This is really quite astonishing

So, Ms, Lagarde points out that inclusive growth is important. People need to buy into the idea that all are becoming better off.

So, what can be done? The answer is not for policymakers to hold off on reforms that boost productivity and growth. Rather, policymakers should consider options that make these reforms more palatable from both a growth and distributional perspective.
With this in mind, our staff paper looks at a number of country cases and analyzes how well-targeted measures can complement reforms and offset adverse distributional impact.

So, for example, Malawian maize subsidies are grossly distorting, get rid of them. But part of that positive sum gain might be paid out to poor farmers as a basic income, say.

Awight then. And Ritchie tells us that the takeaway here is as follows:

The argument is clear.

First austerity does not work.

Second, trickle down does not work.

Third, what you promote as a mechanism for growth matters: not all growth is equal and much is inequality inducing.

Fourth, what matters most of all then is growth aimed at reducing inequality. Nothing else is sustainable.

Absolutely none of which is actually said by the IMF nor Ms. Lagarde.

What they are actually saying is go gung ho for growth but spread the benefits around a bit. And they most certainly do not say that inequality increasing growth is unsustainable. They have, after all, heard of the Kuznets Curve, something our professor of practice in international political economy seems blissfully unaware of. A curve which two of the countries the IMF mentions, Malawi and Ethiopia, are undoubtedly on the wrong side of currently, inequality-wise.

Or, the TL:DR version – he’s making shit up again.

11 thoughts on “This is really quite astonishing”

  1. Nothing else is sustainable.

    What does this mean? That the growth cannot be maintained? That it isn’t ‘environmentally friendly’ in some obscure way? Does he even know what he means?

  2. Sorry, not buying the socialist crap.

    Markets have no duty to third parties. People not involved are entitled to NOTHING.

    That you make a buck off me when another guy doesn’t have a buck doesn’t demand you give him part of your buck.

  3. Sadly he stops at “Fourth” so this is well short of his personal best and only slightly sputum-flecked rather than ‘Full Straightjacket’.

    Still worth having a gander at if only to read the contribution of one ‘Betting Man’ and the profs gracious riposte. Who is Betting Man?

    Having missed the original Venn Diagram exposé of legend, I wasn’t going to miss his latest use of visuals which was a little disappointing, if I’m honest.

    However, contributor Mike Parr runs the prof a close second for self-importance and I hope he savoured the fulsome accolade from Anton Ackermann.

  4. Tim

    “making shit up again”

    With Murph, instread of “A, therefore B” hasn’t it always been more a case of “A, and today I fancy making a (probably unrelated) political point B”.

    He freely admits that it’s all politics? In that context, why would anyone ever expect anything more substantial or rational from him?

  5. “Ms Lagarde”

    Shurely in the interests of the evenhandedness that our MSM is justly renowned,, she should now be described as

    “convicted criminal Ms Lagarde” ??

  6. Rob

    I always find in order to understand the enemy, even is he is pure evil, you have to beard him in his lair but kudos to you for having the discipline to avoid visiting the site…

  7. The contribution by Dr Keith Crainshaw underneath the Fat Prof’s post of a YouTube video was fascinatingly nuanced

  8. I see from the oracle Wikipedia that some consider the K curve theory refuted by observational evidence (Fields, 2001) when applied to inequality. Nowadays it’s possible that politicians the world over are smart enough to share the growth a bit and keep the voters happy throughout.

    Seems reasonable and feasible to me in principle. Comments from the floor?

  9. But the K curve includes the idea that people will spend some of their extra wealth on reducing inequality. That is, it falling because of redistribution doesn’t obviate the observation at all.

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