It’s quite ironic that following Filipinos’ renewed admiration of the virtues of simplicity embodied in the late former president Corazon Aquino, the issue of the moment raging across the Philippine Media landscape is President Gloria Arroyo and company’s $20,000 dinner in New York City following her one-hour meeting with U.S. President Barack Obama.
But where all other two-bit bloggers or “reporters” have gone before on this topic would be a no-go-zone for consistently original moi. Rather I am more inclined to highlight a gem of potential insight in the following excerpt taken from today’s INQ7.net editiorial that was all but obscured by the Inquirer editor in his unimaginative take on that brouhaha:
Perhaps government officials should remember the example of former Prime Minister Lee Kwan Yew of Singapore, one of the richest countries in Asia, who came to the Philippines many years ago with his wife and a few aides aboard a commercial jet. Taking a commercial airline did not diminish his stature as a leader in Asia. If anything, it impressed many people that the leader of a rich nation had the humility and practical good sense to travel aboard a commercial airline and not in a private jet.
Comparing Filipino politicians to Lee Kuan Yew is like comparing the jeepney with its garish and flamboyant skin-deep ornamentation to a German-engineered automobile like, say, a BMW with its clean understated exterior that hides a powerful feat of engineering art within.
As such, an opportunity to make an excellent point was missed by the Inquirer editor by stopping at highlighting how the simplicity of the ways of a leader of a vastly wealthier nation does not diminish his stature. What is missing is the more profound truth of how a deep well of substance will always shine through the thin veils of our personal cosmetics.
Elder Statesman Lee Kuan Yew earned his stripes from envisioning a Singapore exceedingly different from the Singapore he came to power into in the 1950′s — and actually seeing that vision through.
Note how, in the single sentence above (highlighted in bold so as not to be missed), I’ve utterly nullified any remote possibility for serious apples-to-apples comparison between three generations of Filipino politicians collectively and the one-and-only Elder Statesman.
But how hard is it really to at least even demonstrate a will to emulate Lee?
Fear not as I spell it out in simple terms in a brilliant “Roadmapping 101″ cheatsheet I’ve developed for our would-be “presidential” aspirants.
There are just a handful of elements that pea-brained politicians need to fill in to demonstrate minimal evidence of some sort of capacity to govern properly:
- The Situation
- The Issues
- Positions taken on the Issues
- Actions to realise the stated Positions
The following illustrates (using a limited example) how any moron with a brain can stitch all this together in a coherent and internally-consistent framework to guide their subsequent SIX YEARS OF SERVICE to be delivered to the Filipino People:
So Mr/Ms Politician, you too can stop insulting the intelligence of Filipino voters and come up with something that looks kind of like the above in Four Easy Steps. It all depends on whether or not you are truly serious about the job at hand.
It’s simple, really™ — though not for the small-minded.
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I wonder why candidates, particularly those who are wont to highlight their ‘management skills’, do not take this sort of Business 101 approach to developing a platform – or for that matter, doing their job once they get elected. The simple answer, of course, is that they are playing to the masa, which then turns into a bit of a chicken-or-egg debate: are the politicians such slackers because that’s what their people expect, or do the people have such child-like expectations because the politicians are slackers?
This is a beautiful process, really, from a politician’s point of view, because it can be used no matter what his perspective his. If the politician wishes to impose a strong personal ideology and assessment of issues, he can do that. If, on the other hand, he wishes to approach it from the point of view of what the people want, those answers can easily be substituted in all the little boxes.
Either way, they ought to make it mandatory that this form be filed along with the other papers for candidacy.
If our candidate politicians revealed their “plans” by way of the above framework, they’d have to deliver (assuming of course that they didn’t fill it with vague, half-assed, or circular incomprehensible statements). But I’m getting ahead of myself. Personally, I believe most of them would be unable to go further than taking a position on issues. They’d be stumped with exactly how they’ll back up their positions with a real action plan. Chiz’s penchant for motherhood statements immediately comes to mind.
You’re right Ben K, it ought to be mandatory. Those who can’t finish should automatically be disallowed to run. (But then, in the absence of some form of oral defense prior to filing for candidacy, they’d have their paid hacks type one up for them easily.)
Nice job again, benigz.
Swamping with more documents than necessary an already very swamped COMELEC might already invite disaster.
If each presidentiable is required to accompany his papers when he files his candidacy with x number of samples of this proposed “cheatsheet”, then even these documents do no consist as basis in determining who the nuisance candidate is from who is not.
Even a brilliantly written cheatsheet does not mean that the presidentiable would be the best candidate from the pack, does it?
In other words, Roadmapping 101 by presidentiables are done by their ‘social engineers’ and as such, are works in hypocrisy if not in Rhetorics 101.
Irony completely goes over your head, doesn’t it? And I’ll ask the question that I would’ve thought you’d have long ago gotten tired of hearing: You got a better idea, Mr. Contrarian?
We must get used to Primer’s consistency in playing hardcore opposition.
I mean, we can’t impart insight onto one singularly devoted to disrupting our progress.
And he doesn’t lack listening skills; he just makes sure he appears to.
His ultimate short term dream must be for benign0 and BongV to give up. I have the same dream for Primer.
the best way is to ignore him (as i have done a short while ago). let him talk to himself and enjoy his own monologue. the guy reminds me of an old classmate in high school who keeps on raising his hands just to call attention to himself. except for one or two other posters here, it seems the general consensus in this blog is that this guy is way out of his league.
ako I dont even bother to read whatever he writes here anymore…
Socialism simply works.
http://www.spiegel.de/international/world/0,1518,642310,00.html
This is interesting — Western Europeans having a chance to do real-world experience (target — poverty-stricken African community) for an experiment on the effects of money-transfer) :
For Pinas, two questions come to mind. The first is finding a group of Chinese, American or Western Europe donors for a similar project in Pinas. The second is the benign0/bongV question — culture. It is not known (to each, his own hypothesis) what will be the results if a Namibia-experiment were to be done in, say, Basilan or with an Aeta or Bohol community.
the basic question, upn, is where will the government get the money to be transferred? from the relatively few “rich” until they themselves become so impoverished they would become transferees rather than transferors? aid from wealthy nations such as america is not a bottomless pit. even if several nations agree to “permanently” subsidize the poverty of another country, there’s a point when it has to rely only on its own labor, productivity and resources. if, by working hard, intelligently and efficiently, i could keep myself above water, why would i continue doing that if all that my neighbor had to do is wait for government handout ( partly taken from the excess of what i make over what i need to keep body and soul together)? socialism is a “noble” aspiration but realistically, it is a prescription for equality of poverty.
Entrepreneurship? Private property? Profit?
Looks like capitalist to me. :)
No it doesn’t.
http://mises.org/econcalc.asp
I now realise why the majority of Filipinos admire Cory’s “simple, honest lifestyle”. It’s because looking for a Filipino politician in the Philippines who has a really simple and honest lifestyle is like trying to find a needle in a haystack. If you stop to think about it, someone who acts as they should be is already regarded as a saint in a society that has deception running through their veins.
And I had another realisation too, I wondered why there is only one “hero” recognised who stood against the Marcos administration when in fact there where so many journalists and activists who were also persecuted and murdered during his regime. When will they be acknowledged as having served their country the way Ninoy did? I guess if one is not from a prominent family, people hardly document or notice what you do. There are more people whose work in helping the country have gone under the radar just because they lack a PR campaign, while everyone throws the word “hero” like some people deserve to be called one just by merely acting appropriately.
There are many who have been recognized — just not as well-known to more people here and abroad as Cory.
The ones recognized were the ones whose faces were always seen by the cameras. However, the “foot soldiers” who do the heavy lifting and the grunt work – the ones who do the actual organizing, the door-to-door campaigns, the mobilization planning, the agit-prop in the field – are pretty much unrecognized.
Precisely. That’s why I think the Aquinos should not be singled out for their “heroism”. They’re not the only ones who stood against an oppressive regime. Problem is they are always on TV. Now their kids and grandkids are on TV.
“What is missing is the more profound truth of how a deep well of substance will always shine through the thin veils of our personal cosmetics.”
My God, I hate to tell you because you are inflated quite enough, thanks, but sometimes you are simply brilliant. The decision chart is also superb. One can only hope that, with the growth of a Filipino “adult” internet experience, more and more good minds will be put into play in such a way as to humiliate those who would dare approach the people with lipstick and rouge, or a shabby lice-infested wig.
Joe
Cool framework Benign0.
benignO,
nice one. if only this could become standard.
mr. primer,
i just don’t get why you’re always against pro-active efforts. would you rather we keep doing the same things we’ve been doing all these time? i think it would even do your candidate some good if he outlined his plans in a clear outline such as this.
you keep on saying rhetorics. well, compared to the ‘infotainment’ being dished out by our politicians nowadays ‘rhetorics’ such as this are way better.
