Wanted: Trickle up economic leaders

DIE HARD III

Herman Tiu Laurel

10/27/2008

The past 30 years were shaped by Thatcherism and Reaganomics; that is, Milton Friedman’s Chicago School of neo-liberal “free market” economics. It despised public regulation of business and promoted the free market as the best mechanism for pricing and production. It preached that greed is good. Friedman was awarded the Nobel Prize for Economics in 1976 and hailed by The Economist as the most “influential economist of the 20th Century.” In the past three weeks the great promises of global wealth and progress from Friedman’s neoliberals policies have all come crashing down, along with a number of his disciples like Alan Greenspan, and there are red faces in the Nobel Prize committee and The Economist.

A generation of Filipino economists joined the “free market” economics fans club, setting up hugely funded “think tanks” like the Center for Research Communications (CRC) and the Foundation for Economic Freedom (FEF), and universities like the Asian Institute of Management (AIM) and University of Asia and the Pacific (UAP) sang paeans to transnational and local oligarchic corporations and assured that “trickle down” benefits would go to.

In the few weeks since the Lehman Bros. collapse and last week’s latest stock market collapse, more and more voices are lambasting neo-liberalism as the cause of the global crisis. The Nobel Prize committee has atoned for its award to Friedman by awarding an advocate of state economic interventionism, Paul Krugman, the 2008 prize. It won’t be long before the local neoliberal “think tanks” become “stink tanks.” The neoliberal countries are still grasping for credibility by ostensibly taking steps to reform its system, like the G7 meeting billed as “Bretton Woods II” a la the 1944 one that set up the post-World War II world economic system.

In an eye-opening article, financial analyst and maverick Jim Wilson who correctly predicted the present crash, in his article “US dollar Death Dance” described the G7 “Bretton Woods II” as ludicrous since they are now the biggest debtor countries in the world. The real power now are the creditor countries like China and the Middle Eastern countries who are quietly waiting to be approached for help in saving the global financial system. The ASEM (Asia-europe Meeting) meeting in Beijing last week heard China’s call for greater “regulation” of the world financial system. Regulation is the anti-thesis of the neo-liberal economic credo. In other words, the world financial system should no longer issue blanks check for Western financial speculators and manipulators to prey on every nation.

The unexpected rise of the US dollar lately seemed to come tp a halt on the early demise of the US neo-liberal system. Jim Wilson said: “The US Dollar rally in the last several weeks has been remarkable. At closer examination, it highly resembles a spurt prior to death…. The “Top-down Approach” is destined to fail because the corruption, bond fraud, accounting fraud, financial instrument shell game, and other assorted illicit procedures are the cause of the problem, and all lie at the top of the structure intended to trickle down! To expect benefits downstream is lunacy.

On Oct. 5, 2007 Gloria Arroyo said in a speech that the “benefits of a growing economy (the Philippines) would trickle down to the Filipino people, especially the poor… the Philippines is now a very attractive investment in Asia” as she vowed to focus on ensuring that these economic gains would be sustained to benefit the Filipino people, especially the poor.” We’ve been bombarded with the benefits of “trickle down economics ” since Cory Aquino’s first year 22 years ago.

The only thing we have really seen trickling down our people are blood, sweat and tears from the growing hardship and poverty since neo-liberal and free market policies ruled after Edsa I.

In the on-going US presidential campaign discourses, Obama summed up the real issue in one speech that called for “trickle up economics.” If it weren’t for the fact that we’d never met or discussed the issue or ever read our columns, I would claim that he picked it up from us. We have advocated “trickle up economics” for years now, though I am sure I picked it up too from dialogs and readings. I have used the term to describe Thaksin Shinawatra’s economic program that granted $25,000.00 to every Thai village to produce what each produced best, and truth to tell Marcos had the same program when he gave billions in credit support to farmers in his Masagana 99 which neo-liberal economists like Solita Monsod and Ayala Ave. finance executives bitterly criticized.

Obama will change US for the better by “trickle up economics.”  China has done this since 1949, pouring all human and financial capital on physical infrastructure, achieving popular prosperity unprecedented in history. The Philippines desperately needs “trickle up economics” to reverse its nosedive to below 100 in the UN Human Development Index. Resources must skirt Malacañang, the Senate and Congress, department secretaries and business cronies, IMF-WB, and go directly to the people’s financial and infrastructure needs. Only new, honest, dedicated, revolutionary, especially non-trapo Filipino leadership can achieve this.

(Tune to Destiny Cable, Channel 3, Oct. 27, Tuesday 8:45 p.m. to 9:30 p.m. with our guest former National Treasurer Norma Lasala; to 1098AM, daily 8:30 a.m. to 9 a.m. and 6 p.m. to 7 p.m. M-W-F)

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