It’s all about the economy

Those who know me well know that I am opinionated and can be very straightforward. To be honest, it sometimes works against me as I often forget that diplomacy may ask us to cleverly conceal views. Nevertheless, I accept that it is among my flaws – it is part of who I am.

At the end of this mortal life we may be called upon to explain the moments when we stood up for what we believed as well as the moments when we defied our conscience and remained silent. Two events are on my mind as I write this. First, there is the attempted coup that happened back when I was just 17 years old in 1990.  July 27 2012 quietly came and went. The Commission of Enquiry into the events of 1990 still continues.

That event, 22 years ago was perhaps the darkest moment in the history of Trinidad and Tobago. I pray that at the end of this process we will be closer to understanding what exactly motivated this attempted coup and bring to justice all those responsible. My definition of responsible includes those who knew ahead of time and perhaps by their silence allowed it to happen. Perhaps my position is naïve but it is still my position.    

The second event on my mind is the state of the global economy. August 9 2012 will mark the fifth anniversary of the beginning of the credit crunch. It was on August 9 2007 that some banks found themselves frozen out of the debt markets, leading to the Northern Rock collapse and setting the stage for the 2008 meltdown.

Back then we were warned that we were facing the worst economic crisis since the depression of the 1930s.  Five years on, we realise that analysts were wrong as in so many ways—this on-going economic turmoil is far worse than the 1930s.

The UK Office of National Statistics recently reported that national economic output had fallen 0.7 per cent in the second quarter of 2012. The news networks carry stories of summit after summit and rescue package after rescue package.  Nothing seems to be working and honestly, the endless series of bailouts is harming investor confidence.

If it is one thing that financial markets detest, it is uncertainty.  In the midst of this economic turmoil with seemingly no end in sight, the government of Trinidad and Tobago, took the opportunity to appoint from amongst the likely candidates for the role of Central Bank Governor, one who on the face of it had a weaker background than other candidates. This move has not inspired as much confidence as other choices would, but regardless, I wish him the best.  

The more one reads about what is happening in the global economy, the more disturbed one becomes. I have enjoyed economics ever since my first class with Ms Basdeo back at St Mary’s College. Despite starting and then dropping out of a PhD programme on three different occasions, I still cannot stay away from the subject of economics.

Online, the debates over the US Federal Reserve’s and the UK Chancellor’s use of Quantitative Easing, rage fast and furious on certain web fora. Hopefully finance and economic gurus will forgive me for saying that essentially, the US and the UK are simply printing money at this stage in a desperate attempt to at least create the illusion that the economy is not in recession.   

It may be harsh to say but the only difference between Weimar Germany and these modern economies is that the state sponsored increase in the money supply is now electronic. This technique did not really work for the Japanese as they have tried using this same tool for years with no success.

Despite these seemingly futile initiatives, there appears to be little political will to take more decisive action. To believe that these events have no impact of Caribbean economies is unwise. The global economy is exceedingly fragile at this juncture.  

The London 2012 Olympics has therefore come at the perfect time. It is a most welcome distraction away from the dizzying roller coaster ride in economics relayed by the daily news networks  Here in the UK, the Prime Minister will bask in glory each time he congratulates a British medallist and each time he shakes the hand of a foreign business person announcing some new investment in the UK. But let us see what happens in September.