The state of things

For some time now, the media had been debating the state of the American economy with growing fears that the US was already in recession. The news that Bear Stearns, the fifth largest US investment bank, had gone under and had been taken over by JP Morgan Chase in a deal that was brokered by the Federal Reserve sent shock waves in the US and around the world. All of this is taking place in an environment where the US dollar had reached one of its lowest points.{{more}} The indications are that unemployment would continue to rise and that things would get worse before they get better, despite the Federal Reserve’s astounding intervention into the country’s financial markets. We, in this part of the world, have to begin to take stock, for we are not too sure how this will play itself out on our home turf. Once unemployment begins to rise, it goes without saying that our people in the USA will begin to feel the negative effects. But it doesn’t stop there because inevitably remittances to relatives at home will begin to fall and tourist arrivals from the US will drop. So we have to be concerned about the state of things in the United States of America. Interestingly, I am only now beginning to see comments made about the effects of the Iraq war on the American economy. Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics, in a book he co-authored with Linda Bilmes, who I believe is a Harvard Professor, writes about the Three Trillion Dollar War, an amount he considers conservative. Stiglitz noted: “To put that number in context: For one-sixth of the cost of the war, the US could put its social security system on a sound footing for more than a half-century, without cutting benefits or raising contributions.” I am always amazed by the fact that American politicians are wary about dealing with the issue of health insurance and their equally cautious approach to social security citing often the enormous costs. But what could be more costly than continuing the Trillion Dollar American war which the present administration seems to have no qualms about doing.

The present talk of improvement in the situation in Iraq is to underestimate the costs not only in money but in other areas, with returning veterans suffering from post-traumatic stress disorder, the destruction of Iraq where unemployment is high and a lot of the skilled people have either been killed or have migrated. So to say that the surge is bringing benefits is to misspeak in a war that will certainly have no winners. All of this makes the American presidential race quite an interesting one, with the economy in a tail spin brought about by the disastrous policies of George Bush and with John McCain being another version of Bush and the two Democratic contenders engulfed in a battle where certainly Hilary Clinton is prepared to do whatever is necessary to secure what she, by some strange logic, considers rightly her own.. She said that it took a Clinton to remedy the ill policies of the first Bush and suggests that it would take another Clinton to deal with the mess that George W has created. A few hours ago, I listened to what I consider one of the truly great speeches, the one given by Barrack Obama on the racial issue. It was a wonderfully crafted speech. He hit the right tone and put things very much in perspective. I have certainly not carefully scrutinised it, but my immediate reaction after hearing it was to consider it one of the truly great speeches I have heard. It will certainly answer some of the recent criticisms made against him.

On the home front, the news continues to be depressing as we proceed along disastrous paths. We have become a sick society, where everyone is carving out a path for his/herself, be it good, bad or ugly. In fact the editorial of the News newspaper of March 13 was captioned “A Sick Mind.” Really, it is not about a sick mind but about a sick society. The editorial dealt with the issue of a bomb threat at the Milton Cato Memorial Hospital. The truth is that this society has been prepared to accommodate and tolerate so much nonsense that the depraved find it easy to fit in and to indulge in such ridiculous behaviour. Many of these depraved human beings are little worried about the police since there is now neither fear nor respect for the police. In fact there is little respect for anything or anyone. The very thought of phoning in a bomb threat at a hospital is one of the most callous things imaginable. What can really force someone to indulge in this dastardly behaviour is beyond me. Then this is followed up the next day with another bomb threat, this time at a bank on the last working day of the week when the banks were likely to be packed with people.

Two major issues facing St.Vincent and the Grenadines and the region generally are crime and the high cost of living. There is always the hope that some of these matters could best be addressed as a region, but CARICOM does not generate much confidence in its ability to move quickly on any issue. There had for some months now been much talk about tackling the high cost of living and a special meeting had been convened weeks ago in Guyana to deal with it. The matter was again taken up at the recent summit in the Bahamas. Many are yet to be convinced that adjusting the Common External Tariff is going to be the solution to the problem. In our case the issue of the imposition of VAT on basic items used widely by the poorer people in our society lends itself as a matter that has to be addressed and addressed quickly. The continued rise in the prices of oil and wheat will not allow some of our problems to go away. Maybe the solution is a long term one as suggested by the President of Guyana but there is need for some relief in the short run.

Recently there was news about what appears to be an invitation by our Prime Minister to encourage Trinidadian investment or control of our Flour Industry. This makes little sense to me unless the idea is to have the Trinidadians shut down ECGC. SVG will never be in a position because of high energy costs to compete with flour from Trinidad and, therefore, I am not sure what the interest of any Trinidadian will be in investing in the industry here. One expects that once the CSME comes into operation there will be joint ventures by industries throughout the Caribbean, but in cases where there is such a gap in energy costs it is difficult to see how this can work. In any event even the matter of the CSME to which the region appeared to have committed itself appears to be going no where quite fast. There are still concerns, among other things, about the movement of labour in the region. The issue of a Common Currency is hardly talked about and there are numerous other obstacles around. But generally we are having more of the same that we have had for quite a long time. Our leaders meet and say beautiful things about the region and their commitment to its development but when they get back on home turf domestic issues consume them and they begin to back peddle. This problem has been around for some time and has led some persons to be sceptical about our ability to transform ourselves into a Caribbean Single Market and Economy without political integration.