One of these things is more awkward than the other

by Alex Hern

I suppose that, for all the scorn I laid upon people suggesting that maybe the new, ‘feminine’ IMF under Lagarde might not treat the poor the same way Strauss-Kahn treats women (sidebar: look at this tweet now, and remember that power inequalities are real, are dangerous, and just because you happen to have a police force who can’t always be bribed with a twenty on the street, doesn’t mean that wealth doesn’t let one evade justice just as effectively in the UK or USA as it does in whichever country you like to pretend you’re better than), something has changed in the last few months, because up is down, black is white, the IMF is not preaching austerity in the face of financial meltdown.

Actually, better qualify that. The IMF is still, of course, preaching austerity in the face of financial meltdown – it’s what they do. If you have a state – any state, really, but especially if that state provides its services directly, rather than going through a wasteful, corrupting, and often self-defeating network of private enterprises – and you have to ask for help from it, it will want its blood money. There’s no suggestion that that has changed. What has changed is the “friendly advice” it gives countries that have enough cash left in the coffers to not have its demands forced upon them. Countries like mine, for instance.

Things have got bad enough – or look like they might get bad enough – that its standard advice of “cut cut cut!” doesn’t really stand up any more.  Obviously, the change of heart isn’t because in this situation that advice isn’t useful, because that advice isn’t useful in any situation, or at least, any situation where the IMF’s advice is being asked. In boom times, sure, pay off the deficit, but anyone suggesting that the time to do it is in the middle of the biggest recession in a lifetime is doing so for any number of reasons, but responsible fiscal policy is not one of them. No, this change of heart has come about because this time, the IMF has the horrible experience of actually being listened to. For the first time since it was created, and in the middle of the largest problem it has ever had to deal with, its advice has become the orthodoxy. And it sucks.

If the deficit cutting programs, here, in the US, in Ireland and France and Greece and Iceland – and in Germany, really, because although they haven’t been slashing there spending in a “there is no plan B” manner, they haven’t really been expanding their expenditure to a great enough extent to really stimulate demand – if those deficit cutting programs carry on, growth and demand will basically go down the plughole. And the IMF knows it, you can see the fear in Lagarde’s eyes, as she furiously backtracks. You can tell it from the way she covers her tracks, with,

“We didn’t change our minds about the dangers of too much debt, but over the current state of the world economy,”

Because that makes even less sense. If debt is as dangerous as you’ve been saying, time and again, then in a world economy this bad, you should be shouting your message even louder. Instead, there’s this Damascene conversion, because if countries don’t stop listening to you, and soon, there’s not going to be enough international money to have a fund for it.

I guess that was an attempt at a pun? Weak execution, A for effort, see me about remedial punmanship.