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Some people stand opposed to government profligacy no matter the party in power

by Rick Lowe

I've been having an e-mail exchange with a prominent supporter of the PLP about the folly of agricultural subsidies and sent him a link to this article from the Nassau Institute.

Of course, his response was no less thoughtless than FNM's when one differs with their failed public policies. He said:

"I find it amazing that you have all of these brilliant suggestions for the Agricultural Sector now that the Bahamian people have kicked the FNM out."

Then he goes on to say:

"By the way, stop wasting my time with your right wing sentiments."

I consider myself a classical liberal (YouTube Video) and I will continue to offer suggestions for better public policy no matter who the government is.

I also sent him this additional link from the Nassau Institute about the FNM's 2010 foray into tax dollar waste.

I'm one of those people that stand opposed to government profligacy no matter the party in power. I'm not sure my protagonist can say the same thing however. Judging from his comments the PLP can do no wrong. Unless they're superior to other humans in some way, they're equally as fallible as the rest of us. History shows they are no better or just as bad at fiscal prudence as the FNM.

Finally, you might enjoy the document by John Hedden on Bahamian Agriculture below, that ran here as a seven part series last Fall.

If you can't read it on the screen, click here to download a pdf version.

Moral arguments against high taxation

Rick Lowe

Now there's an interesting consideration.

As Eamonn Butler points out at City A.M, a British business newspaper and web site, "WE ALL know the moral arguments for taxation: it pays for police, roads, hospitals and other vital services. But there is a moral case against taxation too – and a surprisingly strong one."

His argument is extremely cogent and hinges on the fact that not only is taxation "confiscation by coercion", but the money is taken and spent by groups that think their "values and priorities are superior to other people's…"

One hopes that the political class will read his suggestion that we "Don't ignore the powerful moral arguments against high taxation."

You can read the entire article here…

One Little Country facing Many Giant Evils: Collective Bargaining/Unionised Activity in the Spotlight

by S3S

By almost any measure,The Bahamas is a ‘little’ country. Common reference points to justify this label include land area (~5,350 square miles); population (~313,000, 2010 census); and economy (e.g. Gross Domestic Product; Gross National Product; and Gross National Income), all of which confirm its smallness. Additionally, barring one or two industries and certain sports, the country’s impact on the region and globe have been limited. The Bahamas can be classified further as a ‘small island developing state’.

By almost any measure and in sharp contrast, the challenges faced by The Bahamas are 'giant', by which I mean extremely challenging, enormously powerful and affective, with the potential to cause great damage to the political, economic and socio-cultural development of the country. The challenges are giant also, in terms of being supra-governmental, that is, not the fault of any particular administration (although both political parties, having had multiple chances in government, have contributed significantly to or exacerbated the situations they found).

One such giant challenge is the collective bargaining and unionised activity that is rife in the Bahamian workplace, generally. Recently, we have witnessed unrest in the public sector, as the current row with the Customs and Immigration workers shows (and rows with Prison Officers and Air Traffic Controllers have shown). The queue of public sector malcontents seems endless, as does the ongoing rhetoric, which imposes on our consciousness, whether we welcome the dialogues or not. Such disruptions of productivity are not consistent with an economically progressive country, especially a small one.

Any economically progressive country should have three overriding goals: (1) to create conditions to encourage enterprises to locate operations in their country and remain there; (2) to develop a skilled and flexible labour force to service that enterprise stock; and (3) to promote good relations between employers and employees by encouraging sustained industrial partnerships, which do not include the normal antagonistic industrial unrest so common in The Bahamas. To these three goals, we might add the aspiration to reduce the state, particularly the public sector and the size of Government spend (estimated by the new Prime Minister to be 59% of GDP in the last year of the previous Administration!) It is doubtful whether Bahamas Governments, past and present, can claim to have pursued either of the above goals with any zeal.

In the absence of desire or motivation to change our industrial landscape, we cannot have public sector workers enjoying the largesse of public employment while making unreasonable demands on a Public Treasury that has to borrow to service its payroll.

One of the major changes seen by the industrial world over the past four decades in particular, has been the steady decline in the impact of unions and collective bargaining in the workplace, due to a growing proportion of small and medium sized entrepreneurial firms, advances in technology and more advanced management and leadership practices which promote collaboration over confrontation.

In The Bahamas, we have been reluctant to update our thinking and remain encumbered by many of the industrial relations mental models that prevailed in the 1950’s through 1970’s, and which underpin our workforce generally. It is not uncommon to hear workers militantly speaking of ‘shutting down a company’ while assuming an ‘us versus them’ mentality. Socially, we celebrate union executives, actively encourage union activities and events and support unions with wide coverage in the local press, whilst treading carefully so as not to offend them. Consequently, one of the biggest and most stubborn obstacles to progress in our beloved Bahamas is the power and resilience of unions. In fact I would go so far as to describe the challenge as a 'giant evil' in our society!