“outlined his plans in a clear outline” bwahaha.
to primer:
SITUATION : Fernando-Ole is not likely to win President-2010
ISSUE : People are not well-informed about Fernando
POSITION : People well-informed about Fernando will vote for Fernando
ACTION : To inform people about Fernando achievements and Platform
OR:
SITUATION : Fernando-Ole is among candidates for President-2010
ISSUE : People when they see Fernando pluses-and-minuses will NOT vote Fernando
POSITION : Fernando chances improve when people see Fernando but not Fernando pluses-and-minuses
ACTION : Entertainment!!!
I recall Yew was the one who took a rather hard line approach to enforcing law in this country. People here would compare it to martial law, but that comparison is rubbish. There wasn’t martial law in Singapore; the laws were enforced well and the culture actually promoted discipline. Hence, that’s where my mom is pestering me to go for my next job, and to have a better life.
to Chino: For your next job interviews, click on this one.
http://hotjobs.yahoo.com/career-articles-10_ways_to_be_liked_in_your_job_interview-947
Some excerpts (also relevant to normal day-to-day interactions);
4. Don’t be a road block.
Interviewers are seeking candidates eager to take on challenging projects and jobs. Hesitance and a nay-saying mentality . . . . seen as a negative.
5. Don’t be petty.
. . .
6. Don’t be a liar.
Studies show that employees lie frequently in the workplace. Lying won’t get you a job. In a job interview even a slight exaggeration is lying. Don’t.
10. Don’t be a switchblade.
Normally the switchblade is thought of a backstabber, often taking credit for someone else’s work. In an interview setting, the switchblade can’t help but “trash talk” his former employer.
==============================
Pause for a few seconds — why would the person across the table even care???? — should you be inclined to do chit-chat trash-talk about Philippine politicians.
Nice one UP n Grad. This is best shown to the other Filipinos out there. You know who.
i think i read somewhere that lee kwan yew recognized that he cannot change everyone. he supposedly realized the truth that one cannot teach old dogs new tricks and so he concentrated on the younger generations.
it seems to me any leader who wishes to make significant change in this country should consider this same approach. put more focus and effort in educating the younger generations, shaping their values and preparing them to be better citizens and leaders.
a buddy once said in jest – the only way to change the Philippines is to rid it of Filipinos, then repopulate it.
Haaaay, masochists!
Bert:
the masochists – are those who keep on doing the same thing, but expect different results… hahahaha
I have to agree with BongV’s friend… though in seriousness and not in jest… hehe.
Benigno
So I suggest that you decamp Sydney and set up shop in Manila. You can stand for public office and we will know if your platform plez will work .
And for those twirling with a Singapore slinger without knowing what they are imbibing….
BTW, S’pore under Lee engaged in massive social engineering by demolishing the kampong and its mentality and replacing it by flats that can be had with meritocracy. Lee abolished “exclusive schools” by not recognizing them as universities and making entry to NUS by quota and through merit. If this is applied to the Philippines, Ateneo and La Salle should be demoted back to the prep school they really are and make UP as the only university in the country. UST may be allowed to operate but it may be restricted in offering degrees.
Lee remade Singapore into a ‘fine” city. Fine, but he made it one of the most boring cities on the planet. Shopping can only get you as far in terms of entertainment. It had Malaysia angst for a time but it knows that KL can easily turn off the tap. Manila is more exciting than S’pore. The boredom barely covers the clamor for expression underneath that when Go Chok Tong became PM, he liberalized a bit. The younger BGen Lee continued with loosening up and under his watch, legalized gambling has been allowed. But S’pore still has that boring tag.
But Lee’s social engineering failed to fully implement meritocracy. The “bumbay” is your doorman, the malay your taxi driver, the hokkien Chinese your salesgirl, the Oxfordian Chinese your MPs.
S’pore is a small country. It did its own way that worked that Malaysia kicked it out. The Philippines cannot be run like Singapore. But local governments can be run like Singapore (Viva Marikina!). By doing this the power will be at the local level and the patronage that the Palace doles out can be reduced.
So BAYANI TAYO! LOL!
to his credit, bayani really did a good job of fixing up marikina.
I’ve heard good things from people who live in Marikina. He doesn’t get much credit outside of Marikina. In fact, many taxi drivers I’ve spoken to hate BF’s guts, but the common denominator was that they’re all inconvenienced by some traffic management device of his. Small price to pay for some order on the road.
Actually, lots of Singaporeans are moving to Australia and New Zealand.
They are also working as senior executives in KSA, Qatar, and UAE.
Social engineering as defined in the wiki
Social engineering is a concept in political science that refers to
efforts to influence popular attitudes and social behavior on a large
scale, whether by governments or private groups. In the political arena
the counterpart of social engineering is political engineering.
For various reasons, the term has been imbued with negative
connotations. However, virtually all law and governance has the effect
of changing behavior and can be considered “social engineering” to some
extent. Prohibitions on murder, rape, suicide and littering are all
policies aimed at discouraging undesirable behaviors. In British and
Canadian jurisprudence, changing public attitudes about a behaviour is
accepted as one of the key functions of laws prohibiting it.
Governments also influence behavior more subtly through incentives and
disincentives built into economic policy and tax policy, for instance,
and have done so for centuries.
In practice, whether any specific policy is labeled as “social
engineering” is often a question of intent. The term is most often
used by libertarians, free-market thinkers, and traditionalists as an
accusation against anyone who proposes to use law, tax policy, or other
kinds of state influence to change existing power relationships: for
instance, between men and women, or between different ethnic groups.
Political conservatives in the United States have accused their
opponents of social engineering through the promotion of political
correctness, insofar as it may change social attitudes by defining
“acceptable” and “unacceptable” language or acts. The right has itself
been accused of social engineering due to its promotion of
Abstinence-only sex education, Sodomy laws, and state sponsored school
prayer.
There is more to life than entertainment. There is also this thingie
called “raising a family”. Manila’s pollution, trash, smog, traffic,
floods, kotong cops, OA rallyistas, poorly equipped hospitals and
classrooms, substandard roads, pedophiles, extreme poverty versus
Singapore’s clockwork urban living – that’s a no brainer. Moreover,
the income you make from your wages in Singapore, and the relative ease
of securing tourist visas for Singaporean citizens means they can get
entertainment elsewhere – Paris, London, Sydney, NYC – can’t say the
same for Pinoys.
Speaking of meritocracy – the malay pinoy is the doorman/ taxi
driver/ salesgirl / pimp / prostitute / – and your Oxfordian
Chinese/Basque mestizos/landlords are your shadow MPs.
Korea did a Singapore – and it worked. So did Japan at the turn of the
Meiji era.
As for the Philippines… NOTHING WORKS IN THE PHILIPPINES – trust the
jologs and the hybrid kologs and jonyos… to keep it normal – SNAFU..
FUBAR complete with alibi :)
Sure thingie – first he gotta go to the firing squad, and be shot like
Rizal… LOL.
Our politicians inherited the power culture of our Spanish Colonizers. They put too much importance on themselves. Look at
those sumptous dinners and expensive hotels. Financed by badly finished projects from our taxpayers’ money. While the projects allocated by this fund is badly constructed.
It is crookedness with flaunting. You steal, then you flaunt to
the public what you have stolen.
walang manloloko kung walang nagpapaloko
hyden:
as dely atay atayan would say at the end of every episode of john and marsha –
kaya ikaw john, magsumikap ka,
gamitin mo ang utak mo tuwing election,
wag mong ibenta boto mo,
dahil ang pinambili ng boto mo, babawiin mula sa buwis na bayad mo..
o ayan.. napakaengot mo kasi..
magtiis ka… magdusa ka..
katangahan ang itinanim mo..
kaya kagaguhan ang aanihin mo.
di pa rin natuto..
LOL
@benign0:
It has just (strongly) occurred to me, Platform Plez does not only demand sound reasoning and competency of candidate aspirants (that wasn’t supposed to be redundant; I meant “those who intend to run”), it also serves as a kind of covenant, an agreement to which we hold each of them accountable whether they win or not. For the genuine article, that’s not a problem. But for the bozos, that’s a terrifying proposition.
I think that’s also where you’d instantly see a line separating the good apples from the bad. The former would subject themselves to the will of the citizenry, by participating (directly or indirectly) in the exercise that is Platform Plez — but the bad ones, those with only selfish intentions, would not. In other words, the aspirants who behave like they need not explain themselves to the people have no intention of serving the people. They won’t play your game; you’ll play theirs. It’s already a show of power, despite not having won yet. Bad sign.
We need to dare these bozos to take part, otherwise THEY’RE CHICKEN.
They might be chicken, but 93% of voters are like earthworms.
So, it works for the chicken.
Brilliant metaphor! :)
Another worthless dribble from bO……
The blind leading the blind……. If the problem is over population then that would mean there is no economic problem… A country cannot grow its population beyond its means to support that ever increasing population.
In some of the more advanced economies of the world their have a reversing population demographic by choice.
