Shall we 'cease wasting, stealing the people's savings and taxes?'

Wilberne Persaud, Financial Gleaner Columnist

Last week's query on gain from relocating Up Park Camp evoked interesting emails.

One asks, "Do you read Mark Wignall in the Observer and check the cartoons? Omar Davies - incompetent dunce, Audley Shaw - financial wizard like the earlier Seaga myth. How about 'fit and proper' test for finance minister? As to wasting money on FINSAC enquiry to pay cronies in a political circus, why don't they publish accounting forensic reports and court documents? They don't want John Public to know. We get the government we deserve: 'One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors' - Plato. Golding, Vaz, etc. We corner dark fi true!"

One may discern bias, but perhaps it is best described as points of view - Davies always in a dunce cap, Wignall singing Minister Shaw's praises for JDX, an imposition, or forced move, as they say in chess; neither masterful nor unusual gambit, innovative defence nor line of attack. Columnists and cartoonists do have a point of view. They are entitled to their opinions, though not their own facts, which provide their only obligation: to speak truth.

Certainly, if thought influential and widely read, opinion columnists are fed propaganda posing as fact. Political operatives, representatives of foreign powers, practitioners of espionage on behalf of private corporations or governments all feed them material. Such unsolicited sources and materials are limitless.

Conversely, columnists or cartoonists may 'sell out', or be obviously, if not openly, committed to a political party, as seems the case of Fox News in the United States. Recently, it emerged that Fox 'prohibited' use of particular code words, assessed by focus group interviews, in reporting President Obama's efforts to get a health-care bill through Congress. So yes, these are issues, but the antidote is always the same: eternal vigilance is freedom's price.

Another interesting comment finds the column: "Well stated. Alas, the rush is on to sink the society even more quickly. One side boasts of debt via 'markets', the other boasts of continuing debt from the multilaterals, and both for 'policy' purposes. Up Park Camp - both sides suffering intellectual breakdowns grasp at any appearance of a 'Ponzi' disguised as investment as the hands are out for the 'rent'. Every day the evidence piles up of 'bankruptcy'. A 'tipping' point is to foot."

This correspondent refers to arrears of withholding tax payable and sums due Jamaica's pension funds - the value of which the Government, stonewalling, inexplicably refuses to reveal - and the proposal for one collection agency for tax and statutory payments, including National Housing Trust, National Insurance Scheme and Heart Trust/NTA, under the payroll tax amalgamation scheme.

What a huge catchment to legally park (rinse) funds awaiting delivery to their rightful owners. The major concern expressed is the way Government sourced funds in the past, while present operations, in important respects, actually mirror that past.

Deny as we might, the fact is our financial services sector in the 1980s to mid-1990s enabled and facilitated extraordinarily wasteful private usage of accumulated financial capital.

Reliable, independent estimates of return on capital confirm this view. Pension funds, consolidated insurance financial assets, unit trust funds and ordinary people's savings evaporated in a speculative real estate bubble.

Government responded with FINSAC to counter fallout and disorder our society would experience should every depositor, insured, and pensioner at local institutions get a measly 10 cents in the dollar for all their holdings. Jamaica was ripe for implosion - the 1960s song Everything Crash by comparison, woeful understatement.

We still, today, stagger from that profligate mangling of opportunities to use people's mobilised capital productively.

Today's propaganda blames FINSAC, but what absolute nonsense!

Consider this scenario of firefighters tending a burning inferno. They use the axe to break in, rescue victims, flood the premises with high-pressure water, deploy firefighting foam and put out the blaze. But tomorrow's headline reads: 'Firefighters destroy building, rescued occupants survive destitute'. Hold a moment. Was there an arsonist, do we enquire?

Our government must find funds for two separate kinds of expenditure, regular housekeeping, as in the annual Budget, and for developmental efforts. Well over J$150 billion of these funds, with continuing interest cost on government paper, is attributable to rescuing Jamaicans burnt by our financial-services companies' and their clients' bad decisions and gambling -- including fraud - of the late 1980s and early 1990s.

One might view JDX as a means of recouping some of those costs. Yet we went further, creating Cash Plus and Olint, evaporating more deployable capital to the ether - read private pirates' pockets!

What can we do? What should we do? The notion that in a capitalist, free enterprise entrepreneurial and profits-driven economy there is no role for government, except policing and courts, is absolute hogwash. The multilaterals and OECD developed countries may tell us this. They, however, do otherwise. The difference is, they usually spend their own money. We borrow.

If they must borrow, as the United States today, hordes of individuals, corporations and states across the world willingly lend.

Nobody cares if Washington wastes it corruptly in Iraq or gives it to the wealthiest two per cent of their population in tax breaks - at least not until last week when markets pushed up US bond rates.

So I must agree with my correspondent that a 'tipping point is to foot'. The only way to avoid toppling is to spend wisely on productivity enhancing activity. If we develop a social contract allowing domestic capital accumulation and use, we shall emerge from this successfully.

Who imagined Jamaicans could mobilise the billions placed with Cash Plus and Olint? Greed always exists. Ponzi schemes merely create the necessary euphoric hype.

Could we not foster belief in profits from useful, productive schemes people can support? Perhaps if we try, we will appreciate the enormous damage corruption unleashes on the society's chances. Imagine, our people trusted Cash Plus more than big banks and their elected government. Something's very wrong here.

The last email comment on Up Park Camp I share with you nicely opens the door to humour. "You just titillated us. I thought you were going to show actual connections and sinister dealings. But you just asked the question who's likely to benefit!"

Like K-9 patrol, you smell a rat but can't immediately name him, or her, for that matter. Full disclosure: your columnist was a member of the FINSAC board.

 
wilbe65@yahoo.com