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  • Christine Lagarde's Positive Assessment of our Economic Plan
  • geetee1972
    Member

    Reported today Christine Lagarde appears to wholeheartedly endorse the coalition’s economic plan to date. It seems that they were right.

    Of course, the past ecomomic plan is not the same as the one we will have in the future. So the question is, do you vote for a party that will maintain the current course or one that will accelerate it.

    LHS
    Member

    Depends what your political stance is. If you are a tory hater then you will hate hate hate and find ways to debunk what Lagarde has stated even though the facts speak for themselves.

    Premier Icon martinhutch
    Subscriber

    Trouble is, the IMF is far from a politically-neutral organisation. The nagging question is whether Lagarde would rather keep working with Cameron/Gideon as opposed to have to form a new working relationship with both Eds, and is making statements which might make that happen.

    The IMF have been flip-flopping on UK policy for some time now. But basic point about the balanced budget is fair enough. Gave old Farrage some ammo to berate the other “challengers” last night with though.

    Premier Icon Kryton57
    Subscriber

    I made my mind up when they doubled the the childcare allowance. 😀

    BigDummy
    Member

    “It’s clearly also delivering results, because when we look at the comparative growth rates delivered by various countries in Europe, it’s obvious that what’s happening in the UK has actually worked,”

    The trouble is, that’s not exactly a ringing endorsement. Growth is stagnant across Europe, so having a marginally less terrible rate of growth than other european countries is not terribly exciting.

    It also remains the case that GDP growth is one, not terribly exciting, measure of how an economy is doing. It’s really not a very good measure of how a society is doing.

    Finally, (correct me if I’m wrong) I don’t think the IMF runs alternative scenario models. Growth was rather faster in 2010 than it’s been at any point since.

    That isn’t a “debunking” incidentally, it’s a “contextualisation”. If your only criterion for voting in general elections is which party you reckon can continue to deliver modest GDP growth to Christine Lagarde’s satisfaction, that article should sort you out. 🙂

    geetee1972
    Member

    Trouble is, the IMF is far from a politically-neutral organisation

    That might well be true but the insight that statement offers is more suggestive of the difference between ‘economics’ and ‘politics’.

    This is just a suggestion, but I wonder to what degree pure economics is politically agnostic and vice versa (this is where I wish I’d done an economics and political science undergrad).

    The debate last night was a good example of what I mean. Ed Milliband was trying to strike a balance between economic reality and political ideology because like the Tories, they want to appeal to as broad a base as possible.

    Sturgeon, Farage and the ‘other one’ only care about political ideology because their support base is far more homogenous and they can appeal to them without worrying about the econmmic impact.

    Excuse her if she gets distracted – bigger fish to fry at the moment. Imagine negotiating with Varoufakis?

    I don not think there is something called pure economics. Different schools of thought have radically different interpretations of the same events. However, there has been a consensus between some extremes eg Keynesians v monetarists (a relief as both extremes are pointless) and between supply-side, fiscal and monetary policies (yes they do conflict with each other. But to your point that is why PPE is a great combination IMO. sad that so few places offer it as a degree.

    LHS
    Member

    It is easy to cherry pick the soundbites of information you want to hear to align to your own political views. The points above about a balanced economy are particularly important.

    You need steady growth – but in all sectors, no point having a strong financial services sector with a degraded manufacturing sector. Accompany that with reducing unemployment, paying off the deficit and ensuring the public services are operating at maximum efficiency and you have a winning formula.

    Premier Icon martinhutch
    Subscriber

    but I wonder to what degree pure economics is politically agnostic and vice versa (this is where I wish I’d done an economics and political science undergrad).

    Economics at that level is effectively a political science – its day-to-day application is the use of various monetary levers as a tool of social policy.

    I don’t think anything more than a mask of political agnosticism can be applied by an organisation such as the IMF.

    Also its not overly cynical to suggest that the Lagarde/Schauble double support for mis-named UK austerity policies had a slightly different, intended audience (Athens?)

    geetee1972
    Member

    So here’s another thought.

