Thread by @GeneralTheorist

My retrospective of Lagarde's time at the IMF and what this means for ECB policy over the next 8 years. It's a frightening prospect.

thegeneraltheorist.com/2019/09/02/goo…

WHAT DO these serious cases have in common? They are all characterized by deeply flawed macroeconomics and political influence on decision-making—and there is typically a quid pro quo involved. For Osborne, Lagarde delivered on austerity and Brexit analysis in the joint pursuit

of his political goals and her career ambitions. In Greece and Cyprus, Lagarde sided with Germany throughout—allowing deeply flawed analysis to pass her desk to keep the Greeks under the European thumb and impose costs on the Cypriot taxpayer. In exchange, it was widely rumored

Lagarde was under consideration for a European Commission role in 2014—but was ultimately still needed in DC. When it came to analysis of the euroarea, the IMF has been incapable of balanced assessment of fiscal-monetary policies; the assessment of the euro has been stale and

thoughtless throughout. But this was necessary so that German fiscal policy would not be under scrutiny, ingratiating herself with Chancellor Merkel. In the case of Argentina, despite being castigated for being under political influence throughout the euroarea crisis, Lagarde was

found under the influence of the US Treasury in signing off on a program that hinged on a continuing monetary policy Ponzi scheme.