Awareness

“Problems cannot be solved at the same level of awareness that created them.” This ripe riff is attributed to legendary brainiac Albert Einstein, and if ever a phrase applied to the CNMI economy, this is it.

Indeed, while some men of a few generations ago were splitting atoms, we’ve still got jokers who can’t figure out in this day and age that Japan is still a better market for Saipan tourism than Russia, Norway, or Alabama are. Other jokers, as they concoct their lame, home-made theories on economics, are telling us that the woes of the garment industry will magically bring lower prices to Saipan, as our lines of shipping wither into atrophy, thus losing the virtues of economies of scale for the supply-side of the economy.

Gee, I see prices of consumer goods going up, not down. How about you?

But let’s get real; today’s problems won’t be recognized as a genuine crisis until (a) the government misses a payday, which may or may not happen, and (b) CUC turns the lights out, which very well may happen. And then what? Well, the chief threat to the economy isn’t the crash, it’s already happening in slow-motion, but at least it’s orderly and predictable, a hard landing in soft sand.

No, the chief, long-term threat to the CNMI economy will be the lousy policies that are reflexively enacted in a panic, and rooted in the same clueless stupor that created most of our problems to begin with.

Which means that after things get worse…they might get, well…worse. The “solution” to digging a hole may very well be to give new shovels to them that dug it in the first place.

Some folks in the business sector are spooked by the lack of general awareness and are looking for precedent. Well, you can find it in failed Latin American economies, I’m afraid to say, and I know that because I used to do a bit of business focused on some failed Latin American economies. A shrinking business sector means a lower tax base, which will inevitably mean lower tax receipts…then a populist cry for the government to do whatever it can to maintain its payroll…and you can see where that will lead: Higher taxes on businesses (you can count on that), resulting in an accelerated exodus of businesses…resulting in higher taxes…and there you go. In such places, the masses whine, “Where are the jobs?” and the only answer is “They don’t exist; you crashed your own economy, remember?”

No, they don’t remember. They never do. After all, their level of awareness has not changed. Not only can they not solve the problems, they don’t know what the problems really are. All they see are the symptoms of the problems once they hit home, but when economic abstraction finally comes home to roost in your refrigerator, you’re already screwed, pal.

People in such places live day to day trying to scrape by, and when that situation hits, there’s not much room to contemplate the quantitative abstractions of economic theory. Enough false hopes and promises usually circulate to appease the masses, though, and life goes on, one grinding day at a time. I’ve seen such places—lots of them. The Commonwealth doesn’t have to live that way, but if it chooses to live that way, nothing will stand in its way. So, put the pedal to the metal on the road to ruin, but remember one thing: It’s a one way street. Economics does not owe anyone, or promise anyone, redemption.

And I’ll tell you why: Because the failure to learn is the biggest economic sin of all. So if your brightest kid winds up working at a grim and hateful job instead of following his dreams in life, just tell him “Well, prices will go down soon, I read it in the paper…and better times are coming since we’ve found tourists from Venus (an untapped market with tremendous opportunity) and major, off-island investors (who are making very encouraging overtures) from Pluto.”

Yes, the same level of awareness can endure.

But the economy cannot.

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