The recent austerity programmes in Europe are funded by the Central Bank , but run by templates of the IMF.
The track-record of the IMF in other places has caused a lot of concern and even more damage as its prescriptions have devastated the abilities of countries under its sway from recovering without foregoing their financial sovereignty and falling into a deeper vicious cycle of dependency and vulnerability to external interference without their best long term interests at heart.
The leader of Malaysia regarded withstanding the IMF dictates for South East Asia as one of the most imperative decisions he ever made , whilst the former President of Brazil considered the paying of all debts and escaping the policies of the IMF as the first essential steps for one of the greatest Poverty Alleviation programmes in the History of Mankind , only bettered by China , and matched by Iran ( countries that also escaped the influence of the IMF).
In this vital contribution Stiglitz speaks from personal experience of being head advisor of the World Bank and Economic policy adviser to many Governments about the destructive negative role past and current IMF programmes and policies have for any nation unfortunate enough to have to suffer them.
Neo-Liberalism should be recognised as a phenomenon that thrived more under Democrat (The Clinton Years) and New Labour ( the reign of Brown) than necessarily being only viable under Republican or Conservative Governments.To this end the blame of the establishment of an unfair order of Globalisation has to go to the decade in which so-called social security administrations were in place than the sterner right-wing orientated ones.
It takes a former Nobel Prize Winner to give weight to the mountains of critiques by many opposing the corporate led Globalisation Project. "Now he speaks out against it: how the IMF and WTO preach fair trade yet impose crippling economic policies on developing nations; how free market 'shock therapy' made millions in East Asia and Russia worse off than they were before.."
Coming from where he does , Stiglitz is going to come up for strong criticism for being less a gamekeeper turned poacher.But rather as a gamekeeper who thinks the reservation and poacher-management could be better organised as this review clearly shows in pointing out the shortcomings of the Stiglitz narrative of macro-economic management of world trade.
Meanwhile, Stiglitz presents his argument as one of common sense versus the doctrinaire “market fundamentalists”. He attacks the ideological motivation of the Washington Consensus, yet his own prescriptions are often no more commonsensical, and certainly just as ideological. The only difference is that where the IMF takes its cue from Hayek, Stiglitz takes his from Keynes.
Here explains why using the GDP figures are not the best or even a reliable measure of a Nations overall wealth.
This comment on the video sums it up pretty well:
"Simon Kuznetsk, the individual who created the formula in 1934 warned when presenting it to Congress, that “The welfare of a nation can scarcely be inferred from a measurement of national income.” He know that the government could use the formula to paint whatever picture they wanted based on spending. For example, the "New Deal" was championed as a miracle yet it was governmental spending that put it in a positive light not the true health/strength of the American economy."
And here The Nobel winning Economist explains how the disastrous Iraq War led to the recession.