13 thoughts on “Monday Message Board

  1. Roger Douglas will be speaking at the LDP conference this coming weekend. Should be interesting.

  2. The IMF has always been a Keynesian outfit. Austerity (high taxes) and devaluation (inflation) their standard remedy. They’re supposed to be managing the gold standard and so long as we have gotten rid of that we ought to get rid of the IMF also.

  3. @TerjeP (say tay-a)
    Austerity (high taxes) and devaluation (inflation) their standard remedy.

    Thats not a standard remedy for developing nations in need of a loan Terje and you know it.
    Its not a Keynesian policy at all. You may want to look towards the neoliberals to describe IMF policy – insist on budget surpluses, strip public infrrastructure, privatise everything and open your capital markets
    Notwithstanding the fact that public services traditionally help the poor with employment and with lower costs for health care or education and opening your capital markets can be like opening the door to find a horde of hungry elephants in your house… when they stampede out the house is destroyed.

    Nothing like Keynesianism Terje – go read Stiglitz – stock standard neoliberal agendas were part of the World Bank and the IMF until the GFC but I expect they will continue down the same path in much the same way as the privatisations continue here.

    Waking up to the nightmare comes later but this isnt Keynesianism and you know that Terje. More nonsense.

  4. To achieve budget surpluses they propose increased revenue via austerity (high taxes) and export dollars via currency devaluation (supposedly to improve terms of trade). The later is an attempt at priming demand and entails inflationary measures and the former neglects the impact on domestic trade and incentives. Privatisations are often a good idea in principle but not in the midst of a crisis when all you get is a firesale price. I’ll concede that much of the microeconomic advice dishes out by the IMF is economic liberalism in drag, however it is in the context of macro economic policies that are destructive and mostly Keynesian. Whatever you call it I think the IMF is a menace and ought to close down. The World Bank can go also.

  5. @TerjeP (say tay-a)
    Budget surpluses for countries with an absence of demand are hardly Keynesian remedies Terje. You need to revisit ECON110 macroeconomics. Im sure you think the IMF and the World Bank is a menace Terje (that doesnt surprise me given your propensity to see most regulation as bad) but neither institution has been implementing broad keynesian remedies for economies in trouble, with the exception of since the GFC when turned back to good old fashioned Keynesian recommendations for stimulus policies.

    As they should have Terje. Quite appropriate.

  6. @TerjeP (say tay-a)

    The word Keynesian does not have the approximate definition “something I do not like”.

    You can not substitute the word Keynesian in to the following sentence “They implemented policies that I do not like” like so ” They implemented Keynesian policies” and expect to retain the meaning. People won’t understand what your saying. They might think instead that you mean Keynesian policies, not that they are some policies that you simply don’t like.

    Similarly, it is better to simply say you don’t like the IMF than to say that its a Keynesian outfit. Why not simply adopt “Bushisms” and say instead “The IMF has always been a bunch of evil-doers and are part of the policy axis-of-evil.” That way people will find it easier to understand what you are saying.

    I do understand that using the Bushisms rather than a word like Keynesian doesn’t convey that you know something about IMF policies, other than your dislike for them. But you are not intending to mislead anyone are you?

  7. Both of you make fair points which I accept. The policies of the IMF are however oriented towards a demand centred economic worldview which I generalise as Keynesian (wrongly I accept). The thinking seems to be (or historically seems to have been) that that revenue is needed so that governments can continue demand and hence taxes have often been hiked. Likewise currencies have been devalues to stimulate foreign demand. Neither response makes sense and are not going to help an economy already in crisis.

    I’ll try and use the term Keynesian less broadly.

  8. The IMF usual finds a role where a country or country (the goverment) has financial problems. Unsurprisingly, amongst the policies they advocate in this situation is the government getting some money (that is, raising taxes, etc.). Of course, there is a great difference between the advice they proffer when it is a first world country in trouble versus a third world country in trouble. A good example is the difference in advice being give for this financial crisis versus the Asian crisis in the late nineties. In the former case the concern was about economies, whereas in the latter case the policy advice might have been some sort of ‘hairy chested’ experiment to see if radical looney policies the right had discussed might actually work. They didn’t.

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