts to oppose Donald Trump in his first 100 days as president.

A new Rasmussen Reports national telephone and online survey found:

  • 11% of Likely Democratic Voters believe efforts by the Democrats to oppose Trump during his first 100 days in office were successful.
  • 24% of Democrats think those efforts were a failure
  • 63% say they’re somewhere in between.

This correlates with a February poll that found the following:

Most voters agree that it’s bad for America and bad for the Democratic Party if Democrats continue to flat out oppose everything President Trump does. Even Democrats are conflicted about their party’s scorched earth policy.

Here are the questions that were asked:

  1. The national Democratic Party has reportedly decided to engage in total opposition to President Trump and his agenda. Is it better for the country if Democrats oppose the president in every way possible, or is it better for the country if Democrats try to work with him?
  2. Is it better for the Democratic Party if Democrats oppose the president in every way possible, or is it better for their party if they try to work with him?

The February 28 Rasmussen Reports national telephone and online survey found:

  • 29% of all Likely U.S. Voters think it’s better for the country if Democrats oppose the president in every way possible.
  • 63% say it’s better for the country if Democrats try to work with the president instead.

The findings were identical when voters are asked about the impact of the Democrats’ reported strategy on the fortunes of their own party.

  • 29% say it’s better for the Democratic Party if Democrats oppose the president in every way possible.
  • 63% disagree and think it’s better for the party if Democrats try to work with Trump.
  • 44% of Democrats feel it’s better for both the country and their party if they oppose the new president as much as possible, but
  • 46% say it’s better for America if Democrats try to work with Trump, and
  • 45% say it’s better for their party, too.

The survey of 1,000 Likely Voters was conducted on February 26-27, 2017 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence.

Most voters blame disagreements between Trump and congressional Democrats on politics alone but don’t think the ongoing protests against the new president are going to make any difference.

Sizable majorities of Republicans and voters not affiliated with either major party agree that the country and the Democratic Party are better off if Democrats try to work with the president.

Most voters in nearly every demographic category think it’s bad for the country and bad for Democrats if they totally oppose Trump and his agenda.

Most self-described politically liberal voters, however, believe it is better for America and better for the Democratic Party to fight the president in every way possible. An overwhelming majority of conservatives and most moderates disagree.

Over 90% of voters who Strongly Approve of the job the president is doing say it’s bad for the country and for Democrats to totally oppose Trump. Among voters who Strongly Disapprove of the president’s job performance, 60% say it’s better for the country and 58% think it’s better for the Democratic Party if Democrats oppose the president in every way possible.

Just after the election in November, 64% of Democrats said it is more important for their party to stand up for what it believes in rather than work with the new president.  Thirty-two percent (32%) disagreed and said Democrats should work with Trump.

But a majority of all voters – including half of Democrats – say Democrats in Congress won’t be able to halt the president’s agenda.

83% believe Trump is likely to reverse or abolish most of President Obama’s accomplishments.

45% of voters say the country is headed in the right direction. That compares to 29% a year ago and is higher than during any week of Obama’s presidency, which I think is very significant.

I’m not a Trump supporter, but I’m not in the “Oppose him at all costs” camp and I think this poll supports me in that choice.

 

Posted April 29, 2017 by aurorawatcherak in politics

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Why I’m Not Afraid of North Korea   Leave a comment

Image result for map of north korea china south koreaI live in Alaska, which is the closest of the 50 states to North Korea, so I’m told North Korea is a threat to me that I should very concerned about.

North Korea is:

  • 8000 miles to Seattle
  • 7500 miles to Hawaii
  • 5700 miles to Alaska
  • 1050 miles to Japan
  • 121 miles to Seoul

This concern that I’m told to have has US aircraft carriers, carrying fighter jets, and accompanied by warships, currently steaming toward the Korean Peninsula. Meanwhile, the US military is bulking up deployment numbers in South Korea and Japan is considering deploying troops there in preparation for Kim to finally lose his mind.

I don’t actually believe that the United States, Japan and South Korea is needed to deal with Kim Jong-un, but that seems to be what we’re being told. Do look at a map before you argue. North Korea is smack between the territory of two global superpowers … South Korea is a US-occupied territory and China is … well, China.

