It's Wednesday, and as usual I scout around various issues that I have been thinking…
IMF now claiming continued inequality risks opening a “social and political seismic crack”
It is Wednesday and I have had lots of unscheduled commitments (that just come out of the blue) to attend to today. So not much writing. I did have time to read the latest IMF – Fiscal Monitor, April 2021 : A Fair Shot – which was published on April 7, 2021. The schizoid nature of this institution continues to evolve and it will be hard for the austerity mavens to unambiguously use it as a cover for their arguments when they resume their call for public sector spending cuts etc. Music follows.
IMF Update
I don’t have time today for a full review of the Fiscal Monitor publication.
But suffice to say, the tone coming out of the IMF has shifted significantly from when it was leading the charge in destroying nations and increasing income and wealth inequalities.
Don’t think for one minute, however, that the institution has abandoned mainstream macroeconomic thinking.
It hasn’t.
But it has opened a sort of schizoid image – talking about, on the one hand, a global innoculation program “paying for itself” (that is, still framing things in terms of making fiscal cuts), while, on the other hand, imploring governments to maintain fiscal support and target policies that “aim at giving everyone a fair shot at lifetime oppor- tunities by reducing gaps in access to quality public services.”
The Chapter in question:
1. “documents how large preexisting inequalities have worsened the effect of the COVID-19 pandemic, while the crisis, in turn, has escalated those inequalities”.
2. Shows that “Countries with higher relative poverty have had more reported infections, especially where urbanization is more extensive.”
3. “Policy responses should recognize that various aspects of inequality (income, wealth, opportunity) are mutually reinforcing and create a vicious circle.”
Far from advocating its infamous structural adjustment packages (SAPs) that decimated public education and health systems in the poorer nations from the 1970s onwards, the IMF is now wanting governments to be:
Investing more and investing better in education, health, and early childhood development ….
Strengthening social safety nets by expanding coverage of benefits …
Supporting lower-income countries that face especially daunting challenges …
Yes, it does talk about the need to be “Mustering the necessary revenues”. But the shift in narrative towards a recognition that austerity has worsened inequality and that inequality, in turn, damages economic growth as well as delivering other undesirable outcomes, is notable.
In the Foreword, the IMF Director of the Fiscal Affairs Department wrote:
… it is crucial to give everyone a fair shot at life success. Preexisting inequalities have amplified the adverse impact of the pandemic. And, in turn, COVID-19 has aggravated inequalities. A vicious cycle of inequality could morph into a social and political seismic crack. To reduce that risk … [we call] … for tackling inequalities in access to basic public services-health care, education, social safety – and for strengthening redistributive policies.
Not what you would have read from the IMF in 2010, for example.
So the next time, some conservative politician or a self-styled progressive politician start talking austerity or austerity-light in the latter case and try invoking the IMF as an authority, they will find their task less straightforward than in the past.
A good initiative for the Arts sector
A regular reader of my blog and sometime commentator, Mark Russell, who lives in the North of England, wrote to me this week about his new venture. I don’t often promote these type of things but I thought that this project was worth giving credit to.
His initiative is spelt out in this article – On the road to a music recovery (April 19, 2021).
The arts (particularly live music) sector has been ravaged by the pandemic.
My own band – Pressure Drop – has not played live since March 2020 and our first live gig is now on Thursday, May 6, 2021. It would great to see Melbourne readers of my blog turn up to help the venue on that night.
I can even talk about MMT in the breaks!
So any initiative that provides some boost to musicians in this rather bleak period is to be welcomed.
Mark Russell has converted an – Airstream – caravan to overcome the fact that the “the idea of tightly-packed 2,000-strong venues is over for a long time”.
The caravan conversion allows a small stage in the mobile, ‘pop up’ venue to be created with great lighting, sound, and capacity to live stream the event to larger audiences.
You can also read about Amber Sinclair’s ‘Rock School Bus’ in the same article. Another great initiative with significant equity benefits.
MMTed Update
Following the development of our edX MOOC = Modern Monetary Theory: Economics for the 21st Century – we are now working on the next MMTed project, which will be run within our own auspices.
The upcoming courses will be:
1. A re-run of the introductory MOOC – MMT 101.
2. An advanced topics course building on the MOOC.
I cannot give a precise date for when these courses will come on-line.
We have to reengineer the MOOC to free it from edX type formats but we are working on that project at present.
We have also started filming the second (advanced) course.
Our experience now in putting these courses together – it is a rather time-intensive and complex exercise – is that a new course takes about 6 months to get off the ground, once the all the filming, writing, design, production etc is done.
The re-engineered MOOC will not take that long as we just have to edit the video content.
So I expect the MOOC to return on the MMTed platform within 3-4 months and the advanced course to be available around October 2021.
We now need more funds to keep the project going.
If you are able to help on an ongoing basis that would be great. But we will also appreciate of once-off and small donations as your circumstances permit.
You can contribute in one of two ways:
1. Direct to MMTed’s Bank Account.
Please write to me to request account details.
