Walking On Thin Air

Submitted by Looking Glass

So Candles Under The Bed attracted only two comments. I am almost disappointed.

Where have the phoenix and associates gone? Slavery, race and immigration induce a multitude of comments but the national debt remains sacrosanct, entombed in a conspiracy of silence. Is reality a luxury we cannot afford?

Mr. Blackett opines that had the forensic investigation suggested had been done within the “honeymoon period of the first 100 days in office along with the implementation of FOI and ITAL legislative policy…he would have healed a major rift in local politics…” Legislation and policy cannot solve intractable problems, especially those of the human mind. Are you blaming the PM for failure to expose the sins of the phoenix? Had he done so you would be singing a different song. Why was there no call for transparency etc before 2006-7? Be careful what you wish for. Someone in London opined that “Lylli lagrani must be shaking.….”

Can you name an incumbent Prime Minister or President who, having inherited an empty trough and humongous debt, fulfilled pre-election promises in the first 100 or 200 days? Not even President Obama with all available resources was able to do it.

Though politically and otherwise unencumbered (the word should ring a certain bell), I have no problem with one’s political leaning. In fact I expect the opposition to ‘censure’ the government and be the ‘watchdog.’ But feeding the public spurious information is detrimental to the country perched on the edge of the socio-economic cliff. The use of convenient diagnoses and half truths in defense of the phoenix beclouds the problem and is self-defeating to party and country. The infinity of half truths is bigger than the infinity of truth. Fallacious diagnoses beget fallacious remedies. Doubt me ask the economist.

As to the rift in local politics are you talking about the BLP? No Prime Minister can heal the rift between the local parties. Political democracy demands conflict and rift between competing parties. Politics is a process in which two or more parties (and individuals) enter into ‘conflict’ (competition if you prefer) with each other to gain power and to realise the policies they favour, which may or may not be in the best interest of the country.

You (unintentionally I believe) admitted the PM inherited a “bloated government bureaucracy,” but cried shame when the PM sought to terminate some high salary irrelevant positions. The phoenix had already taken and ‘distributed’ much of the “fat from the HOG.” Some big homes and cars will change hands and bank accounts frozen or emptied (foreign banks are no longer safe havens), but most of the fat will not be recovered. Streamlining government comes at a price. Removing the rest will have a negative impact.

Yes the “mediocre” PM has no choice but to comply with IMF recommendations. He inherited and empty trough and was left to manipulate turbulent waters with a spaghetti paddle. It would be folly to expect him to water the garden from behind the black ball (snooker) with an empty bucket. The good Lord needed barley loaves and fishes to feed the 5000.

Mr. Blackett echoed some interesting thoughts on banking that address some of the basic issues. I am not sure if our government/central bank can dictate the interest rate and other charges a private bank should charge the public. Perhaps it should apply to banks taken over or stimulated by the government. Banks are in business to make money for their investors not to provide jobs or support the “public good.” First responsibility is to the investor not the country. Much of the problem would have been avoided had the National Bank not been sold. The lowering of interest rates and other charges would have forced the other banks to follow suit, enlarged client base and enhance profitability. Instead at least one other bank was allowed to enter the market.

Am I to understand you have the right to borrow to facilitate a lascivious sedentary life- style and to decide the price you will pay? Borrowed time comes with a price. If we were to live within our means and reduce dependence on loans and credit the banks would be forced to lower interest rates and other charges.

Elsewhere it was said that the last regime narrowed debt to 6% of GDP in 2006-2007. If that were the case sustainability would not have been a problem. The IMF (2006) would not have projected debt at 75% of GDP by 2011, the 2008 report would not have noted the “75% likelihood the debt ratio will exceed current levels,” and the 2009 recommendations would have been quite different. Substantial ongoing GDP decline and borrowing mega billions would be required in order to increase the debt ratio from 6% to 75% in four years. As was noted (Indebtedness: No End In Sight) “there is no way the current debt (which will increase) can be retired in say twenty years…We may be looking at a large black mass sitting on the edge of serfdom.”

Devaluation occurs in many ways. Rising consumer prices is a form of devaluation, especially for those on fixed income. More buys less. The Geneva based UN conference on Trade and Development concluded that the current system of currencies and capital is not working and proposed a complete overhaul of the monetary system. Under consideration is (I believe a single world currency) an organization to create and manage real exchange rates between countries and to adjust to inflation differentials and development levels. Whatever the outcome it is unlikely we can or will escape currency and other forms of devaluation

The maiden voyage of the world’s largest cruise liner, the 6,296 capacity Oasis of the Seas and its six captains is scheduled for December. Amenities this “neighbourhood and destination better than most islands,” include a park with 2,000 bushes and trees, Central Park, Boardwalk, Royal Promenade, Pool and Sports Zone, Fitness Centre, Entertainment Place and Youth Centre. Rates start at less that $800.00 for a seven night cruise. Are we included in the itinerary? Check with Royal Caribbean.

The Bank of England warned against thrift. In the UK where consumer spending is 2/3 of total spending “any attempt to reduce consumption is likely to pull down on output and hence household income… making it harder for households to increase their savings.” (Telegraph 21/09/09) Given tightening credit conditions one wonders how much saving can occur in a country with increasingly high levels of unemployment, meager export /revenue generating possibility, and dependant on fickle tourism where the vast majority of total consumer spending is on imports. The future doesn’t look bright