OFFLINE: Junior’s voodoo economics
Was it the late president George Bush Sr. who referred to some of the decisions of the late, great president Ronald Reagan as “voodoo economics?” I believe it was but correct me if I am wrong. And as an aside, when did the GOP stop producing outstanding chief executives like Reagan?
Anyway, I am recycling that phrase not only because it has such a nice ring to it, but more because it is most apt with some of the decisions of one Ferdinand Marcos Jr, supposedly the president of the Philippines, but this has been placed under a serious cloud of doubt.
Anyway, Junior’s weak understanding of Economics 101 is being made more and more apparent with each passing hour. He will, of course, be hounded for the remainder of his presidency for his misguided campaign promise to bring down the price of rise to PHP20 per kilogram, especially now that the country’s principal staple food has been skyrocketing.
No, I don’t mean that rice is being sent to the space, the moon, or Mars, but it might as well be. Rice has reached a price point that the majority of Filipinos will soon have to do without the staple. No, not the bullets used in staplers, silly.
Pardon my jesting, but there is precious little that ordinary Pinoys like yours truly can do but make fun of the misery we all share. Inflation has gone up again last month, after six consecutive months of slowly but steadily heading south. That’s a bad sign because Junior’s advisers seem to have convinced him that all is well and good with the Philippine economy, and it will be all sunshine and roses by the end of the year.
By then, the likes of Ben Diokno are saying, that deadly animal inflation would have been tamed, and the majority of Filipinos will be dancing in the streets to celebrate the grand Marcos presidency, Part 2. Except they won’t.
This week, Junior again committed another fool economic decision vis-à-vis rice. He issued an Executive Order pegging the prices of rice at PHP 41 and PHP45, respectively, for regular milled and well-milled rice.
The EO was issued mere days ago, and was supposed to take effect early this week.
So what’s wrong with this little picture?
For one, it punishes the mostly small businesses that sell rice to consumers as they are being forced to quite likely sell at a loss. See, the small entrepreneurs get the rice they sell from the big traders, who have a monopoly on rice’s transportation, warehousing, and distribution.
Junior is aware of this. He even said so himself. But acknowledging one thing and taking concrete action against it are two different things.
For reasons that remain unclear, he has taken little if any action against the bigtime traders. Instead, he took the insane action of punishing the small entrepreneurs engaged in the buying and selling of rice, be it in the wet markets, or the small sari-sari stores, found all over the archipelago.
In effect, Junior said: So sorry, little people, but you have to lose some money by selling rice for less than the price you purchased your stock from the untouchable traders, some of whom are my friends. Or my wife’s.
On the first day of the new, lower prices of rice, the various news organizations surveyed the situation on the ground, and to no one’s surprise it was learned that the retailers were either still selling at above the retail price dictated by Junior’s EO. Or some simply refused to sell, using the still inclement weather in Metro Manila as an excuse to keep their stores closed.
Oh, there were some who sold at the PHP41 and PHP45 price point, but the stocks being sold were either of very low quality or were old leftover rice purchased from dealers before prices took to the stars and beyond.
The worst thing is that Junior’s EO is open ended. It will remain in effect for the time being, maybe until hell freezes over. Or until he decides that it’s not really working, so might as well declare his order a complete success and let the prices be determined by the law of supply and demand.
Incidentally, Junior’s cousin, the Speaker, has gotten into the act by making like James Bond and raiding warehouses with massive stocks of rice which were probably being withheld from the public until prices reach the maximum allowable before an angry public storms the Philippine Bastille AKA Malacanan Palace.
In fact, there is the solution right there. With the vast power at his manicured fingertips, Junior can go all out and raid all the warehouses keeping the rice from the public.
Their owners are nothing less than economic saboteurs, and must not be let off with a slap on the wrist. If anything, the kitchen sink must be hurled at them. Figuratively, of course, not literally. I do not espouse violence against these evil traders but they should be made to suffer where it hurts them most – their pockets. Or their fat bank accounts.
The stashed rice should be distributed at all possible outlets, including those impossible to find Kadiwa stores. These stocks can be sold at well below SRP, with the proceeds used to purchase buffer stocks for next year.
The absentee Agri secretary and well-travelled president needs to take more drastic steps in order to arrest what is agreed to be a potential food crisis that will have serious consequences for his regime. But unless and until he acknowledges that the country’s food supply is in deep doodoo, he and his family will most certainly regret that he even entertained the possibility that he can be an effective president. Then will he regret applying all means fair and foul to win the presidency despite being handicapped by his lack of understanding of the vagaries of economics.
Thus far, he has been getting barely passing grades as president and as Agri secretary. When he starts getting failing marks from the people, he should prepare for an emergency exit from the presidential palace at the snap of a finger.
At least he already has the experience of leaving the country in the dead of night with his tail between his legs. Perhaps the Honolulu mansion he shared with his family after their inglorious exit all those years ago is still available.
Ever hear of Baby Doc Duvalier, bro? Brush up on your history books and know that his experience will be shared by you if you do not shape up. Very incidentally, Baby Doc is from Haiti, the global seat of voodoo.