Wednesday, October 8, 2014

Bill Mitchell — The myopia of neo-liberalism and the IMF is now evident to all

The IMF published its October – World Economic Outlook – yesterday (October 7, 2014) and the news isn’t good. And remember this is the IMF, which is prone to overestimating growth, especially in times of fiscal austerity. What we are now seeing in these publications is recognition that economies around the world have entered the next phase of the crisis, which undermines the capacity to grow as much as the actual current growth rate. The concept of ‘secular stagnation’ is now more frequently referred to in the context of the crisis. However, the neo-liberal bias towards the primacy of monetary policy over fiscal policy as the means to overcome massive spending shortages remains. Further, it is clear that nations are now reaping the longer-term damages of failing to restore high employment levels as the GFC ensued. The unwillingness to immediately redress the private spending collapse not only has caused massive income and job losses but is now working to ensure that the growth rates possible in the past are going to be more difficult to achieve in the future unless there is a major rethink of the way fiscal policy is used. The myopia of neo-liberalism is now being exposed for all its destructive qualities.
Bill Mitchell – billy blog
The myopia of neo-liberalism and the IMF is now evident to all
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

2 comments:

Roger Erickson said...

War on poverty = War on Neo-Liberalism

doesn't matter what you call it:

White Collar Crime?
Lagging Adaptive Rate?
Cultural Suicide?
Control Fraud?
Innocent Fraud?
phenotypic persistence?
Institutional Momentum?
Error?

all are unnatural if allowed to grow to extremes, quickly or persistently

Roger Erickson said...

biologists study this all the time;

& call it "phenotypic persistence" - aka, random institutional momentum;

in the great scheme of things, it's just statistical noise

but all kinds of entities (people? families? businesses?), species and cultures allow their random excesses to destroy them;

for aggregates too, not just individuals, there's no guarantee, and no free lunch