We have treated this giant evil with kid gloves and our reluctance to deal with the issue head-on means that it will be much more difficult to resolve the longer we postpone the debate. Further entrenchment of an already antiquated labour model, increasing social and economic costs of changing the model and a Bahamas that sadly becomes less and less attractive as a Foreign Direct Investment (FDI) destination are but three outcomes of leaving unchallenged this giant evil.

Links for thought

by Rick Lowe

I was enjoying the holiday weekend so much I forgot to think seriously about a blog for today. I usually prepare them the night before, or sooner, and post them to show up each morning around 9:00am.

So having run out of time, I thought you might like some quick reads that I found a) interesting, b) heartrending, c) Proof that governments can reform and d) Some political humour to bring a smile to your face:

a) Anti-Psychotic Drugs Found to Bust Cancer Cells…[More]

b) END OF A NIGHTMARE: NFL hopeful who was jailed for rape is cleared as accuser admits lying…[More]

c) Canada's Economic Reforms…[More]

And finally, some humour.

d) Funny Cartoon about Washington’s “Spending Cut” Charade…[More]

Josiah Henson: Truth Stranger Than Fiction

by Rick Lowe

I've heard of and read work by Booker T. Washington, Frederick Douglass and W.E.B DuBois and of course, Harriet Beecher Stowe, but I stumbled across "Father Henson's Story of His Own Life" recently and it's now made the top of the reading list.

It baffles me sometimes how people or events from different parts of history go beneath ones radar and how I missed this I'll never know.

Mr. Henson eventually escaped the brutality of slavery and moved to Canada where he helped "free fellow slaves" and had an audience before Queen Victoria to discuss the cause of slaves and fugitives from slavery.

I reiterate, it's unusual how I'd never seen this little gem of a book before, but I'm looking forward to finishing it.

One thing that never ceases to amaze me throughout the ages is man's inhumanity to man, across cultures and within cultures. Thank goodness these things are documented and we live in hope the last vestiges of this scourge (that still goes on in places) will be removed from the face of the earth forever.

Buy your copy here…

Lessons in Freedom: Wealth versus Job Creation?

by Tibor R. Machan

“When you’re president, as opposed to the head of a private equity firm, your job is not simply to maximize profits,” said president Obama recently. He added, “Your job is to figure out how everybody in the country has a fair shot. Your job is to think about those workers who get laid off, and how do we pay for their re-training?”  Obama continued: “My job is to take into account everybody, not just some. My job is to make sure that the country is growing not just now, but 10 years from now, 20 years from now.”

To begin with it is not the job of the president of the United States of manage the country’s economic affairs.  His job is to administer a system of public policies aimed at protecting everyone’s rights as a citizen.  That means everyone’s rights to life, liberty, and pursuit of happiness or, in short, the liberty of all.  Not the welfare or employment or happiness of all but everyone’s right to pursue these values.  Just like the cop on the beat, the task isn’t to get everyone to where he or she is going but to secure everyone’s liberty to go wherever he or she wants to go, including, if that’s how the citizenry chooses, staying put.  (Freedom has no particular goal; it has to do with making it possible for citizens to choose their goals, so long as these are peaceful ones.)

But there is also Mr. Obama’s colossal ignorance of economics: jobs are created when wealth is spent!  So, when some firm, be it a ma and pa grocery story or a massive equity corporation, makes profits, those who own the profits, the wealth Mr. Obama so callously demeans, then proceed to spend on various goods and services they wish to have.  No one just wants wealth--a bunch of resources sitting in a bank or wherever.  The wealth is supposed to serve as a means to obtain one’s children’s healthcare, education, the family’s vacation, recreational facilities, etc., etc.  And all of this is produced by people with jobs.  Without the wealth, the jobs dry up.

So when capitalist institutions enable those who earn profits with their efforts, they are as close to creating jobs as anyone can possibly get.

How else does Mr. Obama imagine jobs are created?  By taxing the citizenry and taking the funds so taken and investing them in public works projects?  But that’s shooting in the dark--how would those in government know which projects will generate bona fide instead of sham jobs?  One major element of a free market economy is that it is the sphere where people spend the profits they have earned through the purchase to stocks, through investing in successful enterprises, spending from which jobs are created.

