IMF admits wrong on everything*

*Hyperbole title because the internet.

http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm

In the above article the IMF notes that some neoliberal (their word) policies have failed to deliver on promised levels of growth. The mixture of Austerity and Deregulation often advocated by the IMF has caused inequality to increase and has weakened future economic growth. Whilst some may say well duh, this is quite something coming from the IMF itself. Though some analysts have noted that, whilst this shows there is healthy debate within the organisation, things are unlikely to change in the IMF's operational approach.

Reply 1

ChaoticButterfly

Original post by Aj12

That is entirely normal.

Reply 2

Fullofsurprises

Original post by Aj12

Good news - it's not the first time actually that IMF people have raised doubts about the neoliberal agenda, but it's definitely becoming more of a thing now. There are also quite a few doubters now in places like the World Bank, the Fed and even in the City of London.

Alas, these interesting speculations have not yet reached the ears of the Tory Party, where all of the leadership contenders and their supporters are busy spouting the mantras of total faith in radical capitalism. :rolleyes:

Reply 3

Aj12

Original post by Fullofsurprises

What gets me about the IMF is the extremism. There is a case that can be made for austerity and deregulation in certain circumstances. Greece and Italy with their guilded taxi drivers and Venezuela with its colossal public sector waste. But there is this desire to propose the same policies to every nation, despite the fact that if there is one area that needs a nuanced approach it is economics. I think it was Bolivia where the IMF helped create a situation that led to privatised rainwater. The article makes an excellent point about dropping one size fits all policy. We need to accept you cannot simply click your fingers and find yourself in surplus with a roaring economy.

A bit more economic sense is needed in the Tory party, like not proposing massive cuts after an economic shock....

Reply 4

Fullofsurprises

Original post by Aj12

Supposedly they have dialed back somewhat on the Pincochet-style economics in recent years, but the Greek experience shows that the dial, which used to be on '11' is now maybe a '9' - they are still practising extreme demands. The Greek government for example was informed in all seriousness by the IMF that they should consider selling the Parthenon and the treasures of Alexander the Great's dad. :eek:

That said, the IMF are not the worst nowadays - that honour appears to rest with the European banks and the ECB as creditors. Most of the really hot pressure on Greece has come from them and it has been the IMF pleading for more relaxed terms for Greece.

Bolivia kind of proves where this gets the bankers in the long run - the old adage that a little money paid regularly on a debt is better than no money is pretty much demonstrated by that example.

(edited 7 years ago)

Reply 5

Gora The Xplorer

Dumbass experts getting it wrong again.

Reply 6

viddy9

The IMF issued a mea culpa about European austerity in 2013, which, as we've seen, has caused mass unemployment. In our own case, Osborne postponed his austerity measures at the end of 2012 after realising it wouldn't get him the growth he needed in time for the election (of course, he has resumed them since 2015 and growth once again has been underwhelming).. This report is interesting because it questions some of their decisions elsewhere in the world, although as you state, there's still a gulf between their academic department and the people who actually decide on the policies.

However, it's interesting to note that out of the Troika, it is the IMF who are emerging as the most sensible voice on Greece, unsurprising after six years of failed austerity which has caused the economic calamity there. Still not good enough, though, as FullofSurprises says.

Economists are hoping that Brexit will end austerity and spur investment in the economy, as the IMF, the OECD and Labour under Corbyn and McDonnell have been calling for. I very much doubt it. Whilst Osborne has abandoned his ridiculous Budget Surplus rule, there's no indication that unnecessary spending cuts will be stopped.*