IMF Disavows Neoliberalism

[applegrove]

IMF Disavows Neoliberalism

By Keith K C Hui, http://fpif.org/imf-disavows-neoliberalism/

"SNIP..............



According to the International Monetary Fund (IMF) June 2016 research report “Neoliberalism: Oversold?” which was described as “a political bombshell … that caused a near-panic among advocates of free market policies” by the Foreign Policy analyst Rick Rowden [Note 1], what ‘capital account liberalization’ brings to developing countries is “the pervasiveness of booms and busts” rather than growth. “In addition to raising the odds of a crash, financial openness has distributional effects, appreciably raising inequality……. There is now strong evidence that inequality can significantly lower both the level and sustainability of growth.” [Note 2]


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[Warpy]

1. There seems to be a huge chasm between their rhetoric and their practice

and I'm not the only one who has noticed.

They're still trying to preserve the wealth of the rich by pushing austerity onto everybody else.

[Gabi Hayes]

2. where's the garbage can?

you say that report is already in there?

oh, what a surprise

that was FUNNY!

[Rex]

3. Of course they do, it would be hard to look in the mirror everyday they wake up if they didn't.

Same shit, different year. They cannot disavow reality, no matter how many barkers they hire.

[Gabi Hayes]

5. the sole purpose of the IMF, if not intended at the beginning, haaaaa, is to

redistribute wealth away from the have nots to the haves.

how obvious does that have to be made. as the above posters, glitzy ad campaigns, retreats, conferences, etc., mean nothing. look at the results of their 'help'

[Rex]

6. Worked like a charm for decades now, with one leader leaving due to fraud scandal after another.

No wait...I think a few of those exits were over adultery.

[Gabi Hayes]

8. or....sexual assault?

loved that guy, didn't you?

[Rex]

10. Oh yeah a real class act!

I agree, more like sexual assault and some hush money.

[applegrove]

9. Open trade has helped many in poor countries become middle class. Over a billion people have moved

in the middle class. Why stocks like Lego have done so well. The point is that the extreme of deregulation was oversold. And no taxes. Not that trade is all bad.

[hatrack]

4. Well, well, well . . .

Looks like the whole "economics red in tooth and claw" not working out has finally made it to the dinosaur's walnut-sized brain.

[Gabi Hayes]

7. amen.....where greed and repression flow, the chicago boys go

how'd that Pinochet thing work for you, Milt?

[elleng]

11. 'inequality can significantly lower both the level and sustainability of growth.”'

No shit, sherlock!

[pampango]

12. "With Trump and Le Pen at the barricades, the IMF wake-up call may be too late."

The paper gratifyingly says that both austerity and highly mobile capital increase inequality, and inequality is a negative for growth. And it firmly says Something Must Be Done:

The evidence of the economic damage from inequality suggests that policymakers should be more open to redistribution than they are. Of course, apart from redistribution, policies could be designed to mitigate some of the impacts in advance—for instance, through increased spending on education and training, which expands equality of opportunity (so-called predistribution policies). And fiscal consolidation strategies—when they are needed—could be designed to minimize the adverse impact on low-income groups. But in some cases, the untoward distributional consequences will have to be remedied after they occur by using taxes and government spending to redistribute income. Fortunately, the fear that such policies will themselves necessarily hurt growth is unfounded.

In some ways, the fact that this article was written at all, and that it is apparently fomenting debate in policy circles is more important than the details of its argument, since it does not break new ground. Instead, it takes some of the findings and analysis of heterodox and forward-thinking development economists and distills them nicely.

The publication of this IMF paper is a sign that the zeitgeist is, years after the crisis, finally shifting. It is becoming too hard to maintain the pretense that the policies that produced the global financial crisis, which are almost entirely still intact, are working. And the elites and their economic alchemists may also recognize that if they don’t change course pretty soon, they risk the loss of not just legitimacy but control. With Trump and Le Pen at the barricades, the IMF wake-up call may be too late.

http://www.nakedcapitalism.com/2016/05/new-imf-paper-challenges-neoliberal-orthodoxy.html

Weird to see right wingers like Donald Trump and Marine Le Pen showcased as reasons for economic elites to change course on their prevailing policies of austerity and inequality.

It is gratifying to see the IMF itself recognize that hyper capital mobility and austerity aggravate inequality which is bad, even from an elites' perspective, for growth itself. Perhaps Christine Legarde's past experience as a labor and anti-trust lawyer is causing the IMF to take a different view.