    What do people think about those who will only ever vote for the same party?

    I’m of the view that people whose minds are already (and alway) made up are simply voting in their own self(ish) interests (and I think it applies to both sides of the centre ground).

    The alternative approach is to reason that your mind cannot be made up ahead of being asked, and that the question to be considered is ‘what is the right choice that will benefit the most people?’

    You may well still always vote the same way, but being open to alternatives ahead of that decision is indicative of a less selfish approach to voting.

    I can’t see how any one political ideology, i.e. the core essence of what a party stands for, can always be the right in all possible circumstances. You have to accept that the right outcome, where that means what is the outcome that will benefit the most people, will be different at different times.

    Premier Icon gofasterstripes
    Subscriber

    I finally got around to listening* to the first debate last night.

    Something that struck me was how rare it is to hear a leader say

    “Well, you (other leader) have made a good point there, we’ll look into that.”

    Unless you believe all the members of the other parties are morans, adopting some ideas from outside must be a good idea. You don’t see other industries refuting and ignoring research done by other competitive organisations, they’re usually falling over themselves to produce products that have been developed elsewhere and are shown to work.

    *didn’t have time to sit down and watch it, so I put the YT link into a YT to mp3 converting website and listened to it while doing a 50miler. I thunk, perhaps NOT seeing them gives an interesting impression, different from watching rehearsed facial expressions or even flirting with the camera.

    I’ll post the link to the file up in a minute.

    EDIT: https://drive.google.com/file/d/0ByexbovcGfjLQzR2SVpraEJhTFE/view?usp=sharing

    LHS
    Member

    My honest view.

    The US democratic party should come and run the UK
    The UK conservative party should go and run the US

    The UK labour party and US republican party should be dropped on to an Island together in a modern day remake of the Battle Royale.

    milky1980
    Member

    What do people think about those who will only ever vote for the same party?

    I know of loads of people who will only ever vote for Labour because that is what they’ve always done. Mainly because that is what their dad did etc. Very prevalent in Wales hence why Labour rule the Valleys. I doesn’t matter to them that the NHS here is crumbling or that jobs in some parts are scarce. It doesn’t matter if eg the Conservatives came along and guaranteed to rejuvenate the towns, bring new, well-paid jobs in and give you a free 50″ TV, they’d still vote Labour!

    I’m all for free choice but blindly following the same path for no valid reason or even looking at the alternatives smacks of having a closed mind.

    digga
    Member

    Christine Lagarde is very possibly the world’s most intelligent ventriloquist’s dummy, ever. No doubt she has charm and education, but she’s effectively (yet another) a harvard-Keynsian puppet.

    IMF could save a quid or two buy investing in a teak boom box, which quoted Bernanke and Krugman ad hoc.

    geetee1972
    Member

    Christine Lagarde is very possibly the world’s most intelligent ventriloquist’s dummy

    I think that’s a bit harsh not least as she expressed a lot of strong alternative views on the banking and financial system coming into the job.

    digga
    Member

    It’s not harsh. She’s extremely intelligent, very personalble and, for a woman of a certain age, attractive. However, she is part of the ‘system’, the economic Mad Hatter’s Tea party – the people who have lead us to this absurd place we now inhabit.

    Here’s just one example of how we’ve gone through the looking glass: http://www.wsj.com/articles/as-interest-benchmarks-go-negative-banks-may-have-to-pay-borrowers-1428939338

    teamhurtmore – Member

    The IMF have been flip-flopping on UK policy for some time now.

    Well exactly. You can cherry pick what the IMF has historically said to suit your preferred argument.

    What was the IMF’s opinion of the state of the US economy at the time of the collapse of the Lehman Brothers? What was the IMF’s opinion of the first troika brokered package to turn around the Greek economy 5 years ago?

    .

    ….for a woman of a certain age, attractive.

