Financial Crises and US Treasury Policy: The Institutional and Ideational Basis of American Capability

Abstract

Precisely what capability does the United States Treasury, as the key US government agency with responsibility for the conduct of American international financial policy, have to control and manipulate the management of financial crises in various parts of the world? In particular, to what extent has the US Treasury acted in a strategic and instrumental fashion, conducting policy that has affected a shift in the ownership of assets in countries experiencing financial crisis in the direction of US private financial and commercial concerns? Several voices from different backgrounds and perspectives have associated episodes of financial crisis, disturbance and distress with the strategic exercise of US power. The basic tenure of this strong American power thesis is that there is a powerful Wall Street—US Treasury financial regime that controls global institutions, such as the IMF, and has the power to determine the future of weaker economies through credit manipulation and debt management strategies (Bello 1998; Bhagwati 1998; Strange 1998; Wade and Veneroso 1998; Gowan 1999; Gills 2000; Stiglitz 2002; Harvey 2003; Soederberg 2004). This regime has been variously referred to as the Treasury—IMF complex (Bhagwati 1998), the Dollar—Wall Street Regime (Gowan 1999), Washington—Wall Street alliance (Peet 2003), Wall Street—Treasury financial regime (Harvey 2003), Wall Street—Treasury—IMF complex (Wade and Veneroso 1998) and Wall Street—Treasury Complex (Cohen 2003).