Multilateralism? What Multilateralism?

Dani Rodrik calls the efficacy and legitimacy of the IMF into question, calling it a tool of the U.S.:

Mark Thoma brings up IMF' new policy of surveillance on exchange-rate policies and quotes from a piece by IMF Managing Director Rodrigo de Rato on the subject. He refers to an earlier post of mine and encourages me to return to the topic as I had promised.

I will do that at some point, but for the moment let me just point to the obvious hypocrisy at work here. Rato writes:

This reform represents a victory for multilateralism that demonstrates ownership of how Fund surveillance will be strengthened and members' willingness to live up to their responsibilities in the process.

A victory for multilateralism? He has got to be kidding. The new policy was instituted at the behest of the United States, with the express purpose of bringing pressure on the Chinese.

And when the IMF staff took "multilateralism" seriously and reported its view that the dollar was overvalued, they were told to mind their own business and not to meddle with U.S. policies. So while we shall see plenty of reports coming out of the IMF on the undervalued Remninbi, don't expect anything on the dollar soon.

This in the face of the Obama/Clinton legislation to put tariffs on China unless they allow the value of the RMB to rise. The logical shortcomings of U.S. policy is astounding. After all, imagine the U.S. reaction is the E.U. threatened sanctions unless we allowed the value of the dollar to further depreciate. The difference, of course, is that the dollar is a major international reserve currency, so depreciation could more severely hurt holders of dollars, and those are not limited to citizens of the U.S. (tho they certainly include citizens of the U.S., particularly those who get more value from imports than exports). But it's even worse for us, because the Chinese hold a lot of U.S. debt. If the value of the RMB rises relative to the dollar, then servicing that debt becomes more expensive for us. So Obama and Clinton are essentially begging China to increase our debt burden and increase our costs of living, or else they are threatening to do it for them. Remarkably stupid.

The IMF needs independence to be productive and credible. The U.S. needs a consistent policy to maintain credibility. The Chinese are looking at us and wondering what the hell we're thinking.