Pinoys ares still hard wired around a strong familist agrarian culture for the most part. The family is the extent of community. The larger community is still an alien construct. That is perfectly normal for feudal societies.
In the more advanced industrial societies the link to the rural family farms no longer exist. They are predominantly urban communities. Economic survival no longer depends on the family. The industrial division of labor has split up the family for the most part. Urban families in advanced economies are generations away from the family farms. The pivot revolves around the manufacturing sector.
However in a mainly agrarian economy with the colonial established trading enclaves ( dependently integrated with the global economy) Pinoys are culturally confused about the state of their development. Look at the political dynasties. Look at the Arroyo clan. They have amassed wealth through participating in politics. Partisan politics is about competing family interests. It is as it should be in a feudal society. It is not about the larger community much less the many communities that should comprise a nation. It is perfectly normal…..
Here is a question for bO. What do you mean by capital?
excuses excuses excuses.
if you are still an agrarian econommy in the knowledge economy – you might as well make a determination if you want to remain a hermit like NoKor – or intervene and change the material conditions from which arise the cultural manifestations.
Mr j_ag:
(1) That stuff about reproduction that you nitpicked on is just an example for illustrative purposes and not the point of this blog. In fact this blog is really just the colourful wrapper around the real substance of the framework I mention above.
(2) I discuss the concept of capital extensively in the first section (with the title “Capital”) on Chapter 4 of my book. Click here to check it out.
Oh you mean capital goods….. Can you explain to one and all why some of our natives tribes could not make the leap from hand looms to power looms. Also explain to one and all the fact that the Igorots in the North actually built the terraces to brong water from the lowest point in the terraces to the higher elevated terraces.
Crude but that is called an irrigation system.
No one from the outside taught them how to construct those crude capital goods even before the white guys showed up.
Unlike your indigenous people in Australia who were all butt naked when the white guys arrived.
So the Europeans had developed a system of apprentiship and master under a guild system. It took hundreds of centuries for this to happen. During the time of Alexander thorugh to the Roman times till medieval times there was no patent or copyright system.
Do you want the Philippines to reinvent the wheel? We buy all our capital goods from abroad. So what? Are you suggesting that we start an industrial policy? But that is a proactive form of mercantilism.. Our mongoloid sinic neighbors all did it. It is no secret that Spain was the last Western Euopean country with Portugal that industrialized.
Do you understand the implications of what you are suggesting?
J_ag:
The homeland flips love to reinvent the wheel – and they use a square.
They reinvent wide smooth roads into pothole ridden roads that fall apart after five years.
They reinvent school buildings into buildings with stealth skin so you can’t see it.
They reinvent boozing bozos and turn them into presidents.. oh my golly
And.. having said that. I’d like to introduce the word.. Leapfrogging.
To make it readable to the layman, let’s use the wiki definition
An example in the Philippine context, this meant skipping landlines and rolling out more cellular phones.
****
On mercantilism – Developing your own technology and industry base does not necessarily mean you will become mercantilist.
As defined – mercantilism is an Economic theory that stressed governments’ promotion of limitation of imports from other nations and internal economies in order to improve tax revenues.
When you develop your technology and industry base AND limit imports – then that’s mercantilism.
When you develop your technology and industry base AND, DO NOT limit imports – then that’s NOT mercantilism.
Filo, you are spot on with how you see Platform Plez being a catalyst for a change from the current low-thinking-applied approach to Pinoy politics into one that truly embodies a mature democracy — one where accountability and being forward-looking rules.
- The Matrix – 2010 Edition is a constant reminder of how much or how little the current crop of politicians have actually worked on changing their pitch to the voters from one that merely insults their intelligence to one that works with their intelligence;
- Lest some dimwit says that it is “all too hard”, our Roadmapping 101 crash course on building a coherent vision for our sad nation will de-mystify the whole process and make it accessible even to the most feeble-minded of candidates.
So therefore, if politicians show some disinclination to actually demonstrate a bit of brain this coming election it illustrates something a lot worse than simply being “chicken”. I’m planning to keep that Matrix as an enduring record of what’s been said/published over the course of this exercise by each of these bozos.
We should take the policy that all candidates are:
Bozo until proven real.
It can’t be any more complicated than that. Certainly not as complicated as how the average political “expert” makes it out to be in their relentless focus on yakking about personalities and affiliations to, alliances with, and defections from political “parties” that, at the end of the day, stand for NOTHING.
There needs to be a collective memory to counter the “historical amnesia” we are renowned for that BongV mentions in his recent blog article.
Bozo politicians have so far been able to get away with just about anything because, well, Pinoys simply cannot be bothered to remember. We even forget the sorry track record of subsequent Edsa “Revolutions” when it comes to the busines of delivering results.
“bozo until proven real” dapat lang!
if it were up to me i’d institute a “guilty until proven innocent” policy on incumbent officials facing allegations of corruption that will remain in effect for as long as the system is not fool-proof.
Having read this article: Comparing the Elder Statesman with the Filipino Politician by benign0, I find it to be more of the same old refrain. Poverty is caused by children (who cost a lot of money) and those horribly naive Catholics (who just can’t understand that f*cking is fun… even if it results in all those resource-eating by-products AKA children).
Let’s just ignore inconvenient facts such as aging countries like Japan and Sweden whose problem is the exact opposite: they don’t have enough kids to bolster the workforce and are now importing guest workers who naturally send the wealth of that country overseas. I SAID IGNORE IT!!!
Avoiding poverty is well and good, but the author’s neat little chart doesn’t exactly point point out how we can all become rich. I don’t think this is an oversight at all. Not only will his ‘plan’ not deal with poverty, it will actually make things worse down the line.
Well, here’s my response chart: http://img9.imageshack.us/i/economy.jpg/
the secret to wealth since the dawn of time has always been savings. Savings over time. Savings between generations.
So why don’t the present system of savings work? There are too many stories of old people who worked and saved their whole lives to find that they can’t buy anything worthwhile and wind up as burdens to their children. Unless you have some incredibly marketable talent, I don’t see a Ferrari for you on the horizon. Anyone, however, can put a few pesos away for a rainy day. They really do add up over time.
The problems in this country do not consist of distinct and unconnected elements as many people think. It’s all interconnected. All of them are the unintended end result of deliberate policy to fix one thing or another. If we were talking about medicine, you could say that these are side-effects of the cure of some past problem.
Rather than blaming old scapegoats and doing the same thing that caused our problems in the first place, maybe we should consider a new alternative:
Protecting our savings from governments who say they know better what to do with our money than us, the people who earned that money in the first place. Don’t matter who sits their butt in Malacañan Palace come next election. Your money is their money and they will do what they want with it… for your own good.
PS. Before anyone here wonders why I’m making such a fuss about what appears to be an add-on to the “real article” of how politicians should act, I think we can safely ignore all that crap about Lee Kwan Yu. It’s a fluff piece. The chart there is the real story. Funny how it has nothing to do with old Lee.
Francis:
Point of clarification.
Can you please cite the sentence which can be interpreted as
“Poverty is caused by children (who cost a lot of money) and those horribly naive Catholics (who just can’t understand that f*cking is fun… even if it results in all those resource-eating by-products AKA children).”
Yeah, its a sacrastic point on how people believe that: 1) overpopulation exists, and 2) it is root cause of poverty.
As I said, this article is a bait-and-switch.
First it talks about how politicians should have a clear platform so that ordinary people can wade through the political BS. Good so far.
Then it compares the political behaviour of Filipino politicians with that of ‘a great statesman’ like Lee Kwan Yu. Good so far.
Then it ends with a nice little example chart showing how nicely logical it is solve poverty through de-stigmatizing birth control.
Now if this chart on the other hand, said something generic like ‘Action A’ or ‘Action B,’ then I would have happily enjoyed the article.
I’m glad you’re picking up on Benign0′s format, it’s a good clarifier.
What I would like to see added to the format is:
IS CAUSED BY: How did this darn thing start anyway? Who is responsible?
EXAMPLES:
COUNTER-EXAMPLES: You have to anticipate preconcieved notions about what you say.
ha ha ha!!!
There are really many good at stupid posts …. Chinas consumption or expenditure side is 60%-70% capital formation and 30%-40% household consumption or expenditures. The right combination for a developing economy. They have what is called a nationalist industrialization policy. They also practice a mercantilist monetary based policy framework. Today the globe is realizing that one day their currency will also become accepted as an international currency. But the Chinese are doing it at glacial speed.
The opposite holds true for the Philippines. A mercantilist policy framework is not simply a high tariff wall which is part of fiscal policy but a complementary mercantilist based monetary system… A country isolates itself from the global financial system as the issuance of debt (private and public) within a country is a political power that resides in a sovereign state. Hence you have fiat currency. If a country gives that up you have no national economy. We have given it up on the altar of the free market and free trade. For that we continue to suffer. Here in the Philippines they teach economics centered on an exclusive school of thought. They even have a school of economics in the premier state university. We even have an extension of that school centered on an agency of government that implements policies around a doctrinal school of economy theory. The U.S. executive has its own Council of Economic Advisers but politics takes a central role and policies are left to politicians.. The Congress.
That is critical in the development of a capital market. Hence during the early stages of industrial development all countries practiced capital controls on the movement of foreign and domestic capital. The U.S. then and now China and India are premier examples. The U.S. being the commercial republic that it is even mandated a bankruptcy regime for states and the private sector. The economic provisions of the U.S. are straight and simple.. Manage foreign trade/Almost free trade at home amongst the new colonies that became states. Manage the value of currency.. Plus their legal system derived from Anglo Saxon common law.
Without this you cannot develop a domestic capital market. You become simply an extension of the more powerful countries that have mature developed surplus based capital markets.
Under this scenario you become economically dependent and subservient to foreign capital. Just look at China and India and the tremendous dose of fiscal stimulus that they poured into their economies to offset the downturn in business and consumer expenditures. Both pumped in over 10% of their GDP. They also do not mind debasing or devaluing their currencies to give them the ultimate in tariff protection… That is the ultimate mercantilist tool…
I personally am for a country like the Philippines making their currency fully convertible and letting the financial markets take away the price fixing decision making process from a weak and corrupt monetary system run by the BSP. Price fixing and controls do not work in the long run… They tend to become set in stone. I consider our BSP the most corrupt institution in the Philippines. It operates more as the head of a banking cartel. It simply kites our tremendous debts way into the future. It uses inflation to draw down debts which is disastrous for the productive sectors. It is a boon for the non-productive sectors mostly the banks.
It is utterly hilarious that many people are arguing about the cost of GMA travels versus the benefits of foreign investments. All foreign investments in turn become long term obligations drawn against a national economy. What is worse is they very very rarely actually add to productive capacities.
Quite a hasty generalization out there.
It is true that “Foreign firms tend to have higher levels of productivity and wages, yet do not transfer productivity and knowledge to local firms. Simply attracting foreign investment is not enough to generate sustainable development. FDI policy must be conducted jointly with domestic policies that develop the capabilities of national firms and set benchmarks for environmental protection. International investment treaties must leave host countries the policy space to pursue those domestic policies necessary to foster sustainable development through FDI.” (Kevin Gallagher, assistant professor at Boston University and research associate at Tufts University’s Global Development and Environment Institute)
“Eva Paus, professor of economics and director of the McCulloch Center for Global Initiatives at Mount Holyoke College, discussed the case of Costa Rica. Foreign investment in Costa Rica differs from that in Argentina and Brazil. The majority flows to manufacturing rather than services; contributes to productive capacity rather than mergers and acquisitions; and concentrates in the automotive, eco-tourism, and real estate markets. Private real estate accounts for 25% of total FDI. Paus argued that Costa Rica’s strategic location as an export market to the United States, historical investment in infrastructure and human capital, and proactive government policy have positioned the country to attract foreign direct investment. Yet the country has not enjoyed the promised productivity and knowledge spillovers. Paus faults, in part, Costa Rica’s low tax rate and lack of a coherent development strategy for the country’s insufficient national capabilities to take advantage of foreign investment.
Nicola Borregaard, former? Director of the National Energy Efficiency Program of the Chilean government and advisor to the Chilean Minister of Economy, discussed the role of FDI in Chile. Chile is an important case study; the country is often cited as the Latin American country most successful in achieving sustainable development, and foreign investment has played a crucial role in that success. FDI accounts for 55 percent of Chile’s GDP, significantly more than the global average of 25 percent. In recent years, FDI has shifted away from the exploitation of natural resources—except for the case of mining—and toward the service sector and industries that process natural resources. The use of domestic financial resources has increased, investment flows facilitating mergers and acquisitions are bidirectional, and 95 percent of FDI consists of reinvested profits. Borregaard highlighted several factors critical in shaping this success, including the existence of social capital, enforcement procedures and capabilities, mechanisms of information disclosure and specific policies and institutions regarding the exploitation of natural resources.”
(Round table on “Foreign Investment and Sustainable Development: Lessons from the Americas”, Carnegie Endowment)
***
The first premise of bringing FDI is to generate jobs which the local economy is unable to provide.
The second premise that FDIs will transfer knowledge and technology is a bit naive and far-fetched because knowledge and technology are competitive advantages that every company will secure for itself. Which means, each country needs to put more thinking on how it can benefit from foreign investment in terms of technology transfer.
The Philippines has the responsibility to position itself to exploit that policy space by developing its own infrastructure and human capital – NOT THE FOREIGN INVESTOR. However, the Philippines policy space is so skewed that there are only few foreign firms to begin with in the first place.
For BongV.
In a nutshell, capitalism is free trade while mercantilism is managed trade. All the stuff people howl on the evils of capitalism are true. Unfortunately, what they are howling against is not capitalism, but mercantilism.
People should be free to buy and sell anything domestically and overseas without having to go through registration, declaration, receipts, and all those taxes and red tape that drive prices up. If something has to be mandatory and backed by the threat of force then it probably doesn’t have anything good of itself which people can voluntarily choose.
Despite the government saying such stuff is aimed at the rich, the burdens always falls on the middle class. And I am heartily sick of it.
The Philippines does not need Separation of Church and State. We need Separation of State and People.
For J_AG:
Have you read:
Rothbard, M. N. (1980). What Has Government Done to Our Money
von Mises, L. H. (1963). Human Action A Treatise on Economics (4th Ed.)
Schoolland, K. (2005). Adventures of Jonathan Gullible- A Free Market Odyssey, The
Oh my goodness an Austrian idealist. At least we have someone who has a belief…. Unlike BongV, bO who both had me not only at stupid but stoopid!!!!!
Why don’t we all remove barriers to capital mobility, merchandise trade and labor mobility… Let us say immediately… Remove all laws pertaining to patents and copyrights. Let us bring back free banking… Remove all licensing for professionals.. Let the market rule and bring back free banking without those pesky government guarantees. Abolish the PDIC…. Abolish the political standard of currencies and replace it with a commodity based or asset based standard. Forget about even setting standards as that would require a state. Yup abolish the states and state boundaries…
Let us go back to the 18th and 19th century and let the process of equilibrium rule absolutely… Why the need for social security and unemployment insurance. All this macro-economic mumbo jumbo should be thrashed.
We can start here in the Philippines by the gated communities declaring their separation from any form of statecraft. Abolish village associations and let each household look out for itself. Abolish licensing of firearms… Let each household look after their own home together with their own neighbors.
One question no one has yet answered is this… Why are capitalists bad for capitalism?
Man this Austrian got me at insanity…
Capitalism is a social format my dear Austrian friend… It is not an economic policy. The mechanization and automation of the labor process that increased productivity brought about by the steam engine and subsequent technological advances ushered in the societal format that is known as capitalism.
It provided the means to move people from the farms and created the means to build up the urban areas. The sequence of advances continues till today where in the past it was the physical labor process of humans that was mechanized and automated till today where the thought or brain functions are being mechanized and automated.
Today the manufacturing processes are going even deeper into the molecular and atomic stage of production.
The new genesis so to speak… All this aided and abetted by state intervention in the capitalist system of production. The state took us to the moon…
J-ag:
Not a biggie, the feeling is mutual – you had me at histrionics :)
***
Joseph E. Stiglitz, explains
” Adam Smith, the father of modern economics, is often cited as arguing for the “invisible hand” and free markets: firms, in the pursuit of profits, are led, as if by an invisible hand, to do what is best for the world. But unlike his followers, Adam Smith was aware of some of the limitations of free markets, and research since then has further clarified why free markets, by themselves, often do not lead to what is best. As I put it in my new book, Making Globalization Work, the reason that the invisible hand often seems invisible is that it is often not there.
Whenever there are “externalities”—where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated—markets will not work well. Some of the important instances have been long understood—environmental externalities. Markets, by themselves, will produce too much pollution. Markets, by themselves, will also produce too little basic research. (Remember, the government was responsible for financing most of the important scientific breakthroughs, including the internet and the first telegraph line, and most of the advances in bio-tech.)
But recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets—that is always.
Government plays an important role in banking and securities regulation, and a host of other areas: some regulation is required to make markets work. Government is needed, almost all would agree, at a minimum to enforce contracts and property rights.
The real debate today is about finding the right balance between the market and government (and the third “sector”—non-governmental non-profit organizations.) Both are needed. They can each complement each other. This balance will differ from time to time and place to place.
It is always better to have no ideas than false ones; to believe nothing, than to believe what is wrong.
Thomas Jefferson
Before we go all over the place, let’s take look at the problems we have.
People currently complain that “prices are going up” and things are getting expensive. Naturally, since you can see prices going up, people think that’s where the problem lies. So generally, the government likes to present sellers as the mastermind behind the evils. And their solutions are price freezes, more regulations, etc.