Now, I do think Kim is probably not the most stable person on the planet. He kind of reminds me of a petulant adolescent. But let’s think for a moment. Is he completely delusional? If he has even a basic connection with reality, he has to know that attacking South Korea or Japan is not going to work out well for him. More importantly, his generals have no doubt applied some common sense to the situation and aren’t going to allow him to do anything stupid. North Korea is not a threat to the US. They can’t even hit Japan with one of their missiles. Yes, they have a capability to harm South Korea, but they’ve had that capability for decades and not used it.

Why ten the military buildup in South Korea? Why has China reportedly deployed 150,000 troops to its border with North Korea? They say they’re preparing, but for what?

War with North Korea doesn’t make sense. It’s a tiny strip of land that acts as a buffer between the United States and China. That’s a recipe for World War III ala Syria and kicking dirt in Russia’s face. Kim Jong-un isn’t responsible for that. We have to stop making boogeymen out of various tinpot dictators and start questioning if it might be our behavior that leads to these crises.

 

Authors – Want an Interview?   Leave a comment

Christian AnarchyAs a service to the authorial world, I offer absolutely FREE interviews on my blog. There are openings in my schedule. Email me at lelamarkham@gmail.com, if interested.

#amwriting, #interviews

IMF World Bank   1 comment

The things we novelists find ourselves researching can be amazing.

Transformation Project Book 3, entitled A Threatening Fragility, is well underway. I am now writing the scenes I’d rather not … for example, the designated survivor/acting president Marshall Ellerby is learning how the IMF and the World Bank work, which means I have to learn how the IMF and the World Bank work.

Image result for image of world bankWhen I started my research, I knew … because I listen critically to the news … that the International Monetary Fund and the World Bank were two separate agencies … and that the IMF had been established as part of the UN under the Bretton Woods Institutions. I knew that last part only because my husband hails from New Hampshire and someone there was proud of that get-together back in 1944. I have a good head for trivia, so their comment stuck.

So are you confused yet? Yeah, well, you’re in good company. John Maynard Keynes was there pulling strings when the two institutions were created and even he admitted he was confused by the names, thought the Fund should be called a bank and the Bank should be called a fund. Nobody has really set things straight since.

In July 1944, delegates from 44 nations established the Bank and the IMF as twin intergovermental pillars supporting the world’s economic and financial structure. There are two pillars rather than one in order to establish a division of labor, but it just leads to confusion for the general public.

Similarities between the two agencies do little to resolve the confusion. Superficially the Bank and IMF exhibit many common characteristics. Both are in a sense owned and directed by the governments of member nations. The People’s Republic of China, by far the most populous state on earth, is a member, as is the United States, the world’s largest industrial power. Virtually every country on earth is a member of both institutions. Both institutions concern themselves with economic issues and concentrate their efforts on broadening and strengthening the economies of their member nations. Staff members of both the Bank and IMF often appear at international conferences, speaking the same esoteric language of the economics and development professions. The media then reports on negotiations and mystifying programs of economic adjustment without really explaining what any of it means.

Image result for image of imfThe two institutions hold joint annual meetings, which the news media cover extensively. Both are headquartered in Washington, D.C., where popular confusion over what they do and how they differ is almost as deep as it is everywhere else. For many years both occupied the same building and even now, though located on opposite sides of a street very near the White House, they share a common library and other facilities, regularly exchange economic data, sometimes present joint seminars, daily hold informal meetings, and occasionally send out joint missions to member countries.

Despite these and other similarities, however, the Bank and the IMF remain distinct. The fundamental difference is this: the Bank is primarily a development institution; the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations. Each has a different purpose, a distinct structure, receives its funding from different sources, assists different categories of members, and strives to achieve distinct goals through methods that differ from the methods of the other agency.

At Bretton Woods, the international community assigned aims to the World Bank that are implied in its formal name — the International Bank for Reconstruction and Development (IBRD), giving it primary responsibility for financing economic development. The Bank’s first loans were extended during the late 1940s to finance the reconstruction of the war-ravaged economies of Western Europe. When these nations recovered some measure of economic self-sufficiency, the Bank turned its attention to assisting the world’s developing countries. Since the 1940’s, the World Bank has loaned more than $330 billion to developing nations. The World Bank’s central purpose is to promote economic and social progress in developing countries by helping to raise productivity so that their people may live a better and fuller life.

In establishing the IMF, the world community was reacting to the unresolved financial problems instrumental in initiating and protracting the Great Depression of the 1930s:

  • sudden, unpredictable variations in the exchange values of national currencies
  • a widespread disinclination among governments to allow their national currency to be exchanged for foreign currency.

