Where will it all end, Mr Pilgrim et al?

We would like to get into the head of the General Secretary of the ruling Democratic Labour Party, George Pilgrim, to try to figure out what exactly was he thinking yesterday when he treated the printing of money as if it were merely an everyday pleasurable exercise. What was he trying to achieve when he flippantly dismissed those who warn of the dangers of such a practice?

Come to think of it, the printing of money to pay wages and finance Government programmes might indeed be an everyday exercise for this administration. But it is more difficult to figure out how it could possibly end up being pleasurable for the country, based on the advice of most of the best economists we have.

We say most because yesterday Dr Don Marshall said “most of the commentators who have been speaking about the deleterious impact that printing of money can have, actually overstated the argument about it putting pressure on the currency peg”.

We would like to get into his head as well, to try to find out what it is that he knows that other economists, including the now fired Central Bank Governor Dr DeLisle Worrell, do not know? Why is it that everyone but him is marching out of step?

Right now it is Mr Pilgrim who must rationalize meaningfully, what the DLP is trying to do to fix the moribund economy, and why he felt the need to diminish the potential impact of something as serious as the seemingly endless printing of money.

Mr Pilgrim told reporters at a press conference at the DLP headquarters the policy was necessary in order to make up the shortfall in reduced revenues so public officers could be paid. His reasoning?

“Corporation taxes declined mainly from the offshore sector since 2009 by $200 million per year, transfers are up by only $50 million over the period we were in office [nine years]. Commercial banks are not buying Government paper, which helps create the shortfall, hence the Central Bank picks up the slack, hence printing of money.”

This defies analysis and cannot possibly be routed in time.

What the leading party official needed to announce to Barbadians were concrete and workable measures to bring the intake from corporate taxes up again; and to create confidence among the commercial banks so they feel assured enough to buy Government paper again.

But Mr Pilgrim was not finished. He argued that money was being printed to ensure this country’s “fabric” and its people were secured, while insisting that Government has bills to pay.

“Salaries and wages of public servants translate to families and homes surviving in this society and why should this party apologize for keeping public servants in jobs,” the general secretary added.

Again, this defies analysis.

But we have questions. How long does Mr Pilgrim suggest the printing of money should continue? How much more must be printed? Where will Government stop? Will it ever stop? Can it stop now that it is now so deep into the printer?

It has been over a year now since the administration has been telling us that the economy is turning the corner, that the homegrown austerity measures were working, that all would be well.

But the environment around the never ending corner is stifling, the home has lost its foundation and the medicine feels a lot like venom without an antidote, as the administration struggles to establish any credible reputation for economic competence.

But don’t tell Mr Pilgrim or top DLP officials, including those who must face the electorate whenever Prime Minister Freundel Stuart decides to ring the bell.

They go about describing those who complain as peddlers of doom and pushers of fear; they speak confidently of winning a third term on the shoulders of long promised projects such as the Hyatt and Wyndham hotels and they ignore the warnings from those in the know, such as former Prime Minister Owen Arthur and their own Dr David Estwick, who has been telling the administration since 2014 that the printing of money was not sustainable.

There was also Dr Worrell, who was fired today at the end of a tumultuous few days, which included a public row with Minister of Finance Chris Sinckler.

After seemingly being a willing complyer all these years, Dr Worrell warned last month the printing of money had to stop because it placed the Barbados dollar at risk of devaluation.

This put him at odds with Mr Sinckler and would have contributed to his firing.

Why, then, must this administration continue the practice? Virtually every economist, and business leader, has said decisive action is needed and that whatever measures are taken will be painful.

Heaven knows we have suffered enough economic pain over the past eight years or so and we cannot be sure how much more Barbadians can bear.

However, the DLP Government must come up with a credible programme to reduce the deficit, bring down its debt, shore up the foreign reserves and get the engine of growth working again.

It may already be too late to save the administration, but Government cannot pretend that the printing of money is not a problem. And it certainly cannot believe it won’t be a problem politically. Failure is likely to be costly. To think otherwise is to leave us wondering what is in their heads.

13 Responses to Where will it all end, Mr Pilgrim et al?

  1. Lilian Lloyd
    Lilian Lloyd February 24, 2017 at 10:58 pm

    GEORGE PLEASE STAND UP

    Reply
    • Ali Baba
      Ali Baba February 24, 2017 at 11:54 pm

      LILIAN THEY ARE THE CHILDREN OF BELIAL

      Reply
  2. Dwayne Jack
    Dwayne Jack February 24, 2017 at 11:15 pm

    Exactly..

