Christine Lagarde, IMF Chief, Warns US About Short, Medium, and Long-Term Problems; Like All Keynesian Clowns, Lagarde Does Not Want to Deal With the Present
Courtesy of Mish.
For a brief moment, I almost thought Christine Lagarde, head of IMF, gained control of her senses.
The Telegraph headline IMF chief Christine Lagarde says US needs to rein in its banks is the illusion that briefly (very briefly) led me astray.
Not to fear, in the end, Lagarde proved in spades that she is the same Keynesian clown as before. Let's take a look where she makes sense, and doesn't.
The opening paragraph (below) about "challenges everywhere" makes sense, although there is little substance.
Speaking ahead of key meetings for the IMF and the World Bank early next month, Ms Lagarde called on political leaders to "get beyond the crisis in the eurozone" as "we have challenges everywhere".
I am in 100% agreement with the following paragraph.
"The United States has short-term and medium-term challenges as well, none of which are really properly addressed at the moment," she said.
Then Lagarde immediately proved she is still a Keynesian clown.
"In the short term, there is the issue of the fiscal cliff, which is a combination of fiscal cuts that will stop early in 2013 and public spending that will be withdrawn in 2013, if nothing happens. That will be automatic, and it will create a major contraction of the deficit, yes, but also of growth, which would be a threat to the global economy. That’s for the short term."
The only reasonable interpretation of that paragraph is that Lagarde does not want the US to address its fiscal problems "now".
Keynesian clowns are very good about pointing out the need to do something in the future. They never want to address the present.
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