Set up as a “voluntary and cooperative” institution, the IMF attracts to its membership nations that are prepared, in a spirit of enlightened self-interest, to relinquish some measure of national sovereignty by giving up practices deemed injurious to the economic well-being of their fellow member nations. The rules of the institution (see IMF’s Articles of Agreement) are signed by all members and constitute a code of conduct. The code requires members to allow their currency to be exchanged for foreign currencies freely and without restriction, to keep the IMF informed of changes they contemplate in financial and monetary policies that will affect fellow members’ economies, and, to the extent possible, to modify these policies on the advice of the IMF to accommodate the needs of the entire membership.

To assist nations to abide by the code of conduct, the IMF administers a pool of money from which members can borrow when they are in trouble. The IMF is not, however, primarily a lending institution as is the Bank. It is first and foremost an overseer of its members’ monetary and exchange rate policies and a guardian of the code of conduct. Philosophically committed to the orderly and stable growth of the world economy, the IMF leadership abhors surprise. It receives frequent reports on members’ economic policies and prospects, which it debates, comments on, and communicates to the entire membership so that other members may respond with informed knowledge and a clear understanding of how their own domestic policies may affect other countries. The IMF is convinced that a fundamental condition for international prosperity is an orderly monetary system that will encourage trade, create jobs, expand economic activity, and raise living standards throughout the world. The IMF’s constitution requires it to oversee and maintain this system.

The IMF is small (about 2,300 staff members) and, unlike the World Bank, has no affiliates or subsidiaries. Most of its staff members work at headquarters in Washington, D.C., although three small offices are maintained in Paris, Geneva, and at the United Nations in New York. Its professional staff members are for the most part economists and financial experts.

The structure of the Bank is somewhat more complex. The World Bank itself comprises two major organizations: the International Bank for Reconstruction and Development and the International Development Association (IDA). Also associated with, but legally and financially separate from the World Bank, are the International Finance Corporation, which mobilizes funding for private enterprises in developing countries, the International Center for Settlement of Investment Disputes, and the Multilateral Guarantee Agency. With over 7,000 staff members, the World Bank Group is about three times as large as the IMF, and maintains about 40 offices throughout the world, although 95 percent of its staff work at its Washington, D.C., headquarters. The Bank employs a staff with an astonishing range of expertise: economists, engineers, urban planners, agronomists, statisticians, lawyers, portfolio managers, loan officers, project appraisers, as well as experts in telecommunications, water supply and sewerage, transportation, education, energy, rural development, population and health care, and other disciplines.

The World Bank is an investment bank that intermediates between investors and recipients, borrowing from one and lending to the other. Its owners are the governments of its 180 member nations with equity shares in the Bank, which were valued at about $176 billion in June 1995. The IBRD obtains most of the funds it lends to finance development by market borrowing through the issue of bonds (which carry an AAA rating because repayment is guaranteed by member governments) to individuals and private institutions in more than 100 countries. Even if a country defaults on its loans, investors still get their money because the other countries guarantee the loans. Its loan associate, IDA, is largely financed by grants from donor nations. The Bank is a major borrower in the world’s capital markets and the largest nonresident borrower in virtually all countries where its bonds are sold. It also borrows money by selling bonds and notes directly to governments, their agencies, and central banks. The proceeds of these bond sales are lent in turn to developing countries at affordable rates of interest to help finance projects and policy reform programs that give promise of success.

Despite Lord Keynes’s profession of confusion, the IMF is not a bank and does not intermediate between investors and recipients. Nevertheless, it has significant resources at its disposal, presently valued at over $215 billion. These resources come from quota subscriptions, or membership fees, paid in by the IMF’s 182 member countries. Each member contributes a certain amount of money proportionate to its economic size and strength (richer countries pay more, poorer less). While the Bank borrows and lends, the IMF is more like a credit union whose members have access to a common pool of resources (the sum total of their individual contributions) to assist them in times of need. Although under special and highly restrictive circumstances the IMF borrows from official entities (but not from private markets), it relies principally on its quota subscriptions to finance its operations. The adequacy of these resources is reviewed every five years.