    Reply
  3. Zeus February 24, 2017 at 11:21 pm

    Now that you have wondered what is in their heads can you tell me what is yours as it relates to bringing down the debt and improving the foreign exchange…. We want solutions

    Reply
    • hcalndre February 25, 2017 at 11:32 pm

      @Zeus, who are you asking for solutions? They`re “16” that got elected somehow to do just that, what are they being paid big dollars to do? you and the DLP clones are asking john public for help now that the ship is going down and the captain seem to jump ship.

      Reply
  4. Sunshine Sunny Shine February 25, 2017 at 5:35 am

    A real political puppet whom if you put a brain with commonsense into his head he would still behave like braying jackazz. Let the intelligent idiots continue to print money. Everything that has a beginning has an ending.

    Reply
  5. sticks and stones February 25, 2017 at 8:04 am

    Back seat economist come a dime a dozen find them in every nook and cranny .Prior to 2008 the world was told by leading global international economist that the fiscal models used by democracy were sound and proficient , however we all saw and witness the failures of these models which led to a global meltdown

    Reply
  6. Carson C Cadogan February 25, 2017 at 11:42 am

    What are the dangers of printing money Kaymar, in an economy which is not operating at full capacity?

    Tell us and dont quote Mia, Jeremy Stephens, Ryan Straughn or anyone else in the Barbados Labour Party.

    Reply
  7. Carson C Cadogan February 25, 2017 at 11:46 am

    Printing money doesn’t always cause inflation. In a recession, with periods of deflation, it is possible to increase the money supply without causing inflation.

    Reply
  8. Tony Webster February 25, 2017 at 1:42 pm

    @Carson, will you be man enough, to post a mea culpa, in the fullness of time, as the exposed bones of a once-proud, once-industrious country lie exposed for all to see, and no amount of tired excuses, and useless, repeated, promises serve no purpose whatsoever?

    For God’s sake, man….continual printing of money, in an open economy such as ours, (and with a non-dealt currency pegged to the dollar). without the essential backing of adequate foreign reserves, is a train wreck in slow-motion. Witness the mess known as Zimbabwe, or closer to home, Venezuela, or you cud take a peek here: https://en.m.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic

    Reply
    • Carson C Cadogan February 25, 2017 at 2:45 pm

      You have no idea what you are talking about.

      The central Banks of Japan, the European Union, The Federal Reserve print money print money to this day shore the economies of their respective territories.

      are they all in danger of collapse?

      Reply
  9. Carson C Cadogan February 25, 2017 at 7:55 pm

    From Wikileaks:

    MOTTLEYNOMICS – THE RETURN OF THE STATE?
    Date:2006 June 16, 20:45 (Friday) Canonical ID:06BRIDGETOWN1057_a
    Original Classification:CONFIDENTIAL Current Classification:CONFIDENTIAL
    Handling Restrictions– Not Assigned —
    Character Count:6156
    Executive Order:– Not Assigned — Locator:TEXT ONLINE
    TAGS:BB – Barbados | ECON – Economic Affairs–Economic Conditions, Trends and Potential | EFIN – Economic Affairs–Financial and Monetary Affairs | EIND – Economic Affairs–Commerce, Industry and Industrial Products; Industry and Manufacturing | PGOV – Political Affairs–Government; Internal Governmental Affairs | PINR – Political Affairs–Intelligence | XL – Caribbean

    “5. (SBU) As Ministers tend to do when attending conferences
    in Barbados, Mottley entered the conference room, gave her
    speech, and left immediately. Subsequent presenters
    indirectly rebutted her assertions by focusing on the need
    for private investment and for the country to produce what it
    has a competitive advantage in producing. Michael Howard, a
    professor at the University of the West Indies, made the most
    direct criticism of Mottleynomics. Arguing that furniture
    and garments are the “way of the past,” he stated that
    Barbados could not compete with Trinidad in manufacturing.
    Howard’s remark drew titters of knowing laughter from the
    assembled audience of business leaders.

    ——-
    Comment
    ——-

    6. (C) Mottley was a relatively competent if disorganized
    Attorney General, but she seems truly out of place as
    Minister of Economic Development. Lacking experience and
    training in business and economics, Mottley has refused to
    consult with business leaders in Barbados and has apparently
    embraced discredited statist import substitution policies.
    The obvious divergence in approach between the Deputy Prime
    Minister/Minister of Economic Development and her mentor, PM
    Arthur, may signal a divide in the BLP over economic policy.
    Because it seems highly improbable that Mottley can persuade
    the PM, a forward-leaning economist, to support GOB
    investment in the furniture and garment industries, her
    backward-looking proposal is likely to be short-lived.
    KRAMER”

    No wonder the Barbados Labour Party keeps focusing on Money printing, they have nothing of substance to offer Bajans. Especially Mia. A woman with “backward looking proposals”.

    Reply
    • Jennifer February 25, 2017 at 8:22 pm

      CCC – you are a real die hard, sitting on them eggs.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *