Populism ends in tears

 

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Category: Trinidad Politics 23 Sep 07

 

The Nobel Prize winner sitting on the UWI stage delivering a harsh truth in a tone that was unexpectedly tender: “You can see the future in the present,” was an unforgettable gift. VS Naipaul gave us a clear lens with which to see ourselves.

 

The signs are everywhere. We must be prepared for an uncontrollable inflation, a possible devaluation and a “bust up” between the people who depend on government for their daily bread and everyone else. It will be an ugly encounter.

 

I suppose that is the definition of a pessimist, but I prefer to call myself a realist.

 

Where do the signs point?

 

Firstly, not unlike the UK and the US, our housing market appears to be slowing down. Real estate agents are complaining that properties remain on the market for years (not months) and first-time buyers are finding it difficult unless they are lucky enough to get a government house. Rents have shot up.

 

In the UK and the US it is suggested that the slowing property market could be the precursor to a “recession.”

 

The UK, despite its continual wrestling with inflation is now reeling with the shock of the collapse of Northern Rock, one of the top five mortgage lenders in the UK.

 

Beyond reason

Simon Jenkins commenting in the UK’s Guardian blamed this shocking collapse on populist government policies that have interfered with the economics, “Home ownership in Britain—termed a ‘right’ by Gordon Brown—has been indulged beyond economic reason. It has sucked savings out of the productive sector. It has tied up pension money that should be helping the economy in the stock market.”

 

Just think, if a bank in the UK, with its strong currency and stable inflation, collapses due to one populist policy regarding housing; where does that leave us given that all our policies are populist?

 

We are living in a fog of the Government’s runaway construction, with lavish sums assigned to transport infrastructure (sadly the roads are bad as ever, the traffic clogged everywhere), port development and 26 government buildings.

 

Like shoemakers in the night, Chinese construction workers are erecting buildings like magic. Nobody knows how much this is going to cost us.

 

Due to the lack of information we can only conclude that most of these projects are being run by quangos—quasi autonomous government organisations.

 

The Government appears to have set up various companies of which it is the only shareholder. There was concern this was being done to facilitate corruption but the Government argued these organisations allow more efficient construction.

 

If this is so we can say these “organisations” have treated their only shareholder with contempt. We have seen no accounts, no numbers. What we will probably see is huge costs overruns, corruptions and wasted money. And more inflation.

 

Another sign is food price inflation. People are charging more because there is too much money chasing too few goods.

 

It’s partially international. World rice and wheat prices have gone up, but also because the Government has pandered to populist policies.

 

The cost of labour has shot up. Nobody wants to do manual labour on local farms to produce local food unless they get paid more than a Cepep worker, who just had a 15 per cent hike in wages.

 

Wages on farms can’t match that. The cost of land has shot up. If agriculture is not profitable, you sell. Concrete is devouring agricultural land.

 

The lights are flashing red. The signs are everywhere. Populism ends in tears. The future is here, in our present.

  

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All Articles Copyright Ira Mathur