It is indeed wealth that creates jobs, what else would?  From the tiniest expenditure of a child who is spending a miniscule allowance to a humongous bonus earned by an executive who steered a firm toward immense profits, it is such wealth that leads to the creation of jobs.  When the wealth is spent, entrepreneurs figure out what it is that those who spend it want to purchase and proceed to support enterprises that produce this.  That is how employment comes about, not from fanciful government projects which may or may not fulfill the wants and needs to people who go shopping.

Once again we witness Mr. Obama attempting to discredit the free market place and replace it with government managed “economic” policies. Shame on him and let’s hope his ruse is noticed by those considering sending him back to the White House.

May 27, 2012

We are delighted to present Lessons in Freedom, essays by Dr. Tibor Machan, for your pleasure.

Dr. Machan holds the R. C. Hoiles Chair in Business Ethics & Free Enterprise at Chapman University's Argyros School of B&E.

Visit his web site here...

Elmore James - Song of the week - May 28, 2012 - Sho' Nuff I Do

by Rick Lowe

You knew it wouldn't be long before I got back to some good ole Delta Blues didn't you?

Elmore James was born in 1918 in Mississippi and was simply an amazing talent. Visit this site (DeltaBlues.net) for a nice biography…

Classic songs written by Mr. James that have been covered so many times one can't list all the folks that have done so are songs like; One Way Out, Dust My Broom, The Sky Is Crying, Look On Yonder Wall, Done Somebody Wrong, Standing At The Crossroads and of course, Sho' Nuff I Do are standouts for me.

Don't miss an opportunity to pick up any CD's or even long play albums you can find by Elmore James. You'll quickly learn why he was known as the King Of The Slide Guitar.

Hope you enjoy Sho' Nuff I Do below.

Sho' Nuff I Do

 

 

PLP's mortgage relief plan changed? Did reality set in?

by Rick Lowe

Here's the new twist according to the Speech from The Throne:

"The plight of homeowners in financial distress must be addressed if a stronger economy is to be restored."

"My Government will therefore work with the clearing banks and other institutional lenders to develop a financially sustainable mortgage relief programme aimed at assisting distressed homeowners in saving their homes from foreclosure. Participation in such a programme would be voluntary."

Read the speech here…

Mr. Hubert Ingraham (FNM), former Prime Minister stated in an interview with The Nassau Guardian that; "it appeared as if the government had scaled back its mortgage relief proposal. He said the plan presented in the Speech from the Throne seemed more practical, unlike the version that was talked about before the PLP won the general election." Read the entire article here…

The "revised" mortgage relief programme seems less dictatorial than what they were suggesting on the campaign trail, but it remains unworkable without adding more to the national debt that the country cannot afford.

What intrigues me about this "Helping people at gunpoint" is that banks are being made the scapegoats.

First, a mortgage is a legitimate contract agreed by both the lender and the borrower, incorporating terms for non-payment that were all agreed to up front before funds were advanced.

Second, the banks are being demonised in this matter as "profiteers" that are cold hearted. The banks are not the only people to "profit" from mortgages now in distress. Why not ask property developers, architects, real estate sales people, lawyers, accountants, the government et al to return the profit/money they made from each sale? And,

Third, if the programme will now be voluntary for banks, one assumes the derogatory noise in the market about banks by the political class will cease?

It merits repeating that it must be incredibly tough for people to lose their homes (and my sister might lose her property so I understand first hand) but to throw reason out of the window in these contractual matters, is whimsical at best.

To paraphrase Penn Jillette, voting for our government to use force to get banks to give money to people who happen to be in arrears with their mortgage is immoral, self-righteous, bullying, laziness.

We will know soon enough if rational thought has slipped in to change the original concept of the mortgage relief plan. But all the promises during the campaign make it very difficult to step away from providing "relief".

Details of the PLP's mortgage plan from their 2012 election "Charter follows:

Bahamas Customs & Immigration union need to see things as they are

by Edward Hutcheson

Listening to the demands of the Customs and Immigration Union members, makes you wonder if there is any reasonable dialogue happening in that organization. Two of their demands stick out like sore thumbs and you wonder if the term “economic fallacy” has application here. Before the last election we heard that members wanted their overtime pay to be listed as a part of their regular salary, this would look good on a mortgage application but who is to say that an employee will be receiving that level of overtime or pay during the life of his mortgage. It only qualifies you for entry into a higher market, since a specific salary figure is on a Government letterhead. But, what then? With the plans ahead for changing our tax regime, with the probable combination of VAT and Tariffs, it would be advisable that the leadership of the Union spend more time helping the government to work out the kinks that are bound to come. WTO membership demands that we make those changes, changes that will result in a downsizing of the Customs Department and the expansion of Immigration.