What most people don’t understand that it isn’t the prices that are at fault. It’s that the money in your pocket is losing its purchasing power over time. This is caused by the BSP printing more money. The result is that people are not inclined to save money. And why should you? If you can buy something today with the money you have, rather than the same item tomorrow for more money, naturally you’d best buy it today.
I like to use the analogy of iced tea in this case. To have a good glass of iced tea, (not the instant junk), you generally need to boil tea, slice lemons, make ice, add sugar, etc. All this requires time and effort.
So what happens when you need more than one glass? Let’s say at a party. There are two ways to do this.
The first is to do as before. More time consumed, more effort needed. And in the end, you have a nice tall pitcher of iced tea and everyone has a glass.
The second way is to simply take that first glass of iced tea and pour in enough water to fill the pitcher. Sure, both methods produce the same number of glasses of iced tea, but the second method produces an extremely weak taste which the guests will not enjoy.
This ‘taste’ is the purchasing power of money. If the supply of money is limited, then it is worth more. And because there is no way for sellers to demand more money (since it doesn’t exist), prices go down. The existing money you have becomes worth more over time. People have the incentive to save and become wealthy over time. The same amount of money you have today can buy more goods tomorrow.
And that is a good thing. Buyers don’t lose, and sellers don’t lose.
As to your post as to why we don’t do all things you mentioned? And the answer is that it would put politicians out of a job.
Filipinos have, over time, gotten too used to the idea that responsibility for things, belongs to the government. And the idea that we can sit back while everything is taken care for us by someone else is a siren call. Why doesn’t want an easy life?
But when your house is robbed, who is responsible for your safety during the event up to the time the police arrive? If you are on a desert island with no government, who is responsible for your safety? Who is responsible for your safety if the criminals are the police themselves? The answer to all these questions is yourself. You are responsible for your own life. Whether to God as author of life or to yourself as personal belief, and to deny this is to imply that another person has a higher claim on your life than you do. No other person or group of persons, owns your life. Nor do you own the life of others.
On your other points:
Removing barriers to capital mobility, merchandise trade and labor mobility.
Definitely a good idea. Wouldn’t you like to go into a bank and buy foreign currencies without having to a fill a BSP form declaring why you need the money? BSP says, no plane ticket, no foreign currency. That’s crazy.
Let us say immediately.
Not a good idea. People here are too used to the existing system. We need a period of transition and a way for people to individually opt out.
Remove all laws pertaining to patents and copyrights.
Good idea. The current system of patents and copyrights actually restricts innovation and production. Sure, you get X amount of money, but you lose rights of ownership over your own idea to the patent holder. Remember what happened to Belinda Carlisle? Her songs, but because of copyright, it was her recording label who was handling the distribution. And when she got into an argument with her boss, they just stopped promoting her songs and Belinda could do nothing. Not even sing for herself without risk of getting sued.
Have you heard of Creative Commons licensing? It’s a very good alternative. People do earn from it and don’t give up their rights of ownership. http://creativecommons.org/international/ph/
Let us bring back free banking… Abolish the PDIC….
Definitely. Bailouts for failed businesses have originated in the idea that no matter how stupid you run your business, the government will give you cold hard cash taken from nation. Banking is just another business. Why should they be treated with special rules? Why not government bailout insurance for barbers or fish ball vendors?
A bank should be stable on its own merits and treat its clients money not as unsecured loans, but the property of people. People shouldn’t automatically believe that everything is hunky-dory about a bank. Remember what I said about personal responsibility?
I want the PDIC gone, because it is mandatory and the payoff comes from robbing hardworking citizens. However, I wouldn’t mind a bank getting private insurance. This way if someone screws up, the fallout is limited to the subscribers, not the nation as a whole.
Remove all licensing for professionals..
Remove all GOVERNMENT licensing for professionals. Let’s face it, when you hire a doctor or lawyer and they screw up, can you sue the government for licensing them, in effect, guaranteeing their actions to the public? No! On the other hand, private associations willing to offer licensing and guarantees and perhaps insurance over their member’s actions are better. It weeds out the worst. And if something goes wrong, then yes, you can take them to the cleaners.
Abolish the political standard of currencies and replace it with a commodity based or asset based standard.
Before the government declared a monopoly on monetary issue, banks like BPI and PNB were allowed to print their own money. Today, Hongkong and the UK have the same system and look how wealthy they are. Apart from agreeing what legally defines the money, let people issue it. Feel free to accept or reject it. The best ones will survice and the unstable ones will disappear.
Forget about even setting standards as that would require a state.
If this is about weights and measures and industrial tolerances, see my response on private associations. Standards would still and continue to exist, but now you actually have alternatives. Nothing is mandatory. If you want people to accept your standards, you will do your best to show them that it is better than your competitor. And knowing how Filipinos like to jump on band wagons like the shawarma craze, it will spread widely. Only difference is that you won’t get fined in court for doing things your way.
Yup abolish the states and state boundaries…
I have no idea how you came to this conclusion. If you believe in property rights, then boundaries exist to determine where the property of one person lies from another. Remember the saying: Good fences make good neighbors?
Why the need for social security and unemployment insurance.
We do need it, but I dispute that we need the government to deliver it. Apart from private insurance companies offering it just like they already offer HMO care, private insurance arranged by unions, associations and what are an ancient concept and work well as long as they are not undermined by competition from the state.
Abolish village associations and let each household look out for itself.
Don’t forget that bayanihan is a uniquely Filipino trait. It should be allowed to flourish. By doing otherwise, people think its not my responsibility to care for my fellow man. I paid my taxes, that job goes to government!
Freedom of association just means that associations are not mandatory. But neither do they say that you have to do everything alone. Many neighbors living together on the same street have informal neighborhood associations. Sure, they may not be state approved, but they still exist and do things like keep an eye out on your house when you are gone or help you clean up the street when the garbage man doesn’t show up. All things which would cost unduly if performed by the state. When the last storm hit and a tree in my neighborhood fell and blocked the road, who did the clearing? My neighbors and I. We certainly didn’t moan and pray for some guy from the mayor’s office to
Abolish licensing of firearms… Let each household look after their own home together with their own neighbors.
Again, look what I said on freedom of association. Just as you have the right to protect your own life, liberty, and justly acquired property from the forceful aggression of others, you are free to ask others to help defend you. Besides, nothing says you or your group can’t hire others to make things easier. People wouldn’t waste their money on security guards if some of them didn’t do something right.
Now, on firearm licensing. Laws are for the lawful. Do you really believe that criminals wait in line at Crame to get licensing for firearms? Of course not. However, the government, is currently so fearful that ordinary law abiding citizens will turn to crime, probably from the invisible evil-radiation emitted by guns, that they would rather people be helpless than make things easier for them to do things on their own.
One question no one has yet answered is this… Why are capitalists bad for capitalism?
Probably because this is an odd question. It’s like you are assuming ‘capitalists’ are some cabal or secret society to be feared. A capitalist is anyone who, rather than spending the money he saves, decides to put that money to use and earn. Whether he does things on his own or works with others or hires others, or works at home, or in Makati, he’s just somebody like you. Another more acceptable word for capitalist is entrepreneur. I don’t see too many people screaming entrepreneurs are evil! :)
I’d like to hear more from you. Nice to hear someone who actually does his research. Feel free to email me at admin @ newcommonwealth.org
My favourite Thomas Jefferson Quotes:
“The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.”
“God forbid we should ever be twenty years without such a rebellion. The people can not be all, and always, well informed. The part which is wrong will be discontented in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions it is a lethargy, the forerunner of death to the public liberty.”
“Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question.”
“And what country can preserve it’s liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is it’s natural manure.”
“I consider the people who constitute a society or nation as the source of all authority in that nation; as free to transact their common concerns by any agents they think proper; to change these agents individually, or the organization of them in form or function whenever they please; that all the acts done by these agents under the authority of the nation are the acts of the nation, are obligatory on them and enure to their use, and can in no wise be annulled of affected by any change in the form of the government or of the persons administering it.”
“Laws that forbid the carrying of arms disarm only those who are neither inclined nor determined to commit crimes. Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than prevent homicides, for an unarmed man may be attacked with greater confidence than an armed one.”
“The spirit of resistance to government is so valuable on certain occasions, that I wish it to be always kept alive. It will often be exercised when wrong, but better so than not to be exercised at all. I like a little rebellion now and then. It is like a storm in the atmosphere.”
“Most codes extend their definitions of treason to acts not really against one’s country. They do not distinguish between acts against the government, and acts against the oppressions of the government. The latter are virtues, yet have furnished more victims to the executioner than the former, because real treasons are rare; oppressions frequent. The unsuccessful strugglers against tyranny have been the chief martyrs of treason laws in all countries.”
“When the government fears the people, there is liberty. When the people fear the government, there is tyranny.”
Francis Bonganay,
Jefferson knew how to cut to the core, eh? Although I find unnerving how easily he would take up arms, I do like the following two quotes, as they pertain very clearly to the Philippines.
