Go Lean…Caribbean

Go Lean Commentary

“Count on the Greedy to be Greedy” – Book: Go Lean…Caribbean Page 26

When policies are put in place that allow greedy people – bad actors – to continue unabated, bad things happen … to the bad actors and to society in general. This reality is something that stewards of every society must contend with. Every community is required to implement public safety provisions – at great expense. But the lesson is undisputed: whatever law enforcement costs, pales in comparison to lawlessness.

This actuality applies all the more so to economic crimes and misdeeds; this was definitely true with all the economic crimes leading up to the Great Recession of 2008 – lost of net worth estimated at $11 Trillion. And yet, the US is throwing out much of the wisdom gleaned after 2008. There is the trend now to undo a lot of the reforms that were implemented after the Financial Crisis – to de-fang the Dodd-Frank regulations. This is unwise! The regulations that were imposed are designed to mitigate the risk of subsequent economic meltdowns.

History does repeat itself.

Before the Great Recession of 2007 – 2009, there was the Great Depression of 1929 – 1933. A lot of lessons were learned in its aftermath and new regulations instituted; these protected the American economy – from Bad Actors – for more than 60 years. One regulation was Glass-Steagall. The Go Lean book relates this summary:

It is now 10 years after the peak day of the 2008 Financial Crisis. We all now have an expanded vocabulary with phrases like “Too Big to Fail”. This theory in economics – that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system ^[1] – transcends to other aspects of society, like government. The contention is that “Too Big to Fail” institutions must be supported by the people – their government – when these institutions face potential failure. Otherwise, things go from bad to worse.

For the Great Recession of 2008, the Caribbean did experience the “worse”.

Even now, many of our economies are still recovering. (Many aspects of modern life is still reeling – see Appendix A).

This is because our primary economic driver is tourism; and the primary source of Caribbean tourists had been the countries at the epicenter of the Financial Crisis (North America and Western Europe).

This commentary completes the series relating the Lessons Learned from 2008.  This entry – 4 of 4 from the movement behind the book Go Lean … Caribbean – is in consideration of the post-2008 recovery and reconciliation since that Financial Crisis. Our parasitic condition was exposed during this crisis; we now want to do better, and be better.

The commentaries in the series are cataloged as follows:

1. Lessons Learned from 2008 – The Long View – ENCORE
2. Lessons Learned from 2008 – Too Big to Fail –vs- Too Small to Thrive
3. Lessons Learned from 2008 – Righting The Wrong – ENCORE
4. Lessons Learned from 2008 – Still Recovering

All of these commentaries relate to “how” the stewards for a new Caribbean can shepherd the economic engines of the region to apply the economic best-practices to finally make progress, think: diversification. The book quotes the convenient timing:

A crisis is a terrible thing to waste – Page 8

The book Go Lean…Caribbean serves as a roadmap to implement the technocratic Caribbean Union Trade Federation (CU) and aligning institutions, like the Caribbean Central Bank (CCB). These are designed to provide better economic stewardship, to ensure that failures of the past do not re-occur. There is the need for a regional sentinel (watch dog and attack dog); we do not want to just sound the alarm; we also want to effect change by employing strategies, tactics and implementations.

This is an example of a Watch Dog, the group FocusEconomics – see Appendix B VIDEO; they monitor the economic activity in the Latin America & Caribbean region and report to their clients accordingly. This is their summary of the full Caribbean region:

Strong fixed investment and spillovers from the expansion in the U.S. economy.

FocusEconomics do not rate each of the 30 Caribbean member-states, just a select few. This group of professional economists recognize that the Caribbean region has been burdened with repercussions from the Great Recession, and declare that only now is the recovery starting to take hold. See here, a sample of their projections for 2018 and beyond:

Considering these assessments, there is no doubt about the Caribbean’s economic disposition: we are parasites of the US economy, not protégés. Our primary activity for our service based economy is tourism – catering to North American snowbirds; those escaping harsh winters during the peak months. Their leisure is our business; our business is their leisure.

The prime directive of the CU/CCB roadmap is to optimize the economic engines of the region to elevate the economies from the parasite status to starting the journey to become protégés. This need was pronounced early in the Go Lean book, in the opening Declaration of Interdependence – (Page 13) – with these statements:

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.   Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the CU and of the member-states.

The Go Lean book – available to download for free – provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society. We never want to be in such a vulnerable position again, as we were in 2008, and the years thereafter. We must have technocratic oversight of the systems of commerce so that we can finally enjoy some diversification. This is perhaps the biggest-best lesson to glean from the 2008 crisis. But there are more lessons too; in fact, there is an advocacy in the book that relates specifically to lessons from that crisis. Consider the specific summaries, excerpts and headlines from the book on Page 136 entitled:

10 Lessons Learned from 2008

2008 was a giant mess for the US. We want to learn and apply lessons from their experiences. But truthfully, we have no power there. We have no vote and no voice to change them. We can only protect ourselves from their abusive activities; (the abuse to the American-self and the interconnected world). The bad trend of America stripping the new financial protections has begun – already after less than 10 years. This has been addressed in prior Go Lean commentaries; see a sample here:

So if we cannot change America, all we can do to prepare for the worst. We must first diversify our economy away from America First; we must no longer be parasites. The related subjects of rebooting the Caribbean economy – starting first by diversifying away from tourism – has been a frequent topic for Go Lean blog-commentaries; see a sample here:

This is the quest of the Go Lean/CU roadmap, to reboot the societal engines of the region, the member-states individually and the region as a whole – in a Single Market. The roadmap details these 3 prime directives:

• Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
• Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
• Improve Caribbean governance to support these engines.

