If you’ll oblige me, this post is largely by Dominique Strauss-Kahn, head of the IMF – an institution famed in the past for forcing third world countries to sell off their water supplies etc on the grounds that the market knows best…
IMF press release of his April 4 speech states:
Mr. Strauss-Kahn called for more progress with financial sector reform, including across borders, and called for a financial activities tax.
“In designing a new macroeconomic framework for a new world”, he stated, “the pendulum will swing—at least a little—from the market to the state, and from the relatively simple to the relatively more complex”.
Mr. Strauss-Kahn called for policymakers to pay more attention to inequality and social cohesion. “The lethal cocktail of prolonged high unemployment and high inequality can strain social cohesion and political stability, which in turn affects macroeconomic stability.” He suggested that inequality, which was a factor in the Middle East, might also have been among the root causes of the global crisis, and that sustainable global growth is associated with more equal income distribution.
“We need a new form of globalization, a fairer form of globalization, a globalization with a more human face”, he said. “The benefits of growth must be broadly shared, not just captured by a privileged few. While the market must stay center stage, the invisible hand must not become the invisible fist”.
Mr. Strauss-Kahn stressed the virtues of enhanced cooperation and multilateralism in the post-crisis world, noting that “the great challenges of today all require a collective solution”
When the IMF are rejecting the free-reign of the market, stating that the pendulum must swing from market to state, you know that when you’re advocating neo-liberal policies you’re on the wrong side of history.
But National, in the absence of an economic plan, keep doing precisely that. They’re slashing-and-burning public services to pay for their tax cuts for the rich; they’ve decided that the market will save Christchurch, and magically train the skilled craftsmen needed; they aim to privatise our energy firms…