“Most codes extend their definitions of treason to acts not really against one’s country. They do not distinguish between acts against the government, and acts against the oppressions of the government. The latter are virtues, yet have furnished more victims to the executioner than the former, because real treasons are rare; oppressions frequent. The unsuccessful strugglers against tyranny have been the chief martyrs of treason laws in all countries.”
“When the government fears the people, there is liberty. When the people fear the government, there is tyranny.”
Case in point. The Philippine government considers the press to be an “enemy of the state” and therefore seeks to suppress it by Right of Reply harassment and (apparently) sanctioned murders of journalists. List the 68 journalists killed under Ms. Arroyo’s regime, 3 solved, and you have a good picture of a government that is not yet afraid of the people, and a good list of martyrs.
But consider the explosiveness of a few recent government boondoggles – the book tax, the President’s hospital visit, and the dinner in NY – and you see a people beginning to attack the government through intellectual outrage. Perhaps the tide is turning, as the internet marshals dissent and a call for transparency in a way that the police cannot attack and the government cannot undermine, and ACCOUNTABILITY is forced to the forefront. So liberty may be at hand, eh?
The babblings of the official Arroyo spokespeople are deceit in action, being found out. The “bill” for the 30-party trip to the US, seven days, paid by the people, was announced on day one at P 19 million. When that number was found to be patently wrong considering the cost of travel, it was revised the next day to P 37 million. No one knows what the real figure is, and one feels they are just pulling numbers out of a bucket. So much for building trust.
Future government leaders might be wise to take heed: try a little honesty and stop yanking the people around.
The internet is Big Brother in reverse. Putting the government before the cameras and microphones.
Joe
EXACTLY!
Now that the good at stupid is through pointing to to other peoples quotes can he suggest which government should regulate international markets?
G-1, G-2, G-7 + 1, G- 20 or G-180 +.
Who will regulate the international financial markets?
Who will regulate the international merchandise markets?
Who will regulate the international labor markets?
Now this, who will regulate the behavior of nation states?
The U.S. refuses to become a member of the International Criminal Court because it infringes on their own Constitution.
In some parts of Europe while they do have a common market and some parts of Europe have a common currency they still have independent separate fiscal policies when it comes to internal taxation..
The head of the Presidents Council of economic Advisers said in a speech recently that the U.S. must become like China and China must become like the U.S. with regards to international trade. Summers said that the U.S. might have to export its way back to health while China must import its way to economic development..
The U.S. dollar will most definitely be devalued further. In case anyone hasn’t noticed since 2002 the U.S./Euro rate has almost doubled. From $.80 to E 1 to $1.40 to E 1. By next year it could touch $1.60….
Now which country on the planet is the most protectionist? In 1972 then Treasury Secretary John Connelly told the Europeans, the dollar is our currency but it is your problem…
This time around, Obama himself told the Chinese that the U.S. will no longer be the buyer of first resort…
China, India, Brazil and Russia are calling for a new international monetary standard.
Meanwhile the U.S. is flooding the world with more dollars and more supply means lower interest rates. Debt is not money but it does work like money and does duty as such. Use it at your own peril… Most especially when the people who will pay for it or are not old enough or have not yet been born…
Remain at good at stupid…
J_ag,
At the risk of being labeled stupid or insane, and knowing your questions were not addressed to me, I shall opine on them, as I find them interesting.
International markets will continue to be regulated by “voluntary negotiation” or war until such time that the United Nations becomes a legitimate world representative organization, rather than an organization held political hostage, alternately, by the assembly of rabble-rousers or the council of authoritarians.
The US, under Obama, has recently announced its desire to become a member of the International Criminal Court. I don’t know how it gets there. As the world’s designated super-cop, the US does not want its “enforcers” subject to the political whims of recalcitrant nations. Witness the over-the-top lynch mob attitude of the Philippines regarding Nicole, and the aforesaid rabble-rousing recriminations raised relentlessly by the assembly of nations.
Interesting that as the dollar devalues against European currencies, it increases in value against the Philippine Peso. Now THAT ought to be of immediate, specific concern for Filipinos. Also, the US is different under Obama, in case you, like Blackshama and Bencard, have not noticed. I think you might factor a bit of “rational” US behavior into the picture. I fully expect that the debt will get paid down responsibly, if Obama expects a second term in office.
Joe
J_ag,
Thanks for the summation, which I need to study a bit.
Entitlements are, indeed, the ticking time bombs.
Joe
Joe the use of the term stupid as for those good at stupid since the do not understand what they know.
Self regulating markets and regulated markets are not the same as capitalism and mercantilism.
Markets are social mechanisms within a societal format. They cannot be the format.
In the physical markets for goods price equilibrium is easy to achieve as supply and demand are limited by physical supply. Price signals the information for both supply and demand to react.
However in the financial markets it is a different universe. (Hence the cry for a return to the gold standard.) Markets tend to overshoot during periods of irrational exhuberance and can turn on a dime and dive and cause a collapse. Inflation and deflation are the curse of monetary authorities. Inflation is easy to cure. Deflation is dangerous.
The U.S. imposed the political dollar standard in 1970′s thus making the dollar the de facto international currency. But it is backed up by nothing physical… In essence the U.S. buys things for free from the world. It can buy goods and services on credit as an economy without having to sell anything to cover that trade deficit. Just think Joe for yourself when I give you a credit card that you can borrow on without paying the principal for life at an interest rate of 1 % a year. And you collect the interest from your kids.
As to the Philippine exchange rate expect that rate to get stronger soon … Peso/dollar rates are influenced by trade of the Philippines with other countries. No one and the government does not want to use the peso in international trade. No demand for it. So we have to pay our foreign bills in hard currency and not in our own currency. Plus we are forever running trade deficits and fiance this with foreign loans, investments and money from pinoys working abroad. We kite our debts with foreign savings. We are in a debt trap.
Now as to the U.S. debt. U.S. budget deficits are programmed to be over $1 trillion+ for the next few years. Accruals on entitlements in the U.S. budget are programmed to move into even more as a share of the budget which will threaten spending for defense and education.
The U.S. at the present time can borrow cheap from its citizens and the world since there is a deep recession and private investments are low. The U.S. government through the Fed has guaranteed almost $10+ trillion financial assets..
U.S. savings rate are going up since people are afraid to spend .. The U.S. is still standing by the edge of deflationary pressures. Unemployment is still rising. More homes are still going into foreclosure. While the rot in financial markets have been plugged the resulting effect on the physical economy continues to deteriorate.
I do not think that Obama right now and in the next three years will be worried about reelection. For him to be successful he will have to become unpopular. No president likes having to tell people that they have to sacrifice. It is very Un-American.
America has been overspending for so long that they do not remember what it was to save for a rainy day. itr cannot grow its economy out of its debt hole solely.
I don’t believe in the gold standard as it is a government-managed economy. Government sets the exchange rates under the gold standard and I cannot accept that.
However I do believe in gold, and silver, and copper, and coffee and steel, and cement. Let they buyer and seller determine how much one item is valued equal to another item. All trade originates in barter. Gold and silver (and it doesn’t just have to be these) just make things easier to account for.
What is wonderful about this, is that these commodities are valuable on their own, and not tied to the stability of any existing government. I want my money to still buy things even if the government falls or the banks all become bankrupt.
This is why governments hate it, call it primitive, etc. Because they can’t turn on the printing press to produce gold whenever some politician has a buddy in trouble or needs handouts for votes. Gold makes it harder to start wars since wars cost so much.
Don’t pay attention to the peso to dollar rate. See how the peso stands against commodities and you will see the true value of it.
Now you got me at confused….
It is tough to have a discussion with a table…
Obviously you have not heard of Keynes or Hayek… Keynes penned his famous or infamous work (depending on which side of the fence you are in) The General Theory of Employment, Interest and Money. Hayek represents the Austrian school of monetary thought.
Milton Friedman was a rabid Austrian with his own twist. He actually believed in the free market determining everything. Remove all bars to the demand side. Prostitution, drugs, government licensing of professions or anything else etc… But he was also very smart. That is why he convinced the commodity markets to include fiat currencies in the mercantile exchanges of the world.
He felt that that would be the ultimate check and balance on government misbehavior.
The reason for my confusion about your recent post Mr. Bonganay is you are talking like a one armed economist (business economics) which actually does not exist.
Supply and demand like cause and effect is sometimes hard to fathom.. Which should be dominant.
The answer off course is in Keynes work… The human standard… The CPI which is supposed to be calculated by the labor department. Non renewable resources are prized for their scarcity…
The curse of capitalism (all types) is the economic system of industrialization will produce overcapacity or overproduction. The ancillary effect also will produce surplus capital… Productivity will destroy the need for labor as mechanization replaces labor. That creates a problem of lag time for the creative destruction to take root. In the interim period of high unemployment during period of downturns there will be social instability… Banking technology has always been based on a fractional reserve system. Hence financial crisis will always precede a serious economic downturn. Surplus capital moves into speculative activity when there is a glut of productive capacities. Hence at the turn of the last century the call for globalization to open all markets for surplus capacity to protect price margins for the producer.
