The Semper Gumby economy

I am filing a workman’s compensation claim against the Saipan Tribune for whiplash, and my crack team of medical experts is documenting the case now.

Item: Economist by the name of Stephens reads a column in the Thursday issue of the Saipan Tribune entitled “The sky is falling,” penned by the duo of Rik and Janel Villegas.

Item: While reading said column, economist nods his head in agreement so enthusiastically that his vertebrae overheat and liquify, causing an acute case of Gumby Neck Syndrome. This renders the economist fit only to drool and whimper constantly, a marked change from the fact that he used to only drool and whimper only 15 hours a day.

The workman’s comp case now hinges on those kuriput cheapskates at the Tribune, who have questioned the medical validity of my prescribed medicine and therapy. If San Miguel beer and the Goodbye Massage Parlor aren’t medicinal and therapeutic, then, well, what is?

But if you think Gumby Neck Syndrome is painful, you ain’t seen nothing yet. An economic storm is brewing on the eastern horizon. As the Villegas team correctly points out, the U.S. government is over $7.3 billion in hock, and that doesn’t include the state and local governments. I jump up and down and shriek in abject fear at these numbers from time to time, as you know, and this is why I’m totally pessimistic about the U.S. dollar, which I still insist must fall about 40 percent from its levels of, say, two years ago. Ask your boss to pay you in yen…or won…or, heck, coconuts.

This isn’t going to rock just the U.S., it’s going to rock the world, as the whole snarled web of financial entanglements will get torn asunder when the world’s investors sober up and realize that Uncle Sam ordered more at the banquet than he can ever hope to pay. Deficits are approaching the half a trillion dollar mark at the federal level. The voters keep voting themselves more money, but there is no money to cover the entitlements. The government faces about $40 trillion (a trillion is a million million) in eventual shortfalls. That’s on top of an economy that is built on top of $34 trillion or so in existing debt. Nobody has ever seen numbers like this, ever, in the history of the world. Not in the economics context.

The U.S. economy is in an unsustainable profile, and is going to snap into parity with the European economies that it now emulates. According to economist Richard Daughty, the public sector now accounts for fully 37 percent of the U.S. economy. That’s mighty European, all right, but to pay for it the sky is going to have to fall, and it will be a long way down for those who have been riding on a cloud.

If the Commonwealth was economically sophisticated, it would heed this fact, and contemplate how its unique economic and geographical situation could be used to dampen the effect of the inevitable economic tsunami. Heck, Hong Kong did well even though Britain sank into economic (and dental, from the looks of it) decay, so, if we apply this optimistic analogy, there is precedent in some ways for a far flung outpost to play its unique economic cards better than the main country has. The CNMI could, in theory, do this, but theory and reality are two different things. What a shame…all this potential…and we wind up playing the same unproductive games.

But the CNMI will come to learn that the west Pacific region will look completely different in 20 years, after the economic balance of power in the world has been rearranged like cheap mascara in a rain storm.

Speaking of mascara, my therapists have arrived, and it is time for my treatments. Ah, but you are not so lucky, so you are stuck pondering all your worldly problems with nary a comfort to console you. I have no wish to add to your worries, and there’s nothing you can do about the falling economic sky anyway. So just roll with the punches and remember the adage for economic survival: “Semper Gumby” (Always Flexible).

(Ed Stephens, Jr. is an economist and columnist for the Saipan Tribune. Ed4Saipan@yahoo.com)