I have ever-increasing comtempt for the IMF.

They are certainly not a popular organisation in less developed countries they have ‘helped.’ Their track record is appalling.

I think it likely that given I am not an economist, they know more about economics than I do but it seems to me, that their pronouncements are based on ideology rather than evidence.

They have only changed their predictions on the UK economy because it would be too embarassing not to.

Whilst for anyone who knows about the IMF, it is the ultimate insult to Osborne, that EVEN the IMF thinks he’s got it wrong, I suspect that it is not a good strategy politically. Given that most of the public think the IMF probably know what they’re talking about, for Labour to pick up on it, it just gives them credence and thus helps Osborne to get away with his claim that austerity was a necessity and not a choice.

AFZ

Please don’t use graphs with an axis that doesn’t start at zero unless a) you’ve got good reason to and b) you know what you’re doing. It’s a hugely dishonest way of representing your point. The fact that everyone else does it does not make it OK.

Case in point: Look at your first chart. At a glance, it looks like the IMF prediction was a third of the “reality”. Now represent that same chart with the y-axis starting at zero and it presents a very different picture. Why start the axis at 7%? Why not start it at 7.37% and then you’ll have a tiny bar for the IMF figure and a huge (comparatively) bar for the reality.

Yes, almost everyone does the same but it’s a blatant distortion of facts in all but certain scenarios and does no credit to whatever the rest of the case that you’re trying to make.

WHy call it austerity when it isn’t anything of the sort?

Real terms spending is actually set to go up, and we are currently burdened with a simply massive budget deficit.

We are spending money WE DO NOT HAVE, not being austere with money we do.

Assuming Osbourne does manage to cut the deficit to near zero by 2015, we will be paying about 10-15bn a year in debt interest on it. Which is an appreciable % of the education or defence budgets.

Hawkeye is right. On a sensible axis, all three of the IMF’s projections are actually pretty decent efforts; only someone statistically ignorant with an existing axe to grind against the organisation could possibly disagree. Oh.

What Hawkeye said.

There’s a fair point to be made here without using silly graphs that appear to show unemployment and inflation at more that double the levels predicted by the IMF.

The graphs might be silly, but there is clearly no intent to deceive when the actual numbers are written in big letters at the top of the bars. As a criticism of the issue he is highlighting this is a distraction.

No. 5.

Type the figures into excel and ask it to make a bar chart.

It puts it to that scale automatically. No my doing. As long as the right hand axis accurately reflects the measurements (which it does). Then those of moderate intellect and above can see past that.

The *ENTIRE* point of using a graphical chart such as these are to present a visual representation. An excuse of “well the figures are clearly shown” or “the axes are labelled” completely misses the point, especially when you are only displaying two numbers. For heaven’s sake, if that’s your argument then you might as well just have quoted the numbers in a table:

IMF Prediction = 7.38%
Current Reality = 8.10%

The fact that you didn’t display it like the above is because you wanted to produce a visual representation – but the one you went with is hugely misleading on a visual basis. If you still think it’s valid, then answer why the axis doesn’t start at 7.37%, or 1% or any other number – are you going to say that those are all equally valid despite the fact that they will show completely different visual representations of the same numbers?

And please, the excuse that “that’s what Excel gave me” is exactly what I was asking you not to say when I said don’t use the excuse that everyone else does this.

No. 8,

My email address is eclarke04@qub.ac.uk

put the two figures into an excel sheet. Create a bar graph to your liking. Include a brief instruction how you did so. And I’ll replace the one above.

Eoin

“Then those of moderate intellect and above can see past that.”

There’s no need for snide remarks. I am well capable of “seeing past” the shape of the graph to the figures it represents, and (as I said) it’s a fair point you’re making. But if you have to “look past” the shape of a graph to see the real picture, there’s really no point in using the graph, is there?

If the TPA put out a similar graph that appeared to show (say) this year’s spending on disability benefits towering over last year’s, following a modest increase, we wouldn’t hesitate to criticise them for representing the figures in a distorted and misleading way – whether or not someone of “moderate intellect and above” was capable of “seeing past” the shape of the graph.

Apologies for banging on Eoin, I hadn’t read your last post when I wrote that one.

@ 6

“The graphs might be silly, but there is clearly no intent to deceive when the actual numbers are written in big letters at the top of the bars. As a criticism of the issue he is highlighting this is a distraction.”

If there’s no intent to deceive, why use such misleading graphs in the first place? Indeed, why use the graphs at all when you could just write the numbers in big letters? Graphs should illustrate; these ones just invite readers to draw the wrong conclusion if they don’t look closely enough.

I don’t like the IMF, but this article does not actually explain why the difference between predicted and actual unemployment of 7.38% and 8.10% is enough to show that it is “out of touch” and “deserves to be ridiculed” – I assume most predictions are out to some degree, so what’s an acceptable error margin? As such, it does kinda give the impression that the reader is supposed to go: “Look how small the bar representing the IMF’s prediction is! What morons!”

