Falconer minister of misinformation

Gordon
Robinson, Contributor

Sometimes I sit down and I wonder. Have I been as brilliant as I believed for advocating over the past 25 years a system of separation of powers as Jamaica's saviour insofar as governance is concerned? In that system, we would vote only for the leader of the country's executive (prime minister), who would then have a free hand (subject only to due diligence by the people's parliamentary representatives) in appointing the rest of the Cabinet.

It's not perfect. A perfect system would have me appointing all Cabinet members. But, in the absence of such narcissistic perfection, it's the best that can be devised. Or is it? Given a free hand in the appointment of senators and then, in the important matter of appointing some senators to the Cabinet, our prime minister came up with one Sandrea Falconer.

Despite her lack of experience at the helm of any corporation, business or patty shop, Ms Falconer was appointed de facto minister of information. Her qualifications, apart from political board appointments, include TV reporter at JBC (now defunct) and director of communications at Air Jamaica (now defunct).

Business dictionary.com defines 'information' as "data that is (1) accurate and timely, (2) specific and organised for a purpose, (3) presented within a context that gives it meaning and relevance, and (4) can lead to an increase in understanding and decrease in uncertainty".

Somebody should tell Ms Falconer. On Wednesday, March 21, she sought to calm the nation on the subject of the sliding dollar with the following inanity which she subsequently claimed needed clarification. In addition, it's my opinion that it was as accurate and timely as Dick Cheney's infamous 2002 propaganda offering: "Simply stated, there's no doubt that Saddam Hussein now has weapons of mass destruction."

This is what Ms Falconer delivered as 'information':

"It's a concern to all of us because we know what the impact of a sliding dollar does to the prices, especially for the most vulnerable among us. We expect, though, that when we sign off on the IMF agreement, we will have money in the Consolidated Fund and, therefore, we will ... we won't have the kind of impact on the dollar as we're having. I think there's a level ... there are persons who take advantage of situations like these, unfortunately."

CLEAR AS MUD

Now you understand what the humorous adage 'clear as mud' means. She expects the signing of an IMF agreement will result in funds flowing into the Consolidated Fund, which will also somehow automatically mean a stop to the sliding dollar.

Really? Seriously? That single statement is filled with so many non sequiturs; so factually inaccurate; so garbled; so meaningless and irrelevant, that it can't have been intended to transfer 'information' properly so called. This is party political propaganda, plain and straight, with absolutely no reference to anything resembling 'information'.

Why do I say this? Elementary, my dear Watson. The IMF won't pump one single dollar into the Consolidated Fund, no matter how many agreements we sign with it. By the way, Sandrea, we haven't yet signed anything but a conditional staff agreement, which isn't even on the IMF board's agenda for the immediately foreseeable future, so not even the first premise of your ingenious plan to rescue the sliding dollar seems likely to get off the ground any time soon. In the meantime, the dollar slide is quickly becoming the dollar drop, soon to turn into the dollar dead.

The purpose of an IMF agreement is twofold. First, to use IMF loan funds to shore up our national reserves. To that end, any inflows from the IMF will go directly to the BOJ and not to the Consolidated Fund. Second, the now notorious IMF seal of approval will allow us to seal Jamaica's external debt coffin in which we are currently lying, while the lid closes ever so slowly above our moribund economy. This we'll be free to do by seeking additional funds from the international lending agencies that, like us, look to the Almighty IMF to guide them regarding their lending policies.

Those borrowed funds will reside, temporarily, in the Consolidated Fund for use in implementing fiscal policy. Not one dollar of those funds can be used to 'defend the dollar', which, if that's a future option chosen by Government, will be a monetary policy option to which the Consolidated Fund can't contribute.

There are three ways of 'defending' the dollar. The only real way is to increase production. This could involve the use of fiscal policy by, for example, providing the police with the tools required to prevent praedial larceny so that agriculture can grow. It's done by spending sufficiently on education to ensure that future generations have the mental and physical tools required to drive growth. It's done by Government spending on local goods and services instead of importing every input from textbooks to chicken feed.

CAN'T DEFEND DOLLAR

However, fiscal policy, used to achieve increased production, is a long-term solution. Not one dollar can be taken from the Consolidated Fund to 'defend the dollar', although I suppose if a desperate, inept Government can go so far as to amend the NHT Act to try to legalise plunder of that sacred Trust to pay external creditors, anything is now possible and any three-card-man can play any number.

