DSK – The Downfall of A Reformer

The prosecution’s case against the former International Monetary Fund Chief Dominique Straus-Kahn (DSK to the media) is starting to fall apart. Apparently, there have been serious inconsistencies with the alleged victims accounting of the incident and she was apparently caught in a recorded phone conversation with a friend in prison talking about the merits of accusing such a high profile man of sexual assault a full day before the incident occurred. In short, while the case is basically coming down to a “he said, she said” scenario, with her version of the story is starting to fall apart.

That is good news for DSK, but unfortunately, the damage has already been done to his credibility and his political career. (Remember Elliot Spitzer?)

DSK is no stranger to sexual misconduct. He has been married three times. In 2008 he had an affair with a subordinate, which was later forgiven because he had helped the woman find a job. In 2007 he was accused of sexual assault by a French journalist but she never pressed charges. Apparently the man has an insatiable sexual appetite as do many men (and some women) who hold positions of great power and who are what psychologists call “Type A” personalities. This is why many high-profile Type A bankers and politicians are often accused of having affairs, using prostitutes, or end up having what most people would consider bizarre sexual habits. Within the culture of these types of people, this is considered normal behavior, so we should not be so quick to judge them just because we do not practice in that culture.

Do not get me wrong. If DSK actually committed the crime of sexual assault, then he should be punished. There is a clear line between sexual misconduct and assault that should never be crossed. However, if the sexual conduct was consensual but then one of the participants decides to accuse the other of assault, then perhaps we should look deeper into the possible reasons why.

Too Much the Reformer

As a prominent member of the French Socialist Party, DSK was often an outspoken critic of the international banking industry. Twice he ran for the Presidency of France and he was expected to run again in 2012 (with most polls seeing him as an early favorite). Unlike in America, sexual misconduct is not seen as a character flaw among voters in France. In 2007, he took over as the managing director at the International Monetary Fund (IMF) where he pushed for major reforms in international banking rules in light of the Financial Crisis of 2008. Among his most radical proposals was the replacement of the US dollar as the World’s reserve currency in favor of the Special Drawing Rights (SDR) vehicle, which would be the only legal currency for the trading of gold. This move could have been perceived by some as a move to first wrest control of the gold market away from the US dollar, and second to begin a process to force world currencies to peg their own currencies to gold and other precious metals via the SDR vehicle.

In other words, DSK was making a lot of enemies in the International Banking Industry and in Washington. In fact, he has openly accused the leaders of the worlds largest banks as being too greedy, which is hardly news but when you are the head of the worlds largest regulatory body of financial markets, people start to get nervous.

DSK Had to Go

The last thing the worlds top bankers wanted was to lose the ability to print as much fiat money as they can possibly want at the expense of the working classes of the world. If the IMF Chief were to become President of France in 2012, he may start a process of pulling Europes second largest economy out of the Euro and out of its international treaty obligations including NATO.

Therefore, DSK had to go and hopefully the IMF would replace him with someone a little more sympathetic to the status quo.

Just as with Elliot Spitzer, (another outspoken enemy of the too big to fail) DSKs sexual adventures made for an easy target. All they had to do was to find a poor, working class woman with access to the IMF chief who was willing to have sex with him and then accuse him of rape or sexual assault after-the-fact. In New York City, this should have been relatively easy.

Despite the fact that the prosecutions case is falling apart and DSK will likely see the charges against him dropped within the month, the damage to his career is already done. He was forced to resign his post as IMF Chief and he has been replaced by Managing Director Christine Lagarde, also a former French Finance Minister. Ms. Lagarde is also seen as a reformer, but most observers believe it will be very difficult to replace DSKs 24-7 work ethic. It is unclear at this time whether he has the support he needs at home to run for President given that he has been unable to do any campaign work while under house arrest in New York. If he fails to win the presidency this time, he may be too old to run again.

Lesson: Don’t Stir The Pot

As the US Government and the Supreme Court hand more and more political power to the corporate elite, those who are in power that are brave enough to take on their new masters should beware. They own the Legislature, they own the Courts, and they own the media. Individually, members of the elite may be good people who you would not mind having a drink with, but as a group they are extremely dangerous and are a threat to the very fabric of our society. Ignore them at your peril.


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