I’m sure these left-wing flavoured blogs get infiltrated by right-wing agents trying to discredit our thoughts and attempt to brainwash us with mkultra type mind control… does anyone else get this impression?

@3 “Real terms spending is actually set to go up”

The irony of this statement is that real spending may increase due to the increase in unemployment, rather than spending on real activity (like the NHS) which is being cut back.

Similarly the deficit is higher because growth is lower.

@10

I did indeed call out the TPA for their creative graphing the other day:

http://zelo.tv/oGjc4w

But as you can see, there was also selective use of data points at work as well.

The best reply was number 3 mentioned only in comment 14, but in a piffling way.

The left is totally confused over this whole issue because they do not understand principles of morality nor are they able to appreciate reality.

Only the true ‘extreme right’ can see this for what it is, which is that we have record government spending and record government debt.

One half of the left want taxes to be redistributed to the poor (and then bizarrely decry bailing out the banks/ taxation going to private companies as capitalist) and the other half want the bank bailout because they fear that not bailing out the banks would lead to a very bad recession.

The extreme right say government spending and debt go hand-in-hand and that government has little automatic right to take the fruits of our labour as it does not own us.

So they oppose all entitlements whether for rich or poor. They say that the bailouts (for the rich) are merely prolonging the inevitable and that the banks are keeping their bailout money because the true scale of the corrupt debt based products are being kept off their balance books and are off the scale. They look to the example of Iceland where they did not bail out their banks, but jailed bankers, endured a deep recession but came out of it. They say, if anything, that citizens personal bank accounts should have been protected, that investment and savings banks should be separated.

The left say this is due to a lack of regulation, but actually it is due to cronyism which is a feature of big government (something the left just cannot understand). In the States, the good laws (e.g. Glass-Steagal) that had stood were taken down by ex-bankers working in the government.

The overiding fact is that in the UK this crisis has come at a time following good economic growth, but one where the welfare bill was more than the income tax revenue and that record numbers of working age people were on long-term incapacity benefit. Furthermore, the EU (backed by the left) has allowed huge numbers of low skilled migrants into this country meaning that 70-90% of the 2million jobs that were created went to foreign born people. Yet, almost 1 in 10 of the workforce is declared as unable to work long-term which is risible. Despite the huge increase in the welfare state, the income gap has not decreased (something predicted by the extreme right). Huge increases in spending in healthcare has yielded nothing much as per Gamon’s Law.

Whilst the left has shrieked hysterically about ‘the cuts’ when the facts are broken down, they have little to say in an academic way about what is really happening. For example, the NHS ‘cuts’ amount to 0.3%, but the real problem is it’s 20 billion overspend coming despite a doubling of it’s funding over 13 years.

So forgive me for saying, but I find a lot of what is said by the left to be pretty banal and think that much of what is said to be academically dishonest and driven by blind dogma.

I once went to an Owen Jones talk to confront him specifically about the above. No worthy reply was given – just anecdotes and attempts to make the discussion personal (are you saying the unemployed are lazy etc.). And this is the left – they start off on morally flawed ground and the flaw just propagates.

Good post.

If I call myself a football tipster, and I predict a 2-0 win for United at kick off, and then City score and I change my prediction to 2-1 United, and then City score again and I change my prediction to 3-2 United, and then five minutes from time City score a third and I suddenly decide that City will win 3-1, should I be taken seriously?

Apparently the IMF thinks it should.

the purpose of the IMF has seemed, for a very long time, to trick nations [and ergo their populations] into entering worse debt.
cos then the IMF cashmasters get paid more, and for longer.

no?

if in doubt, have a look at South America. I believe there was a book released a while back entitled something like ‘Confessions Of An Economic Hitman’ that featured the IMF rather heavily, and in an overwhelmingly negative light

@ Roshan

“we have record government spending and record government debt.”

No we don’t.

“the welfare bill was more than the income tax revenue”

What is established by this comparison between an arbitrarily-chosen portion of public spending and an arbitrarily-chosen source of tax revenue? That wages must be too low? That rates of income tax must be too low? That too much income tax is being avoided or evaded? That unemployment is too high? Welfare benefits are too generous? People are living too long? All of the above? None of the above?

“almost 1 in 10 of the workforce is declared as unable to work long-term which is risible”

Is it? Let me ask you a question: bearing in mind that around 15% of people have health problems serious enough to kill them before they reach the age of 65, what percentage of people of working age should we expect to have health problems serious enough to prevent them from working for a period of months or years? (Don’t forget to include all the people who have serious health problems between the ages of 16-65 but nonetheless live into retirement.)

