Controlling the Fires at the IMF

In the row over the nomination of the new managing director of the IMF, it went unnoticed how much Horst Köhler’s ancestry qualifies him for this job. Mr. Köhler seems to have everything the organization can ask for from a new boss. Apart from his professional qualifications, there are other traits implied by his name which will come in handy fighting global economic fires.

Literally translated from the German, Mr. Köhler’s family name describes the nowadays extinct species of charcoal makers. It is not unlikely that one of his ancestors was one of those peculiar characters who led a secluded and lonely life deep in the forest.

There they excelled in the art of lighting controlled fires which slowly burned wood to produce charcoal. The result was worth the trouble. Charcoal is far lighter than firewood and, because it is more dense than regular firewood, it produces more heat. It can also much easier to transport and store.

It seems remarkable just how similar Mr. Köhler’s job description at the IMF is to that of his charcoal-making ancestors. Controlling a fire requires a number of skills that are at least as important for someone who tries to stabilize global financial markets. Just like his presumptive great-great-grandfather, Mr. Köhler has to be constantly on guard watching the fire (or, as the case may be, volatile financial markets).

If the fire burns uncontrolled, the whole forest might easily be damaged. In Mr. Köhler’s case, that would translate into the destabilization of the world economy. At the same time, he must not let the fire extinguish, as that would be tantamount to prematurely finishing the production process. In “IMF-speak,” this means to stabilize financial markets — without hindering growth and flexibility.

A final similarity regarding Mr. Köhler’s job and that of his forefathers can be found in the need to clear the forest of the wolves. Lest both succeed in that critical mission, they would be toast.

Evidently, the IMF head is constantly faced with demands from various countries — Malaysia seeking to rein in controversial currency trader George Soros, for instance. More generally, the managing director’s mission is to protect the markets from financial sharks which blame everybody but themselves for their countries’ economic problems.

In the end, Mr. Köhler may share a part of his ancestors’ fate. He will get at least some of his fingers burned in the frequently unenviable job of leading the IMF. And he will suffer from sleep depravation — if he has not already done so — after his roller coaster nomination process. On the other hand, at least Mr. Köhler will not have to live in a small dirt-floor cottage in the middle of a lonely forest, nourishing himself with water and cabbage soup.