Neither wealthy countries nor private individuals borrow from the World Bank, which lends only to governments of developing nations. The poorer the country, the more favorable the conditions under which it can borrow from the Bank. Developing countries whose per capita gross national product (GNP) exceeds $1,305 may borrow from the IBRD. Per capita GNP is a measure of wealth obtained by dividing the value of goods and services produced in a country during one year by the number of people in that country. These loans carry an interest rate slightly above the market rate at which the Bank itself borrows and must generally be repaid within 12-15 years. The IDA, on the other hand, lends only to governments of very poor developing nations whose per capita GNP is below $1,305, and in practice IDA loans go to countries with annual per capita incomes below $865. IDA loans are interest-free and have a maturity of 35 or 40 years.

In contrast, all member nations, both wealthy and poor, have the right to financial assistance from the IMF. Maintaining an orderly and stable international monetary system requires all participants in that system to fulfill their financial obligations to other participants. Membership in the IMF gives to each country that experiences a shortage of foreign exchange–preventing it from fulfilling these obligations–temporary access to the IMF’s pool of currencies to resolve this balance-of-payment difficulty These problems are no respecter of economic size or level of per capita GNP, with the result that over the years almost all members of the IMF, from the smallest developing country to the largest industrial country, have at one time or other had recourse to the IMF and received from it financial assistance to tide them over difficult periods. Money received from the IMF must normally be repaid within three to five years, and not later than ten years. Interest rates are slightly below market rates, but are not so concessional as those assigned to the World Bank’s IDA loans. Through the use of IMF resources, countries have been able to buy time to rectify economic policies and to restore growth without having to resort to actions damaging to other members’ economies.

That is a lot of ground to cover and a major problem with the IMF in particular is the spectacular mission creep that characterizes the past 40 years of the organisation’s existence.

The original purpose of the IMF was relatively narrow — to assist in the post-war reconstruction of the international system of fixed exchange rates agreed on at the Bretton Woods conference in 1944. Specifically, the IMF was to provide a pool of liquidity for countries suffering from temporary payment imbalances.

The Bretton Woods system ceased to exist in the early 1970s. Since then, the IMF has tried to reinvent itself as an organisation doing everything from fostering global monetary co-operation, trade, high employment and growth, to poverty reduction around the world. There’s not a lot of evidence that it has made a difference.

Some economies standing at important economic and political crossroads — like Egypt — have chosen to simply ignore IMF’s advice and not to tap to its sources of liquidity. Since the events of the Arab Spring, the talks about an IMF loan have led nowhere; similarly, the country is making very little progress on the reform of its unsustainable system of subsidies — in spite of the subsidy reform initiative spearheaded by the Fund worldwide.

Even those countries that have navigated their way through these turbulent economic years have done so with very little help from the IMF. The Baltic countries, which had been hit the hardest by the financial crisis, received no IMF funding other than a small loan for Latvia, worth $1.16 billion, which the government repaid ahead of schedule. The reason these economies got out of their troubles quickly was that their governments pursued bold economic reforms, including massive cuts to public spending and wholesale liberalization of the economy. In 2009 alone, the fiscal adjustment in Estonia amounted to a staggering 11 per cent of GDP.

The problem is not that the Fund is irrelevant — in many instances, its lending might as well be seen as counterproductive. Its 2008 loan to Hungary, worth $15.7 billion, did not help the country restore sound public finances. Instead, the Hungarian government eroded the confidence of investors by its heavy-handed approach to bank deleveraging, by ad hoc levies imposed on the financial industry, telecommunications and retail, and by seizing the assets of private pension funds in 2011.

The central problem with IMF’s lending is that it ignores moral hazard problems. If governments know that they can access IMF loans, they will tend to behave more recklessly both in good and bad economic times.

The latest idea from the Fund — a European Fiscal Union — is a case in point. In a perfect world, the idea of pooling resources to help European countries deal with potential unexpected economic shocks would be an appealing one.

However, in reality, that would act as an invitation for the less well-governed members of the EU to spend like there is no tomorrow. To avoid future financial crises, the exact opposite of the Fund’s proposal is necessary — namely that national governments in Europe and large financial institutions face the full costs of their decisions, for good or ill.

The debt crisis in Europe, as well as the lingering effects of the global financial crisis of 2008, is an opportunity to rethink the role international organizations, and their lending, have in fostering sound policies and financial stability. In other words, it may be time to start seeing the IMF’s expansive mission as part of the problem, rather than the solution, to the world’s economic woes.

Posted April 28, 2017 by aurorawatcherak in Uncategorized

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