This is the quest for the Caribbean region, it is not unrealistic. It is conceivable, believable and achievable. Now is the time to lean-in to this roadmap for the CU. This is how we can make the the Caribbean homeland a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.

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Appendix A – Opinion: We’re Measuring the Economy All Wrong
Sub-title: The official statistics say that the financial crisis is behind us. It’s not.
By: David Leonhardt

Ten years after the collapse of Lehman Brothers, the official economic statistics — the ones that fill news stories, television shows and presidential tweets — say that the American economy is fully recovered.

The unemployment rate is lower than it was before the financial crisis began. The stock market has soared. The total combined output of the American economy, also known as gross domestic product, has risen 20 percent since Lehman collapsed. The crisis is over.

But, of course, it isn’t over. The financial crisis remains the most influential event of the 21st century. It left millions of people — many of whom were already anxious about the economy — feeling much more anxious, if not downright angry. Their frustration has helped create a threat to Western liberal democracy that would have been hard to imagine a decade ago. Far-right political parties are on the rise across Europe, and Britain is leaving the European Union. The United States elected a racist reality-television star who has thrown the presidency into chaos.

Look around, and you can see the lingering effects of the financial crisis just about everywhere — everywhere, that is, except in the most commonly cited economic statistics. So who are you going to believe: those statistics, or your own eyes?

Over the course of history, financial crises — and the long downturns that follow — have reordered American society in all sorts of ways. One of those ways happens to involve the statistics that the government collects. Crises have often highlighted the need for new measures of human well-being.

The unemployment rate was invented in the 1870s in response to concerns about mass joblessness after the Panic of 1873. The government’s measure of national output, now called G.D.P., began during the Great Depression. Senator Robert La Follette, the progressive hero from Wisconsin, introduced the resolution that later led to the measurement of G.D.P., and the great economist Simon Kuznets, later a Nobel laureate, oversaw the first version.

Almost a century later, it is time for a new set of statistics. It’s time for measures that do a better job of capturing the realities of modern American life.

As a technical matter, the current batch of official numbers are perfectly accurate. They also describe some real and important aspects of the American economy. The trouble is that a handful of statistics dominate the public conversation about the economy despite the fact that they provide a misleading portrait of people’s lives. Even worse, the statistics have become more misleading over time.

The main reason is inequality. A small, affluent segment of the population receives a large and growing share of the economy’s bounty. It was true before Lehman Brothers collapsed on Sept. 15, 2008, and it has become even more so since. As a result, statistics that sound as if they describe the broad American economy — like G.D.P. and the Dow Jones industrial average — end up mostly describing the experiences of the affluent.

The stock market, for example, has completely recovered from the financial crisis, and then some. Stocks are now worth almost 60 percent more than when the crisis began in 2007, according to a inflation-adjusted measure from Moody’s Analytics. But wealthy households own the bulk of stocks. Most Americans are much more dependent on their houses. That’s why the net worth of the median household is still about 20 percent lower than it was in early 2007. When television commentators drone on about the Dow, they’re not talking about a good measure of most people’s wealth.

The unemployment rate has also become less meaningful than it once was. In recent decades, the number of idle working-age adults has surged. They are not working, not looking for work, not going to school and not taking care of children. Many of them would like to work, but they can’t find a decent-paying job and have given up looking. They are not counted in the official unemployment rate.

All the while, the federal government and much of the news media continue to act as if the same economic measures that made sense decades ago still make sense today. Habit comes before accuracy.

Fortunately, there is a nascent movement to change that. A team of academic economists — Gabriel Zucman, Emmanuel Saez and Thomas Piketty (the best-selling author on inequality) — has begun publishing a version of G.D.P. that separates out the share of national income flowing to rich, middle class and poor. For now, its data is published with a lag; the most recent available year is 2014. But the work is starting to receive attention from other academics and policy experts.

In the Senate, two Democratic senators, including Chuck Schumer, the party leader, have introduced a bill that would direct the federal government to publish a version of the same data series. Heather Boushey, who runs the Washington Center for Equitable Growth, told me that it could be the most important change in economic data collection in decades.

Source: New York Times – Posted September 15, 2018; retrieved September 20, 2018 from: https://www.nytimes.com/2018/09/14/opinion/columnists/great-recession-economy-gdp.html

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Appendix B VIDEO – About FocusEconomics – https://youtu.be/L2Ys5GH_tmw

Published on Aug 2, 2018 – FocusEconomics is a leading provider of economic analysis and forecasts for 127 countries in Africa, Asia, Europe and the Americas, as well as price forecasts for 30 key commodities. The company is supported by an extensive global network of analysts.

Since its launch in 1999, FocusEconomics has established a solid reputation as a reliable source for timely and accurate business intelligence among Clients from a variety of industries, including the world’s major financial institutions, multinational companies and government agencies.

Source: Retrieved September 19, 2018 from: https://www.focus-economics.com/about-us