THE US economy is starting off its worse year since 2000 in terms of released economic data coming in way below estimates. In the last month the expert consensus on everything from “Personal Spending” to “Housing Starts” through “Wholesale Sales” are below expectations.
Even as I write this, the American apologists are running for their computers to tell me how little I know about the US economy and how great things are over there in the land of milk and honey. And of course, it is the weather that we must blame. Home construction fell like a rock, down over 50 percent in those areas affected by the last winter storm. Yet amazingly, according to US government data, the storm did not seem to affect anything when it came to the increase in non-farm payrolls.
But last year when the payroll numbers were released for the same period and were down, the weather was to blame.
We know that government moves the data to serve its own political purposes. However, some data cannot
be massaged.
Nearly 50 percent—47 percent to be as exact as possible—of American adults are receiving more money from the government than they are paying in taxes. This is not in the benefits from a newly built bridge or medical insurance. This is cash and goods like food and cell-phone subsidies.
An argument might be made that it is a much-needed and justified redistribution of wealth from the “rich” to the “poor.” But that “progressive” concept is all nonsense. On January 21, 2009, the total US national government debt was $10.625 trillion. Today that debt is $18.005 trillion. Over $7 trillion or $20,000 for every person in the US has been borrowed to “help” the disadvantaged.
As I said before, the total US economic output is up 18 percent against the national debt being raised by 70 percent in 6 years. In 2008 the US debt ratio to the economy was 76 percent; it is now 102 percent. But, as we are told, the US economy is doing just fine.
The Philippines is projected to show the second strongest economic grow on the planet in 2015. Whether that estimate proves to be accurate or not is really unimportant. What is important is that the nation’s economy, currency exchange rate, inflation, government budget deficit and government debt are the envy of virtually every other country in the world. But it is almost impossible to find much commentary particularly from local pundits who have anything good say. Any positive comments are always qualified with terms like “inclusive growth” or criticism of how all those positive economic qualities are being achieved.
A few years ago, the mantra was that the call center and outsourcing business would soon be dead. Now it is remittances again. Yes, remittance growth in January was low and this may be the start of a trend. But by the same token, we are also showing some unexpectedly better numbers in foreign direct investment. Maybe that will be a new trend also.
Yet when you ask the naysayers about the problems with the Philippine economy and its structure, and more important, the solutions for those problems, the answers are all the same.
The Philippine economy is controlled by the oligarchs. Assume for a moment that is true and is a negative, what is the solution? Industries were privatized and sold to these wealthy groups. The reason for that was that the government did not have to funds to properly capitalize and run these industries. Should we now buy them back and make them government corporations?
We are constantly reminded about unequal wealth distribution. No doubt about that fact. Perhaps Henry Sy was thinking about establishing major control of the mall business when he opened his shoe store in Quiapo, Manila, in 1958. Should the government buy the SM malls and perhaps do a similar distribution as with the Comprehensive Agrarian Reform Program.
“The Philippines must industrialize to give employment to the less-educated.” That is a sound idea. Twenty-five years ago the areas south of Manila had many sport-shoe manufacturers that all closed down when the companies realized they could increase profits by moving to China. And what products should we manufacturer in this industrialization? I am sure that there are many like you and me who would gladly invest in a profitable industrial company.
The No. 1 rule of poker is that the winning player is not the one with the best cards. The winner is the one who best plays the cards that have been dealt. So far we are doing pretty well and there is always room for
improvement.
The US had all the high cards and blew the game.
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E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter
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