However the reality is that trade based on comparative advantage is based on comparable economies trading with each other. They have to be at the level of full employment. Hence you will get imbalances.
Populist governments will tend to satisfy short term need for the long haul and you get recurring balance of payments and the only recourse for weak governments is to get on the debt treadmill and eventually inflate the debt away. Since they are weak in tax collections they use inflation to do the heavy lifting.
As JMK said it succinctly. In the long haul we will all be dead anyway. In other words the future is not our problem… It is our children’s problem… Just calculate the cost of sending kids to the good schools based on price inflation per semester.
One important point though in the context of the Philippines. We are a third world country that likes to pretend to be a first world country. Debates on monetary policy based on the fight between Keynes and Hayek are ok for the first world. They are almost totally useless for a third world economy like us.
In the past the yen was based on the rice standard.
In the present period we are in right now the warning price signals of the end of easy access to fossil fuels are flashing red.
Right now oil is no longer priced in dollars but dollars are priced in oil… The price of oil is the present benchmark for modern life.
Not sure how you came to that conclusion. I actually have a very nice collection of F.A. Hayek’s works, which include his famous “Road to Serfdom,” and his more obscure essays in “Prices and Production and Other Works: On Money, the Business Cycle, and the Gold Standard.”
If you are interested, you can purchase these works from Amazon.com or from the Ludwig von Mises Institue in Alabama. One of the things about the Ludwig von Mises Institue actually does not believe in copyrights and patents (Read up on Stephen Kinsella’s books.) and therefore offers their entire publication for FREE on the Internet. By doing so, they have actually increased the demand for their physical books and make a very tidy profit.
You may wish to download and read his bibliography here at: http://mises.org/articles.aspx?AuthorId=126
My friend, Nonoy Oplas, head of Minimal Government Thinkers, Inc. (http://www.minimalgovernment.net/), a Philippine think-tank is an avid reader of his more mainstream work.
As for Keynes, his General Theory has more or less been the carte blanche absolution for justifying the inflationary policies and power grabbing by world governments and was debunked in the 70’s when he couldn’t account for stagflation.
99.99% of the world’s economists are Keynsian including President Arroyo. I actually had a conversation with her and she told me that there is no such thing as a free-market. My reply to her was “True, but we have it in our power to either make the power more free or less free, so why not go in that direction?”
On Friedman, he is not considered part of the Austrian School of Economics at all. He was involved in what is now known as the Chicago School. There are a number of point differences between both schools of thought. You might wish to take the “Are You an Austrian?” quiz to see the differences. http://mises.org/quiz.aspx
As for being “a one armed economist,” I have no idea what you mean. Could you explain further?
Supply and demand aren’t ‘hard to fathom,’ but you do need the tools. I suggest you read ‘The Mystery of Banking’ by Murray N. Rothbard. http://mises.org/story/3122 It’s a very easy read, so give me your reaction to it when you’re done.
Overcapacity or overproduction as you call it is what we call ‘malinvestment.’ It is an investment in wrong lines which leads to capital losses. Malinvestment results from the inability of investors to foresee correctly, at the time of investment, either (1) the future pattern of consumer demand, or (2) the future availability of more efficient means for satisfying a correctly foreseen consumer demand. Malinvestment is always the result of the inability of human beings to foresee future conditions correctly. However, such human errors and the resulting malinvestments are most frequently compounded by the illusions created by undetected inflation or credit expansion. From the viewpoint of attaining maximum potential consumer satisfaction, every political intervention, other than that needed for the preservation of the market society, must lead to malinvestment.
The idea that productivity will destroy the need for labor has been the boogeyman of the left ever since the start of the Industrial Revolution. It is an unfounded fear, this idea of lost jobs. People are resilient. Even in Japan where almost all manufacturing is highly automated there is still a place for human labour. Mechanization actually is a good thing. It frees people from the drudgery of dangerous jobs and allows people a precious commodity: TIME. Time to do whatever you want. More jobs? Relaxation? It’s all up to you.
Now, banking has not always been based on fractional reserves. Before some clever banker found out he could issue out more banknotes than he had real money to back them, there was fully convertible 100% reserve banking.
Keynes was a bit of a dick when he said “In the long haul we will all be dead anyway. ” As a Catholic, I know that through my children I achieve a certain earthly immortality. So, if this is the case, then we are responsible to see to the betterment of future generation, and not just rob them of their wealth and birthright since there is no way they can haul us off to court after we croak.
You do have to understand that these ‘best schools’ do offer something and not just take their client’s money and give them the same thing curriculum cheaper schools do, right?
I’ve calculated the costing of Xavier and Ateneo and apart from the prestige costs, I find it stupid that the government is jacking up tuition prices by taxing education and destroying the purchasing power of money. It’s not really enough to declare no taxation for school books. Every aspect of the education industry must be declared tax free. Even to the point that if you sold a bucket of paint to a school, it would be tax free. This would allow poorer schools access to better resources for their clients.
But even if this doesn’t happen, there are alternatives which you can avail of right now. Did you know for a TENTH THE COST OF ATENEO, you can give your children an accredited overseas education, US, UK, whatever, and still academically beat the living shit out of our so-called science schools? Seriously. About $250 for all full year’s tuition to Kindergarten including books. No more additional costs. About $520 for first year high school. Again no additional payments the whole year. And your kids graduate with an internationally accepted diploma.
Your idea that monetary policy are only concerns for the first world are not new. A century ago, the German Historical School put forth the claim that economics was affected by the particulars of nation and situation and that no such universal economic law was evident. Carl Menger on the other hand, managed to successfully show that the laws of economics do not change according to country or situation or wealth or poverty or time and that these laws are universal just like the laws of physics and gravity.
They cannot be tampered with or set aside no matter how hard some people try. Read up on the Methodenstreit debates during the last century. It’s a very interesting read even for non-economists.
http://en.wikipedia.org/wiki/Methodenstreit
http://mises.org/HSOFASE/CH2SEC3.ASP
Why shouldn’t the Philippines go for Austrian Economics? We’ve done everything else it isn’t working. Keynesian economics where you spend when you have no money is crazy and driving us to ruin. When someone is dead broke, he doesn’t become rich when he buys a Ferrari with a credit card. My upcoming online newspaper will be focusing primarily on Austrian Economic solutions for the Philippines. I hope to see you guys there when we get it up and running.
As for oil? Don’t worry. Oil is not running out. I think that there are too many unanswered questions to Peak Oil and that the Russian-Ukrainian theory manages to account for a large number of oil fields which do not fit the Peak Oil requirements for geological prospecting. The West and the Big Oil companies considered it bunk for years, merely a result of anti-Western bias by the former Soviet Union, but now they seem to be giving it a second and third look the way Gazprom seemingly is pulling oil out nowhere.
http://www.lewrockwell.com/orig5/crispin8.html
http://www.lewrockwell.com/crispin/crispin11.html
http://www.lewrockwell.com/crispin/crispin18.html
As for US dollars? I wouldn’t use them for toilet paper. The whole peso-dollar exchange rate is an illusion. It’s like two rocks both falling to earth from high up. If you’re standing on either rock, it just looks like one is higher than the other. Better to get out now and protect your family while you can. I sold all my dollars years before the crisis hit because I saw no way America’s spending trends could continue business as usual. Austrian economics had been warming about today’s current meltdown since the early 90’s so we do have the street cred.
I have gold, silver, euros, renminbi, yen, and SG$. Mostly silver since it is easily available. Return is something like 400% over the last five years?
For those interested and living in or near San Juan, Metro. Manila, I arrange silver sales where people can buy and silver bullion. If you are interested, email me at admin @ newcommonwealth.com
Totally agree.
The issue isn’t between markets and the economic systems/policies/directions used by the market. The issue is – the mercantilist and protectionist policies in play within the Philippine market.
I can build a scarecrow at the rate am reading these strawman replies :)
***
Easy solution to end the protectionist policies. Evade taxes, smuggle all sorts of things, and don’t declare anything to the government.
In short, a tax revolt. Particularly now at election time! :)
very interesting discussion. lots of ideas to learn.
anyway, can’t resist offering my own favorite quote:
Love is like a bird; but only God can make a tree. – Joey de Leon
Debt is the handmaiden of capitalism… Without her the capitalist system will collapse.
U.S. government projections going out ten years is $10 trillion in deficits..
http://www.cnbc.com/id/32511907
The U.S. government is already confiscating surplus value still to be created. Deficits are future taxes…
If governments would have followed Hayeks advice then the world would be in a serious depression as the cleansing process would have created a massive army of unemployed all over the world. Demand would have been massively crushed in such a short time…
Maybe that would have been more interesting. Imagine a massive labor migration in reverse into the Philippines where millions (assuming 20-30% retrenchment) of Pinoys would be shipped home in one fell swoop. The cascading multiplier effect in a reverse downturn…
Debt is the handmaiden of Keynsianism, not capitalism. As I mentioned earlier, when someone is dead broke, he doesn’t become rich when he buys a Ferrari with a credit card. Keynes said debts don’t matter.
