Posts Tagged ‘IMF’

Protesters from the Communist-affiliated trade union PAME shout slogans as they march towards the parliament during a general labour strike in Athens

Greek labor unions staged a nationwide strike today to protest against austerity policies imposed on the country by the current government and its foreign creditors, including Germany.

Schools and pharmacies were shut, ships remained docked at ports, hospitals operated on emergency staff, and transport in Athens was disrupted due to the 24-hour strike called by private sector union GSEE and its public sector counterpart ADEDY.

More than 20,000 workers, pensioners, students and the unemployed marched peacefully through the streets of the Greek capital chanting “EU, IMF take the bailout and get out of here!”

Unions said their anti-austerity message was also aimed at German Chancellor Angela Merkel, who is due to meet Greek Prime Minister Antonis Samaras in Athens on Friday. Germany has insisted on painful spending cuts and tax hikes in return for international loans.

“It’s time to save people not banks,” said 59-year old economist Eleni Prokou. “Merkel and the troika should stop sticking their nose in our business.”

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129108_600 Martin Rowson 22.03.13

Protest of the day

Posted: 3 February 2013 in Uncategorized
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0a635a69-6796-4273-997f-775ebccc5c0b-460 Greece Farmers'  Protest

Greek seamen and farmers continued their protests against austerity measures imposed to satisfy international lenders.

The Greek government is holding talks with the protesters but refuses to budge on any demands that might undermine its deficit cutting efforts, a condition of bailout funds and debt relief from the European Union and International Monetary Fund.

Greece last month invoked rarely used emergency powers to break a strike of subway workers, serving military-style orders instructing them to return to work or face arrest.

Greece’s biggest labor union has called a general 24-hour strike for 20 February.

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Posted: 10 October 2012 in Uncategorized
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The headline news from the latest IMF World Economic Outlook is the downward revision of 2013 growth forecasts—from 1.8 percent  to 1.5 percent for advanced countries, and from 5.8 percent down to 5.6 percent for emerging and developing countries.

But the report contains an even more extraordinary admission (highlighted in Box 1.1, written by Olivier Blanchard and Daniel Leigh): the IMF were wrong about the fiscal multipliers it has been using in its forecasts and policy recommendations by a factor of 3! Yes, instead of .5, which they had been using, Blanchard and Leigh estimate the fiscal multiplier to be closer to 1.5.

What this means concretely is that the IMF and all the other mainstream economists who were using the lower multiplier severely underestimated the negative effects—on investment, consumption, and unemployment—of the austerity measures that have been imposed in the wake of the economic crisis of 2007-08.

Paul Krugman feels vindicated. Jonathan Portes is willing to give the IMF credit for “going back, looking at their forecasts, analysing what went wrong, and saying very clearly ‘We thought the impact of fiscal consolidation on growth would be relatively small. We got it wrong.’”

For me, there can’t be any forgive and forget. The one thing mainstream economists are supposed to get right is the calculation of multipliers. And they didn’t. And the lives of millions of people have been ruined as a result.

Usually, the call is for the IMF to get out. Now, it’s one of their own who has decided to quit.

Brian Doyle, a former IMF division head for Israel and non-eurozone nations Sweden and Denmark, admits in a letter [pdf] to Shakour Shaalan, dean of the executive board of the International Monetary Fund, that he is “ashamed to have had any association with the Fund at all.”

His letter reads, in part,

This is not solely because of the incompetence that was partly chronicled by the OIA report into the global crisis and the TSR report on surveillance ahead of the Euro Area crisis. Moreso, it is because the substantive difficulties in these crises, as with others, were identified well in advance but were suppressed here. Given long gestation periods and protracted international decision-making processes to head off these global challenges, timely sustained warnings were of the essence. So the failure of the Fund to issue them is a failing of the first order, even if such warnings may not have been heeded. The consequences including suffering (and risk of worse to come) for many including Greece, that the second global reserve currency is on the brink, and that the Fund for the past two years has been playing catch-up and reactive roles in the last-ditch efforts to save it. . .

There are good salty people here. But this one is moving on. You might want to take care not to lose the others.

Is this not an indictment not just of the IMF but of mainstream economics as a whole?

 

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A reader sent me a link to one of his new songs, a contribution to the project of creating a culture appropriate to imagining and creating a better world, including a better economy.

Lonnie Ray Atkinson’s songs also include “Economic Hitmen” (with TSOL and Zep Hurme) and “How We Gonna Make Wall Street Pay” (with Anitek).