Wednesday, February 26, 2014

The IMF Wades In on Inequality

The hard Right have transitioned seamlessly from the fight to thwart action on climate change to their even more desperate rear guard effort to defend inequality from nasty, money-grubbing reformers.

Well, Movement Conservatives, have just lost a potential ally, the International Monetary Fund.  The IMF has just released a report that undermines every Rightwing Shibboleth on the perils of reversing inequality. what is likely to be viewed as its most controversial conclusion, the IMF said analysis of various efforts to redistribute incomes showed they had a neutral effect on GDP growth. This last point is expected to dismay rightwing politicians who argue that overcoming inequality robs the rich of incentives to invest and the poor of incentives to work and is counter-productive.

The paper, written by Jonathan Ostry, the deputy head of the IMF's research department, and the economists Andrew Berg and Charalambos Tsangarides, comes after several years of heated debate over the path that developed and developing countries' economies have taken since the financial crash and whether their recoveries are sustainable.

Anti-poverty charity Oxfam welcomed the report, saying it shows "extreme inequality is damaging not only because it is morally unacceptable, but it's bad economics".

It added: "The IMF has debunked the old myth that redistribution is bad for growth and demolished the case for austerity. That redistribution efforts -essential to fight inequality- are good for growth is a welcome finding. Low tax and low public spending are clearly not the route to prosperity."


Purple library guy said...

That's nice and all, but the IMF is always releasing good research. The policy wing seems to be hermetically sealed off from the research wing. When their next bailout package goes through, it'll turn out they've got all the same "And in return for this loan you have to privatize everything in sight, kill the unions and do austerity" conditions that they've always done.

The Mound of Sound said...

True enough, PLG. I just wish this report would be dropped on the desks of Trudeau and Mulcair so they could clear their heads of that "no new taxes" nonsense.

Purple library guy said...

Amen to that. Technically, on the Mulcair side it's just personal taxes--the NDP still call for at least a little bit of increased corporate taxation--but it's nowhere near good enough.