The FT seems to have lost the plot this morning, gleefully reporting:
The International Monetary Fund has dropped its criticism of George Osborne's austerity drive after revising up the UK's growth forecast by more than any other leading economy.
Britain's growth outlook was upgraded to 1.4 per cent this year and 1.9 per cent in 2014, significantly above official UK forecasts. The fund noted that “recent data have shown welcome signs of an improving economy, consistent with increasing consumer and business confidence”.
Un increase in GDP based on a housing bubble that leaves most people untouched and most people with declining wages and falling savings (for the time being) is not basis for suggesting there is confidence in recovery.
It's a basis for suggesting some people are losing the plot.
NB: There is a a much more balanced report in the Guardian
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I think it’s worth remembering Galbraith’s remark:’economic forecasting exists to lend respectability to astrology.’
The IMF are charlatans.
Interesting item in yesterday’s keiser Report claiming that the money awarded to people from the PPI scam has contributed more to ‘growth’ than all the years of Quantitative easing!
Lending support perhaps to Steve Keen’s argument for QE for the “Public”? No, we couldn’t have that – think of the moral hazard this would create for the “little people”!
You couldn’t make this stuff up……..
So true
One method that will almost certainly get the economy moving is to double (or more) the minimum wage!
The reason why the economy is bumping along the bottom (despite a £1.4 trillion bailout of the banks, £375 billion of QE and the lowest BoE interest rates in history) is that ordinary people do not have money to spend. give them money to spend and they will spend it on goods and services; money that will circulate and be picked up by businesses and help production (what’s left of British production, at any rate) creating a money multiplier to help real growth.
Pimping useless assets up will create little real work. giving people money to spend on goods and services almost certainly will!
Frankly, the IMF lost the plot on development and economic growth many years ago. It is totally discredited in development circles. The Washington Consensus institutions – IMF, World Bank and WTO imposed structural adjustment policies on developing countries which had disastrous consequences for the growth of their economies and the wellbeing of their populations. The EU is imposing similar policies on the southern Mediterranean countries (Greece, Spain Portugal) with the same consequences. From my research experience, I consider the IMF to be an overblown bureaucracy well past its sell-by date. I have no doubt that the same criticism can be applied to the other organisations.
Simon, I find the Keiser Report on RT totally fascinating. Max Keiser frequently uses rather intemperate language (which would not be allowed on the BBC!!) but his discussions with Stacey and his guests in the second half of the programme provide an insightful analysis of important economic issues. I was hopeful that Channel Four would screen the show to gain a wider ‘mainstream’ audience but that would probably detract from the unique formula of the programme.
If proof was needed that the IMF is trying to find its way around with a compass in the economic equivalent of the “Bermuda Triangle”….