I prefer Cory Aquino’s original economic policy: “My economic policy is that of a housewife. Don’t spend more than what you earn. If you don’t have enough, do without until you can save for it.”
Too bad she let the ‘experts’ hoodwink her into letting them run the show.
Germany after WWII and Poland after the end of Communism along with Chile during the 70′s show that the cleansing process needs to be done as quickly as possible. When a building is crooked, you don’t adjust. You rip it out at the foundations and start over with a level. How long did the chaos last (and not saying that it won’t happen if we do so) in those countries? About half a year to a year.
People are smart enough to know what is best for them. Rather than seeing the problem as a gigantic thing which needs the mobilization of the entire nation under a single directive, all you need to do is cut it down into bite-sized pieces which are then easily manageable by everyone the way they see fit. All that needs then, is to mind your own business. And when everyone does so, the problems evaporates.
Even normal business firms rely on bank loans for financing. If you want to buy a house, normally you take on a housing loans. If everyone had to operate on a cash basis, the economy would be much smaller than it is. We can argue on what it excessive debt and the manner in which such debt is used for but debt itself is a feature of the capitalist system.
Expansion of the money supply artificially reduces interest rates. This causes a boom in consumer and investor spending. With businesses thinking longer term, and consumers thinking shorter term, a discoordination emerges in the economy. The time relationship between saving and investment, production and consumption, is disrupted. Market processes reveal that many investments are not really profitable but instead are clusters of errors. Businesses then liquidate these investments, causing a recession.
Francis:
Boom and bust cycles are inherent in the capitalist economy.
The “discoordination” is a misfortune for certain companies and a boon for other companies. In the process some companies will fold, and some will be bought out (as in the case of Lehman and Bank of America, Wachovia and Wells Fargo. There will be mergers and there will also be new players arising out of the hubris.
The boom and bust cycle has often been pointed out as one of the disadvantages of the capitalist system. Some schools of thought think this boom and bust cycles will grow larger, wider, and will hit harder leading to capitalism’s demise – and a transition to another system of distribution of wealth. However, one thing about capitalism is its ability to reinvent itself after every boom-bust cycle.
Still, one can’t help but think that Karl and Freidrich were on to something – given the mix of public intervention/regulation/ and participation in the markets. Perhaps, socialism will come not by use of armed force, but due to force of circumstances – that the current system is no longer up to the task of bringing prosperity to the largest number of people (in contrast to bringing misery to the widest swath of the population). For all we know, the Soviets missed the point – but United Auto Workers maybe a nascent expression of corporations run increasingly by workers, owned by workers, managed by workers – while engaged in a market-driven economy.
Francis B,
“Expansion of the money supply . . .”
Wonderfully succinct and profound paragraph.
Joe
In the early 80′s, the Fed under Volcker tried to target the money supply instead of interest rates. The result is that interest rates fluctuated wildly. They had to abandon the experiment.
cvj,
Do you know the Fed no longer publishes the M3 numbers because ordinary people were starting to ask uncomfortable questions like why the toilet paper factory was placing so much money into circulation?
Its generally hard to control the money supply when its your business mandate to print as much money as the politicians want to pacify the special interests.
Same with the BSP, people scream for the government to ‘do something’ and politicians, wanting to keep their jobs, run up the deficit to ‘give jobs’ or ‘push down prices,’ etc. Naturally, this produces more imbalance in the economy and the screaming gets louder.
The best thing for the country is for the government to just let go and allow for a controlled crash to occur now and perhaps spend a year or two at most in hell so that the economy can go back on track.
All the interventions that the government is doing, protecting this industry or keeping prices of a certain good low or limiting imports of something… its not going to end well. It’s morphine for a gangrenous arm. Sure you don’t feel pain, but that arm is going to fall off and the patient will go septic.
We are walking into a DEPRESSION which may last twenty years.
Where we disagree is what you define as the solution is what i consider the problem. Allowing a ‘controlled crash’ is not my idea of a solution. I still remember the last time our economy was allowed to tank (under the guidance of the IMF) in 1983 to 1985. We’re still recovering from that episode.
To BongV,
That’s kind of the point I’ve been trying to make. The boom and bust cycle ISN’T inherent to capitalism and ISN’T this mysterious thing nobody can expect or predict. Well, they’re half-right. You can’t expect or predict it under Keynesian economics. The Austrian School, on the other hand, has done so and has continuously proven to be correct.
The boom and bust cycle occurs as a direct result of the fractional reserve banking system and the devaluation and debasement of money.
People want the good times to last forever so they try to stretch the economy like a rubber band for as long as possible. Sooner or later you can let it snap back or watch it break.
Seriously. Look at history of money and banking. Every time you see the boom and bust cycle, even before the rise of capitalism (which implies that it ISN’T capitalism at fault), you will see that it occurs whenever the government devalues the money because they want to live beyond their means.
Lots of wants, not enough money. Solution? The iced tea bit. Release new money worth less than old money, but try to fool people by using the same denomination.
Let’s look at this in terms of X deals. (I read this example in another Filipino forum some years back, and it struck me as inherently reasonable.)
The US-Philippine Peso is established in 1903 to be 0.026875 troy ounces of gold, exactly half the value of gold dollar. http://www.archive.org/details/currencyinphili00conagoog
In 1909, the price of a new Ford Model T was $850 or P1,700.00 (45.6875 troy ounces of gold). About sixteen months wages for a factory worker. http://en.wikipedia.org/wiki/Ford_Model_T
The cost of gold today at P45,975.72 an ounce. http://www.xe.com/ucc/convert.cgi?Amount=1+&From=XAU&To=PHP&image.x=33&image.y=11
The implications are as follows.
If your grandfather trusted the government and banks and saved his salary in an ordinary savings account in 1909, P1,700.00 with a 1% pa interest, today, you would have P3,400.00. Good enough for a meal with the family.
On the other hand, if your grandfather mistrusted the government and banks and X-dealed his salary for gold in 1909 and buried it in the backyard, today, you would have P2,098,754.02 to play with.
Imagine! If you ignore the peso prices, you and your lolo could walk into any Toyota dealer with his savings for a year and a quarter wages back then, and walk off with one each of the following vehicles and still have change left over:
Camry 3.5Q 6A/T (White Pearl) P2,025,000.00 or 44.05 oz gold
Super Grandia 2.5 A/T Monotone (fabric) P1,720,000.00 or 37.41 oz gold
Fortuner 4×4 V 3.0 Dsl A/T P1,718,000.00 or 37.37 oz gold
Innova V 2.5 Dsl A/T P1,184,000.00 or 25.75 oz gold
Corolla Altis V 2.0 A/T (Pearl) P1,125,000.00 or 24.47 oz gold
Vios G 1.5 A/T (w/ Leather) P821,000.00 or 17.86 oz gold
Avanza 1.5 G 5-Speed M/T P803,000.00 or 17.46 oz gold
HILUX G 4 x 4 A/T 3.0 Dsl P1,451,000.00 or 31.56 oz gold
http://www.toyota.com.ph/cars/new_cars/index.asp
“Yes, ser! I want a new car! My lolo makes P131,172.12 a month!”
I don’t see any inflation, do you? It’s not the goods. It’s not the free-market. It’s the government playing around with the money and YOUR FAMILY’S SAVINGS.
cvj,
Of course the IMF venture didn’t work. It was like asking an arsonist to put out a smoking pile of leaves on the lawn.
What I enview as a “controlled crash” is a year long information campaign to tell people to prepare for the worst, remove as much debt they owe as possible, and save up for hard times.
Then you send liquidate the PDIC, burn all future T-bills, allow failing businesses to die (they had their chance to get their affairs in order like everyone else) and stop printing new money.
You get chaos for a year or two (which won’t even be anything remotely close to the crap like the First Quarter Storm in the 70′s) and then everyone can start off again on a new and better foot as the purchasing price of the existing pesos stabilize.
The only other option is to fear the small sacrifice now and reap the whirlwind later. And trust me, it will happen.
Reverse migration to a country without job opportunities. Yeah right.
BongV,
Could it be possible that you may have missed J_ag’s bigger picture?
If governments would have followed Hayeks advice then the world would be in a serious depression as the cleansing process would have created a massive army of unemployed all over the world. Demand would have been massively crushed in such a short time…
Maybe that would have been more interesting. Imagine a massive labor migration in reverse into the Philippines where millions (assuming 20-30% retrenchment) of Pinoys would be shipped home in one fell swoop. The cascading multiplier effect in a reverse downturn.
the “big picture” comes with a big “IF”.
Nick,
Thanks for making available this forum. This is blogging at its best. The debate between J_ag and Francis Bonganay is classic.
Joe