Via PayPal – the PayPal donation button is available via the MMTed Home Page or via the – Donation button – on the right-hand menu of this page (below the calendar).
Please help if you can.
Music – Africa from Rico Rodriguez
This is what I have been listening to today while working.
It is one of my favourite trombone players – Rico Rodriguez – who sadly died in September 2015 at the age of 80.
He was born in Cuba but made his name in Jamaica after being taught by none other than Donald Drummond, one of the all-time best brass players from Kingston.
The undoubted best jazz, reggae trombone player of all time.
He played devotional music (rasta) with Jamaican hand drummer – Count Ossie in the 1950s and later with Winston Rodney aka Burning Spear.
He then moved to the UK and started playing jazz reggae before joining The Specials and playing ska.
His best album was in 1976 – Man from Wareika – from which this track – Africa – is taken. It is a really hot album.
One other track – Lumumba – is his tribute to – Patrice Lumumba – who was executed in a coup in February 1961 at the age of 35, while he was president of the Democratic Republic of the Congo. He was a major driver of the independence move and the break from the oppressive colonialism of Belgium.
His death was shocking in that he called on the UN to intervene against political instability promoted by the Belgians and the foreign mining companies, aided and abetted by the UK and the US.
The UN Security Council was petitioned by the Soviet Union to demand that Lumumba be released from prison after the military take over and to call on the Belgians to exit the Congo and to cease supporting the insurgency against the elected President.
The vote went 8-2 against the petition. That was on December 14, 1960. A month or so later he was executed and the announcement was withheld for a further three weeks.
Lumumba was a supporter of Pan Africanism and was thus despised by the Belgians and the US. The CIA had already tried to kill him but failed. It was a very sordid affair.
Anyway, Africa … I hope you enjoy it as much as I have for the last 35 years or so. I still keep putting the record on my turntable.
That is enough for today!
(c) Copyright 2020 William Mitchell. All Rights Reserved.
The goons of the imf can’t be sorry for the misery, because they did eveything they could to expand misery.
It’s kind of like beeing sorry for George Floyd’s murder and then continuing to murder other people, on a daliy basis, which only happens if the victim is black (which now includes kids).
The goons the imf serves allways have had a phillantropic agenda. They like to appear in the news, saying they will give away some money to some charity purpose.
So this “sorrow” comes as a cheap charity, while the imf keeps pushing for corporate bailouts.
In the eurozone, governments are feeding huge quantities of money to oligarchs, the same ones that would had failed long ago, if their debt wasn’t nationalized and paid for by the tax payer.
They are making it in a reverse way of what was done during the GFC fallout.
They are trying to prevent bankrupcies, by giving money away, so that banks won’t get stranded in a tsunami of defaults.
But they will fail again, and the blame is already beeing bestowed to the common man, who was granted a postponement on his mortgage payments.
I would like to suggest that MMTed look into the possibility, if you have not done it already, of opening a patreon account. You could get even recurrent monthly donations.
Maybe the commissions make it not a good idea, but there are some very successful projects there, so I think it’s deserving to investigate it.
As a socialist, albeit one who grounds his political vision in Bellamy rather than Marx, it recently became clear to me how we will move, IF we move, from neoliberal capitalism to a socioeconomic system more humane and environmentally sustainable. Bellamy, in describing the Great Revolution overturning the rule of the rich (which, of course, never occurred), said that the monopoly capitalists (of the first Gilded Age) actually had done the revolutionary movement a service. They had consolidated massive sectors of supply and distribution and subjected them to planning, management, etc., creating large-scale, interconnected entities which could be transformed to serve public instead of private ends. We’re still a long way from such a transformation, but recent Davos rhetoric about redefining corporate purpose to include humane and environmental considerations, and the somewhat similar IMF rhetoric Bill points to in this post, indicate that we’re at least paying lip service to moving a bit in the direction Bellamy described. Plutocracy has become too entrenched to be able to imagine a revolutionary movement overthrowing the rule of the rich in one fell swoop or series of swoops. Yet there does seem to an opening, c/o of the pandemic, to take some baby steps toward a socioeconomic system where profit does not completely supplant concern for people and planet. IMHO, that’s the best we can hope for after my Boomer generation, having initially shaken things up, allowed us to devolve–no, eagerly contributed to our devolving–to the pathetic point at which the pandemic found us.
The Instant Misery Fund, as Cameroon economist Tchundjang Pouemi called it, now desparately trying to recover credibility and stay relevant.
Ha, Instant Misery Fund. I am going to use that from now on.
Hey, things are so bad even IMF acknowledges it.
Sadly, I would almost believe them before the prof said they still haven’t changed their DNA.
Lesson here is that I’m such a sucker and forgive/forget way too easily.
For people who don’t follow this, they still think IMF and world bank are good organizations for the poor and poor countries.
This is completely unrelated to anything but I started reading your macro econ textbook and you mention the movie braveheart in it. This movie is so bad and inaccurate that it should not be mentioned under any circumstances. Thanks
Hi Bill,
What is your opinion of china’s belt and road program?