    She’s French. It’s called style,

    Premier Icon MoreCashThanDash
    Subscriber

    The question you have to ask yourself:

    Are two Eds better than none?

    jambalaya
    Member

    Not surprising to see the IMF praise the UK, we are running a prundent financial policy which has been shown to be working. The Labour party recognise this and plan to do much the same. Also as a lender the IMF doesn’t want to see an expansion of spend and borrow resulting in bad debts. As tmh says there is probably a nod towards Greece here too.

    Is negotiating with Varoufakis that difficult ? Greece is in such a weak position and their requests are so preposterous you can just pretty much ignore him and point him in the direction of the agreement Greece signed.

    @geetee, I think many people vote the same way out of habit, it’s not that they are selfish its jut they don’t really think about it.

    Not surprising to see the IMF praise the UK, we are running a prundent financial policy

    Mis-pricing risk to an extraordinary extent? Distorting financial markets. Injecting liquidity at a time of abnormally low interest rates. Prudent? 😉

    jambalaya – Member

    Not surprising to see the IMF praise the UK

    So you weren’t surprised when the IMF strongly criticised the UK in the last 5 years? And you won’t be surprised when the IMF critises the UK in the future?

    The IMF failed to predict the international credit and banking crises. The IMF failed to predict the Eurozone crises. The IMF failed to predict the constantly unfolding Greek tragedy. All a lot more than minor economic bleeps.

    The IMF is led by a Conservative politician who failed her civil service exams and has no formal qualifications in economics, if that makes any sort of difference. Their opinions are just as valid as anyone else.

    grum
    Member

    It is easy to cherry pick the soundbites of information you want to hear to align to your own political views.

    True but people in glass houses etc…

    😀

    She describes herself as a ‘liberal’ in terms of persuasion but gets attacks from all angles – a conservative with no formal qualifications to a Kenyesian nut job!

    I am wondering if she is more concerned about the closing net (allegedly, tbclear) – where’s JHJ when you really need him!?!

    geetee1972
    Member

    What was the IMF’s opinion of the state of the US economy at the time of the collapse of the Lehman Brothers?

    I don’t know but Lagarde is famous for having said that the banking crisis would not have happened if it had been called ‘Lehman Sisters’. The point being that she has been vocally critical as to the causes of the crash.

    The IMF failed to predict the international credit and banking crises.

    I can’t prove or disprove that either way because I don’t have a specific reference but the crisis was predicted many times before it happened; it was the subject of vast amounts of editorial copy and headlines in the media in the years running up to the crash.

    There was a book called ‘Money for Nothing; Financial Fantasies
    and The Economy of The Future’ published in 2003. In that book, Bootle ostensibly predicted the crash of 2008, not the specific mechanics, i.e. how CDOs ostensibly reduced capital liquidity in the banking system to zero, but certainly he showed how the reliance on debt and the illusion of wealth that this created (for everyone, not just the bankers) was likely to cause a melt down on the scale of the Great Depression.

    I vividly remember our own press regularly running headlines in the early noughties about the growing levels of personal debt, spiraling house prices and the increasingly flagrant way in which Brown was breaking his own (fiscal) golden rule.

    2008 should not have come as a surprise to anyone, nor did it. It was predicted with alarming regularity and no one did anything about it because no one wanted to stop the merry go round. That goes for the ordinary man in the street as well as the ‘masters of the universe’.

    the crisis was predicted many times before it happened

    Capitalism is inherently unstable, it constantly staggers from one crises to the next. Even the most advanced capitalist economies can expect no more than 10-20 years of stability, if they are extremely lucky. The principle role of a finance minister in any country is to crises manage.

    Bootle ostensibly predicted the crash of 2008, not the specific mechanics

    I predict that bust will follow boom. You wait and see how correct I prove to be.

    Premier Icon edhornby
    Subscriber

    politician says nice things about large component country of world economy

    wow !!!

    To be fair, I quite like Lagaarde, she talks mostly sense

    geetee1972
    Member

    You’re right of course Ernie, but Bootle’s book was much more accurate than just that point. He specifically predicted that the crash would come because of an over inflated housing market with unsustainable levels of personal debt provided by banks that had access to too much capital, not enough regulation or oversight and too great an emphasis on profit. That plus the fact that the previous divide between retail and investment banking that specifically pevented the merging of banks that should focus on lending, liquidity and clearing with those focused on speculation (which incidentally came about as a direct result of the Great Depression) has been removed.

