Thursday, 12 February 2009

Get smart, Philippines

Outside the Box
John Mangun
Business Mirror

Two Bible verses summarize my opinion of the current financial crisis:

The first describes the cause—Proverbs 16:18: “Pride goes before disaster, and a haughty spirit before a fall.” One who has a haughty spirit is scornfully arrogant. The second forecasts the future—Matthew 5:5: “Blessed are the meek, for they will inherit the land.” One who is meek displays patience and humility.

The United States had such pride in the economic system it created, borrowing money from foreigners to buy their foreign-made goods. The Americans arrogantly believed this credit cycle could continue forever. So arrogant were they that they then adopted this same system for their housing and banking industries. And now come the disaster and the fall.

Perhaps thinking about the idea that “it takes a thief to catch a thief,” the Americans just elected a group of economic fools to rescue them from problems created by other economic fools.

Ignore the US stock-market fall. It means little. The market dropped because wise money knows that the solution the US government is proposing for its banking system is, in effect, to nationalize and for the government to take over the banks, leaving public shareholders with nothing. On Tuesday, Dow Jones Index components Bank of America lost 19 percent, Citigroup dropped 15 percent, American Express fell 10 percent and JPMorgan Chase lost almost 10 percent. The “bank bailout” of Treasury Secretary Timothy Geithner will not bail anything out. It will only transfer bad assets to the government and, therefore, the US taxpayer. And how the purpose of all this, to increase bank lending, will be achieved is a complete mystery.

The Obama economic-stimulus package will stimulate little except the special economic interests, and that will have little positive impact on the economy. The Obama administration will spend the equivalent of a minimum of $5,000 for every man, woman and child in the United States. But instead of giving it directly to the people the money is supposed to help, the government will spend it. And we all know how well every government spends taxpayer money.

That is about the proud and haughty. What about the meek?

It was rightly predicted that a large portion of the world’s economic power would go from the West to the East. Unfortunately, the “East” meant countries like Japan, South Korea, Taiwan and China that took that power in the same way a flea sucks from the flesh of a dog. Instead of using a decade or two of prosperity to build their domestic economies to achieve self-sufficiency, they only learned to become larger and stronger economic parasites, living off the debt-rich blood of the West.

Taiwan’s exports declined 44 percent in December. Exports are 231 percent of total GDP in Singapore, in recession with 2009 economic estimates at minus 5 percent. Korea’s economy contracted by 22 percent in the last quarter of 2008.

After the shift to the “East,” futurists also postulated that power would shift to the “South,” where we find the meekest of the meek. Think Brazil, Argentina, Chile, the Philippines, India and South Africa, for example. These countries have struggled through the manipulation of gold and currency prices, restrictive trade policies when “globalization” favored only the economic parasites the West needed, and other neocolonial First-World policies.

The Philippines has become so brainwashed by the West and its local mouthpieces that we cannot see our strengths. Again, exports mean little to the Philippine economy, as I pointed out through the work of common-sense economist (perhaps the only one) Dr. Cielito Habito. We are reading of some 500,000 job losses in the United States last month, yet, where are the airplanes filled with returning overseas Filipino workers the “experts” keep warning about? They need Filipinos! Microsoft just fired 5,000 employees. Yet, they are lobbying the US Congress for more, not less, immigrant working visas. And Obama’s new Commerce Secretary Judd Gregg is a very strong supporter, described as “unabashedly endorsing an expansion of H1-B workers for the technology industry.” Speaking of overseas Filipinos, an incredible Philippine strength is the hundreds of thousands of soon-retiring Filipinos particularly in the United States. All those Filipino migrants during the 1970s and 1980s are reaching their “golden years” and are discovering that the “land of milk and honey” just isn’t. The general manager of the Philippine Retirement Authority should be given a Cabinet-level ranking and position. And a separate and heavily funded department should be established therein just to encourage Filipino retirees to return to the land of their birth.

Did you know that foreign direct investment to the Philippines surged by 68 percent in November? Why? Mining. Gold prices will move far above $1,000 per ounce in 2009. The Philippines has the third-largest gold reserves in the world. Help the government encourage, not discourage, this wealth builder while maintaining responsible mining practices. Build your personal wealth by owning shares of local mining companies on the stock exchange.

To those who continue to whine and blame economic woes on Philippine politics, remember this: Economic wealth creates political stability and a better political system, not the other way around. China under Mao Zedong was an economic disaster, and the politics no better. Dogs fight over empty bones, not over plentiful cuts of meat.

Get smart, Philippines. Almost everything needed for renewed economic prosperity is right here. And what the Philippines can use from the West will return to them something they desperately need: a profitable investment.

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