Global Economy Needs Shelter From the Storm

Think of it as a bankruptcy; with help, it can recover and thrive
By Jim O'Neill,  Newser User
Posted Oct 9, 2008 11:28 AM CDT
A woman walks past a financial display board in central London, Monday Oct. 6, 2008.   (AP Photo/Lefteris Pitarakis)
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(Newser) – The global economy is in such chaos that it needs the equivalent of bankruptcy protection, David Ignatius writes in the Washington Post. "Bankruptcy, if properly managed, is a workout process that provides a pathway back to solvency," he argues. "Companies often reemerge from bankruptcy healthier than before; often, some assets are sold to other companies that can make better use of them."

The key is getting help from governing agencies in establishing a firm footing. For the US, the $700-billion bailout should help move that along. But the IMF "has been utterly impotent in the crisis," Ignatius laments. "It's time to abolish this bootless institution and create a new one that can help manage the global workout."