    Capitalism is inherently unstable

    The biggest problem with that statement is that is assumes that ‘capitalism’ is homogenous around the world and it’s just not.

    You might make a better argument if you said that ‘Anglo Saxon Capitalism’ is inherently unstable (because it is short term and focused purely on profit), but Alliance models of capitalism, such as those in Germany and Japan, don’t suffer from that problem and the Dirigeste model in France doesn’t either (though actually the high degree of central intervention and coorindation of the dirigeste model was also one of the reasons the the Eurozone got into so much trouble; the point being that all the Eurozone did was transfer the liability of debt from the private banking sector to the public/government sector.)

    The biggest problem with that statement is that is assumes that ‘capitalism’ is homogenous around the world and it’s just not.

    I’m sorry if my comment gave that impression, of course capitalism isn’t homogenous around the world, nor is it “homogenous” through history, in fact it’s not homogenous from one year to the next.

    Unstable and in crises as it constantly is it has to repeatedly reinvent itself and attempt to find new solutions in its perpetual quest for stability.

    And yes that includes non-Anglo-Saxon models of capitalism such as those in Germany and Japan.

    FunkyDunc
    Member

    When I heard the comments, I thought 1. Who has she been sleeping with in the coalition, or 2. Who has bribed her to say that.

    Convenient timing to say it with 3 weeks to go to a general election

    jambalaya
    Member

    Capitalism is inherently unstable

    Much like subsistence farming, except bad weather and a crop failure won’t kill your entire family. Capitalism has delivered huge increases in living standards in the last 100 years and is the system most countries are keen to emulate.

    The IMF is a large organization with many talented individuals including Lagarde. Failing a French civil service exam would get a gold star from me, I can’t imagine how dull one must be. She was a partner at Baker and McKensie a top US law firm and head of their European operation. Then into politics and French Finance Minister (in Sarkozy’s government) then head of the IMF. Mum to two kids also. Pretty impressive.

    geetee1972
    Member

    I’m sorry if my comment gave that impression,

    It gave the impression that it was always unstable for the same reason. I think the instability you experience under one form is different to the instability in another and it’s important to understand the differences becuase they impact on policy.

    There’s an interesting contrast between the 2008 financial crisis that started hit the US and UK (the Eurozone crisis was something different) and the crisis the Japan experienced in the 90s. Two wildly different crises but crises nevertheless.

    Capitalism might be inherently unstable but human beings are self adjusting mechanisms.

    Failing a French civil service exam would get a gold star from me ………..Pretty impressive.

    Perhaps that was it – she deliberately set out to fail. Cunning or what? Yup…..”pretty impressive” I would say.

    It gave the impression that it was always unstable for the same reason.

    It is always unstable for the same reason, the same paradox. But the sun is shining and I’m planning a bike ride, so that’s for another time 🙂

    PJM1974
    Member

    I don’t care if our economic plan is endorsed by the Dalai Lama and the Krankees, we’re hitting the poor until they stop being poor to save us £300m a year, whilst letting 110,00 thousand people off £35bn in taxes.

    It’s immoral.

    jambalaya
    Member

    I don’t care if our economic plan is endorsed by the Dalai Lama and the Krankees, we’re hitting the poor until they stop being poor to save us £300m a year, whilst letting 110,00 thousand people off £35bn in taxes.

    It’s immoral.
    But we are not. We actually don’t know what taxes the non-doms pay on their offshore earnings so cannot know how much they might pay if they decided to remain in the UK. We don’t know how much in taxes they pay to the countries where they hold their assets. What most politicians including Ed Balls recognise that if we abolish non-dom status we will probably collect less in taxes than we do now. The Labour party couldn’t even estimate accurately how much tax would be collected (or lost), their guess was a few 100 million – so quite some way from your £35bn number.

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