This makes Sandrea's subsequent 'clarification' all the more idiotic and confusing. She is reported as claiming she told a CVM reporter that what she meant was that, as a result of the IMF agreement, funds from other agencies would flow into the Consolidated Fund. For what purpose, Sandrea? Good grief! Talk about what a tangled web we weave.

Short-term defence of the dollar involves the use of monetary policy to support a fantasy-based manipulation of its value in a desperate attempt to maintain the illusion of an unreal exchange rate. This protects political capital and can be done by raising interest rates (o/c 'mopping up liquidity'). Been there! Done that! FINSAC'd! Or we could persuade BOJ to dump large sums of foreign exchange into the market at giveaway prices in order to artificially reduce the exchange rate. That's how our net international reserves (NIR) fell from US$1.967 billion (or more than 26 weeks of imported goods) as at December 31, 2011 to US$939.53 million (or almost 16 weeks of imported goods) at the end of February 2013.

During this valiant defence of the dollar, the exchange rate went from J$86.75/US$1 to J$95.66/US$1. So how'd this artful dodging in the name of defending the dollar work out for us? Jamaica's NIR fell 52 per cent and the dollar depreciated 10.3 per cent. Now, doesn't it make you feel all warm and fuzzy to know that, if our minister of information could only express herself clearly, she might be telling us to expect more of the same once the IMF rubber-stamps our brilliant plans?

MISINFORMING PUBLIC

But, since not one dollar of IMF money can be used to 'defend the dollar'; since we've run out of NIR available for that definitively losing strategy; since none of the funds to flow into the Consolidated Fund as a consequence of the IMF thumbs-up can be used in this way; it seems fairly certain Ms Falconer's statement was more misinformation than information calculated to keep 'most vulnerable' mollified for a brief time and to give the Government the breathing space it needs to devise another piece of last-gasp party political propaganda to explain why, if the IMF should ever agree with us, we'll still have a sliding dollar.

By then, Jamaica's only available options will be to:

• Take a long-term view on the value of the dollar and use fiscal policy to encourage production; or
• Increase interest rates in a desperate political move to keep
  votes.

Which do you think our
intrepid Government will decide on after yet another grand retreat in
their SUVs? Once again establishing her ease with the delivery of
misinformation, Sandrea said, "Cabinet ministers will discuss
the growth agenda, including job-creation strategies, human-capital
development, social inclusion, improved security and safety, fiscal
prudence, and the pursuit of a credible economic programme ...
."

"Job-creation strategies"? Whatever
happened to JEEP? Are we finally conceding it created not one single
real job? "Human-capital development"? Come on, Sandrea, that's a
fancy-schmancy phrase for education. Your Government only last week
again put our country's future leaders through the GSAT torture chamber,
which is nothing more than Government's way of making our children pay
for its abdication of its sacred obligation to educate every
child.

"Social inclusion"? In what? Are we getting new
SUVs too? The only time we're included in anything is when we're being
asked to sacrifice. Why not include us in the retreat? Trust me,
Sandrea, we have thoughts we'd like to express ourselves directly to our
Cabinet members.

"Improved security and safety"?
Honestly, Sandrea, I'm desperately trying to keep a straight face. Tell
that tripe to the residents of Shrewsbury. If you really want to discuss
this topic, Sandrea, find ways that we can begin to feel safe and
secure in the presence of the police, the government agency for which
you're about to develop yet another fancy-footworks policy with a view
to same being implemented by them reputedly for our safety. Give me a
break!

And, finally, my favourite, "fiscal prudence,
and the pursuit of a credible economic programme ... ." Are we REALLY
going to discuss "fiscal prudence", Sandrea? Are the SUVs to be sold and
the proceeds used to benefit the "most vulnerable" in even the smallest
way? Are the carnival and World Championships trips to be stopped? Is
the public service going to be cut? If not, don't waste the cost of the
retreat. In the name of fiscal prudence, cancel
it.

This all reminds me of the chap, back in the
1960s, who decided to buy a used car. His friend: "I'll bet you got a
Faulkner?" His reply: "No. I got a good deal!"

On
second thought, my preferred governance system isn't threatened, after
all. Nobody vetted Ms Falconer's appointment to the Cabinet, least of
all, the people's representatives. Hopefully, that would have been the
stage at which her nomination would've floundered.
Perhaps.

Peace and love.

Gordon
Robinson is an attorney-at-law. Email feedback to
columns@gleanerjm.com.