The economy once more

Our 6th grade social studies textbook says that the way people use resources to meet their needs is called the economy. The way a political unit produces and uses goods and services is called an economic system.

At 6th grade level, economic decisions are based on what “I want.” Thus, the restrictions on students of carbonated sugar and caffeinated beverages, to mention a few, is not determined by the consumer’s choice but as a restriction by a school nutritionist. Consumption is determined by decree, and merrily subverted by ingenious smuggling into the classroom.

Elevating the same picture into Community College 101 level, understanding economics within the social process that includes politics and culture, would expand into the trilogy of resource—natural, human and technological, production—instruments, forces and systems, and distribution—property claims, exchange mechanisms, and consumption plans. A balanced process of eco-friendly resource utilization, efficient production of goods and services, and equitable distribution of benefits, is an ideal model.

The ‘80s brought supply-side economics, the notion that if you produce it, it will be consumed. We have since learned that the consumer can be cajoled to want something, anything, even in the absence of a vague notion that a commodity is needed. Current marketing trends seem to validate that.

The need for deliberate economic development intensified post-WWII. The reconstruction of Europe through the Marshall Plan resulted in the World Bank. The rehabilitation of Japan and devastated Asia resulted in the capital asset sharing through the Asian Development Bank. The strengthening of the newly formed independent nations of former colonies in Africa formed the Organization of African States. The ‘70s recognized the need for human development, shifting efforts from separate focus on transportation, education, nutrition, public works, agriculture, housing, etc. to community development that included empowering social institutions and facilitating broad citizens’ involvement. The former is the capitalists’ forte, the latter, the socialists’ agenda.

The newer point of view sees development not only as a matter of increasing capital stocks through resource development and efficient production, but also focuses on patterns of behavior, mental images, organizational skills, appropriate technology, and local self-reliance. Development then becomes something that a community does to itself rather than something that is done to it by others. The dichotomy between trickle-down economics of capital investments and the greenhouse bubble up school of economics as-if-people-mattered vies for political prominence.

Gov. Juan N. Babauta says, the “economy (is) still pretty darn good.” Some political pundits and those who are politically across the aisle responded with allusions to the emperor needing to be told that he has no clothes, to the imputation that the chief executive is “inconsistent” on one end of a spectrum, to lying on the other end. This is an election year. Divisiveness and variance of perspectives representing the extremes are to be expected. Public manners is ignored, civility sidelined and acrimony more severe. Each side accuses others of employing spinmeisters. Uh, Duh!

University of Toronto alumni and SAR (HK) government official appointee George Leung, also HSBC’s chief economist, and presumably, privy to the reasons why HSBC pulled out of the CNMI, is the Saipan Chamber of Commerce’s featured speaker today during its monthly meeting at the Hyatt Regency. It might shed light to the massive exodus of Japanese investments recently reported by Frank Rosario elsewhere.

The discerning among the elite Kagman homesteaders, Papago residents, and Ridgeline homebuilders might want to pay attention to what Mr. Leung has to say. There might not be much news unless he opines that the CNMI targets its strategies to align itself to direction of the booming China Circle (mainland, Hong Kong, and Taiwan) economies. But even then, this might prove significant only to those who hold investment portfolios, hardly to the one eking out an existence on a paycheck-to-paycheck basis, or the emergent self-employed within the labor force.

There’s a Koblerville man with a wheel borrow and bags of aluminum cans who passes by my apartment regularly on his way to selling his goods to a recycling center. My altruism almost got me to offer my pickup for his regular trip until I was told that the man of oriental ethnicity is the father of a Mom and Pop storeowner. He does this for personal sense of significance before it is an income-generating activity. Not bad.

I was delighted to see an enterprising woman talk to neighborhood mamas along As Lito Road if she could harvest their mangoes instead of letting it waste by allowing it just to drop off when ripe or when pecked by birds. There is promise among mango tree owners who have since started wrapping their fruits with paper to protect it from bugs and birds. Ditto for guava and other fruit growers. Tinian watermelon at 30¢ per pound is consumer heaven. Someone overproduced from last year’s level. The plant exhibits at the last AgriFair revealed that variety of marketable food items can be produced well on island. There is no shortage of food items that can be raised here. That is the good news. The bad news is that not many have seen growing food as a profitable venture when it can be bought at a lower price in Oakland, California. That may not hold true for long as freight rates rise.

My informal inventory of construction materials in our hardware stores indicates over abundance of supply. The wisdom in the coconut Internet is that low-cost housing is in demand for the displaced garment factory workers who are planning on not being repatriated anytime soon. Also, the new storefront buildings cropping up all over the island is either the product of wishful thinking, or someone knows something that most of us have missed. Or, are banking on the governor’s assessment and have put their money where their support is.

In any case, Gov. Babauta’s “Economy still pretty darn good” assessment is not all together inaccurate if one were to see the whole picture from the CC 101 level of the economic process, rather than the 6th grade level of immediate wants. My unscientific headcount shows that four out of 10 voting residents agree with the governor, two disagree, and four prefer not to reveal their opinions. In an election year when there are four vying candidates, odds of four out of 10 in favor of an incumbent is not to be easily dismissed.

For as long as we view the economy as what others do to us, the outlook would be bleak for many. When we begin to see the economic process as “my purview,” a domain of choice rather than of chance, and do something about it, even something as simple as gathering aluminum tin cans for recycling for economic gain, then, indeed, the economy is still pretty darn good!