If that was all to it, we could look ahead. Yesterday there was a news clip, where Mr. Sloan Smith told us that 80% of the overtime revenue came from somewhere else. I am still trying to figure out what he means. Is he saying that this is not revenue that belongs to Government or that The Customs Department is no longer the direct employer in this regard? The officers in this particular union, must understand that they are not self-employed and that they are government employees. Mr.Smith comes across as a sensible, articulate individual, but he has to go back in his memory to see who came up with these two ideas that smack of entitlement.

Hopefully, none of his members have a mortgage problem, because these two issues may come up in the discussion and  even persons in the group they supported will ask for an explanation. They may have been quiet during the campaigning but now that the bills have come due, this is the time for the noise to cease, and even the utterances from the DPM and Chairman Roberts about “prosecution” are but smokescreens; none of them would like to meet the former Prime Minister in court, even on a rainy day. There is nothing wrong with making demands, but we create problems when we give the impression that those demands are exclusive to everything else that is going on in the country, those who take this line are heading for a myopic existence.

Labour unrest has a dark-side when used as a tool of political expediency. The outcry that came from union leadership about the amount of space they got in the Charter for Governance should have informed them of what was ahead. If Union leadership believes that Labour demands can only be fulfilled through political means in a nation that is almost 40 years old, they need to think again. But, when we fool ourselves that our needs are more pressing that other citizens in the nation who may not even have a job, we end up being deceived; regardless of how important we think our lifestyle is. Those who guard the nations resources have to see themselves at a level that is functional and proactive, and that “functionality” dictates that we (Bahamians) must see things as they are, before we make a move to where we think they should be.

May 25, 2012

V. Alfred Gray. Same promises, different day?

by Rick Lowe

Here we go again, a new minister of agriculture is going to save the day and make The Bahamas self sufficient in food. Food security will be his first concern... Will the results Mr. Alfred Gray (PLP), recently inducted minister, promises be any different than those before him. In fact he was one of those ministers in a  previous incarnation.

Several years back, Mr. Pierre Dupuch (FNM), as minister of agriculture, stopped food stores importing bananas to "help" Bahamian farmers. Well it inconvenienced food store shoppers as the farmers could not supply the product. But guess what? All one had to do was drive to Potter's Cay and the vendors continued importing foreign banana's for the convenience of their clients.

Of course the results were dismal and eventually the programme was abandoned.

In more recent years (2010), Mr. Larry Cartwright (FNM), as minister of Agriculture, devised a $42 million plan over five years to assist local farmers and stem the tide of food imports.

No results have been reported yet, and they may never be known, if history is a yard stick, but we can assume they've been no less dismal than banning banana imports.

In the seven years from 2005 through 2012, the Ministry of Agriculture and Marine Resources and the Department of Agriculture combined have spent some $81 million, and what do we have to show for it?

Now Mr. Gray, is going to save the world, but if he was to look around New Providence he might enjoy the farmers market at Doongalik Studios on Village Road or once a month at the Bahamas National Trust. Good things are happening without government spending a dime of taxpayer funds.

In other words, the ingenuity of modern Bahamians is helping them create a market for their goods.

Instead of grandiose plans of food security that government promotes at the expense of everyone, for the direct benefit of a few, the private sector is developing this on its own.

Sure, the food stores might be able to have a specialty area for locally grown produce, poultry or meat, but it's a pipe dream to think we can be self sufficient in food at competitive prices. We simply do not have the capacity.

If there are farmers producing quality products all we need is a middle man or two to get the product to market. This way, we do not have to use taxpayer money to pay for packing houses where product rots yet the farmers still get paid by the taxpayer.

It's so tiring listening to the same old rhetoric. To paraphrase Eamonn Butler from his recent publication for the Institute for Economic Affairs in London, England, Public Choice - A Primer, if you buy a cup of coffee in the free market, you know exactly what it will cost you. You pay the whole cost and you get the whole benefit. But if government implements a programme, say in agriculture, the costs and benefits are spread among many people, yet you don't know exactly what it will end up costing you, or if you will get any direct benefit.

I think it would be better to close the department of agriculture quite frankly. I've had enough of the same promises every five years.

What's that saying about doing the same thing over and over and expecting different results?

Back in September 2011 Mr. John Hedden released an overview of Bahamian agriculture, you can read his seven part series here.

I would think Mr. Hedden's experience would be of some use to our Ministers of Agriculture? But on second thought that's doubtful as they all come to table believing they have a magic wand. Problem is the wand is our tax dollars and every new generations debt burden to bear.