“I once went to an Owen Jones talk to confront him specifically about the above”

What, *specifically* about left-wing immorality, debt, spending, bank bailouts, redistribution, taxation, entitlement, cronyism, immigration, sickness and disability, the welfare budget, inequality and NHS overspending? The poor chap must have been dazzled by the pin-sharp focus of your questioning.

To be fair to the IMF, they did not predict the Eurozone crisis, so their figures are off partially because of this.

And to stop being fair to the IMF, it’s their bloody job to predict the blindingly obvious liklihood of a Eurozone crisis…

Incidentally Eoin, you can adjust the scale on the axis in Excel – its one of the reasons to use it really.

Do the IMF push anything but austeriy anywhere even if the economic conditions are favourable? I ask this a as a genuine question becuase all I have seen from them is aussterity?

HM Treasury conducts a regular monthly survey of independent published forecasts of the UK economy – the latest of which was circulated on 1 October:
http://www.hm-treasury.gov.uk/data_forecasts_index.htm

About two dozen forecasts are covered overall in the monthly surveys. Most are produced by banks and other financial institutions but those are accompanied by a selection from independent think-tanks such as the NIESR and the Item Club.

The forecasts are worth checking out for comparison with the Treasury’s own published forecasts and those of international institutions like the IMF and the OECD. The next important set of Treasury forecasts for the UK economy will come out with the Chancellor’s Autumn Statement and the Pre-Budget Report scheduled for 29 November 2011.

I have seen plenty of occasions over the last three years on here when lefties have latched on to IMF forecasts that they found favourable to score points. All along I have warned that the IMF are useless forecasters. That really is the problem of cherry picking stuff to confirm preconceived prejudices. Only pay attention to those forecasters who have a track record of being accurate. I will not say who tend to be the best forecasters, because you probably hate them also.

The IMF did give a big thumbs up to Mr Osborne that the coalition immediately latched onto. Yet, ignored an IMF report the following week that said contradictory expansion was woo. Everyone wants evidence to support their ideology rather than truth.

The IMF were rightly criticised in the past for the type of harsh conditionality that they attached to their lending. However, let’s speak about things rationally rather than the usual cartoon view of the world that the left so love. The IMF do not get involved with a national government because things in that country were all sweetness, light and prosperity. The IMF are the last resort when a nations economic policies have failed and no private sector lender will lend the country any more money. By definition that country is unable to raise the money from their own citizens to pay for their state. For the IMF to lend them money with no change in economic policies is hardly dealing with the fundamental problems in that country.

Nearly every problem that requires IMF intervention relates to balance of payments issues. Quite simply the nation is consuming more than it produces and private lenders are no longer willing to finance the difference. Deceitful national politicians are then quite happy to use the IMF as a convenient scapegoat during the pain of adjustment to cover for their own failures. I would agree that in the past the IMF have sometimes made things worse. However, they did not cause the initial problems. Moreover, the IMF are lending member countries money and have every right to expect to be paid back. Nowadays, conditionality is much more flexible.
http://www.imf.org/external/np/exr/facts/conditio.htm

Go and ask Irish or Greek government officials whether they would prefer to deal with the IMF or those nice and cuddly social democrats at the EU an ECB that the left love. The Irish were taken aback at how punitive and vicious the EU was in contrast to the reasonableness of IMF officials who were warning about overburdening the Irish. The EZ debt crisis would not be in the current mess if they had followed the IMF. The IMF MO for a country in deep trouble is to immediately impose losses on your creditors and devalue your currency. The euro-periphery can’t devalue because they are in a monetary union. However, they could impose losses on creditors to ease the debt burden for those countries. Guess who has been opposed to creditors taking losses all along? Yes, the European officials, not the IMF.

* contractionary expansion *

These days I don’t have work access to the NIESR quarterly Economic Review and I can’t afford the steep pay barrier to the NIESR web site but the Review periodically performs the useful task of including a paper making detailed comparisons between the leading forecasting agencies and HM Treasury.

It often happens that some agencies are better at one time series – like, say, “Consumption expenditure” – while some other agency is best at forecasting GDP or the inflation rate and so on. My recollection is that the NIESR – and often the Treasury – come out of these comparisons fairly well compared with other leading agencies.

The present is especially callenging for forecasters generally because we are hanging on the Eurozone speedily resolving its acute problems which carry the risk of international contagion. Also, I suspect that IMF forecasts tend to be afflicted by small “p” political concerns – meaning the IMF cannot produce forecasts which imply deep criticism of the policies of G10 governments because of the market and political repercussions. But recall that its recently appointed chief economist – Olivier Blanchard – is widely respected, except, perhaps, by dedicate anti-keynesians. He set out his assessment of global economic trends in a recent interview with The Economist:
http://www.economist.com/node/21531356

His popular textbook on macroeconomics has been warmly endorsed by Charles Bean, now a deputy governor of the Bank of England and previously the Bank’s chief economist. Prior to that, he was a prof at the LSE.