IMF Accused of Sanitising Trump's Economic Disruption in Latest Report
The International Monetary Fund has come under fire for what critics describe as "sane-washing" the economic crisis unfolding under Donald Trump's administration. The organisation's latest World Economic Outlook update, titled "Global Economy: Steady amid Divergent Forces," has been condemned for using excessively calm language that fails to capture the reality of escalating trade tensions and geopolitical instability.
Banal Language Masks Escalating Trade War
The timing of the IMF report has raised particular eyebrows among economic observers. Just one day before its release, Donald Trump announced sweeping tariffs of 10% on goods from eight European nations including the UK, Germany, and France, threatening to increase these to 25% unless the US gains control of Greenland. Despite this dramatic escalation, the IMF report merely noted that "trade tensions have continued to abate but remain subject to occasional flare-ups."
Critics argue this language dramatically understates the situation. The effective tariff rate paid by Americans has increased more than sixfold compared to this time last year, with projections indicating further increases ahead. Yet the IMF describes these changes with the understated term "meaningful," prompting accusations that the organisation is deliberately downplaying the economic disruption.
Omissions and Normalisation of Extraordinary Events
Perhaps most striking is what the report omits entirely. There is no mention of Greenland, Venezuela, or even Donald Trump himself - despite these being central to current economic tensions. The report scrubs away numerous extraordinary events that defy any pretence of normality, including Trump's withdrawal of the US from 66 international organisations and his establishment of a personal "board of peace" with a $1 billion membership fee.
Economic commentator Greg Jericho notes that "normality has left the room, the building, and was last seen driving 160km/h towards the edge of the Grand Canyon." The IMF's insistence on maintaining professional decorum, critics argue, effectively normalises behaviour and policies that violate international norms and threaten global economic stability.
AI Investment as Economic Panacea?
While downplaying geopolitical risks, the IMF report places significant emphasis on artificial intelligence as a potential driver of future economic growth. The organisation suggests that rapid AI adoption, supported by substantial investment in related infrastructure, could significantly improve productivity and boost medium-term growth prospects.
However, the report acknowledges potential downsides, noting that AI investments "could fail to deliver earnings commensurate with their lofty valuations" and trigger significant market corrections. This focus on technological solutions has been criticised as a distraction from more immediate political and economic threats to global stability.
Consequences of Economic Pretence
The fundamental criticism levelled at the IMF is that its restrained language and omission of key political realities creates dangerous complacency. By presenting the global economy as "steady" and "resilient" despite clear evidence to the contrary, the organisation arguably provides cover for further disruptive actions.
As one commentator puts it, "This pretence just gives Trump more permission to smash everything and anything that takes his fancy." The concern is that international institutions' commitment to maintaining professional decorum and avoiding political commentary has crossed into dangerous territory, where extraordinary events are normalised and fundamental threats to economic stability are minimised or ignored entirely.
The debate raises fundamental questions about how international economic organisations should respond to unprecedented political circumstances that defy conventional analysis and challenge established norms of international cooperation and economic governance.
