COMMENTARY: Trump is producing for USA; who is for BVI?
Igwe
By Dickson Igwe, Contributor
There are lessons to be learned from a booming USA. The proceeding story is second of a series of narratives on Donald Trump’s business first, protectionist, economics.
The narrative juxtaposes the US economic model with that of the British Virgin Islands. Now, the two main political parties are arming for war in the British Virgin Islands.
General Elections are in a matter of months. To date the Virgin Islands Party is the party that has put out a definitive statement on its economic strategy. It has stated that it will pursue an economics that drives middle class prosperity. The middle class, those residents in the $30,000 to $60,000 income brackets for the Virgin Islands economic model, are the majority of the population.
A number of economists assert that middle class prosperity is the key driver of economic growth. Why: because this is the social grouping within which the majority of consumers exist. Consequently, when middle class spending accelerates, then so does the wider general economy.
The idea of growing the middle class is Keynesian. Keynes’s idea of bottom-up prosperity is the polar opposite of the Supply Sided idea of trickle down. Trickledown asserts that pursuing a business first model is best for the economy.
When Jack the wealthy businessman is placed at the pinnacle of the society and everything else made to revolve around Jack, then that is the best approach for economic growth.
Which party can pull BVI out of this hole?
OK. The most critical question voters must ask is which party and which politicians can pull the country out of a recession driven by natural disaster and a lack of vision: add decades of questionable, non transparent, unaccountable, and unaudited governance.
Without a clear vision of where the country is headed, politics becomes nothing more than a carnival followed by a 4 year interim of spending taxpayer cash without any plan, strategy, or good outcome.
This will hold terrible long-term consequences for a country that is in danger of being relegated to the status of permanent underdevelopment. OK. After 35 plus years of the Creative Destruction of Free Trading Economics, the Great Recession of 2008 reestablished John Maynard Keynes’s economics as a new economic renaissance.
Milton Friedman’s Rule of the world appeared to be coming to an end. Keynes today is making an effective comeback. Massive fiscal stimulus, and macroeconomic intervention, saved the day when the financial system went ”belly up” in 2008, after unsustainable leveraging threatened to plunge global financial markets into a black hole.
But, will unsustainable leveraging once again rear ahead, and lead the global economy back into to default and bankruptcy? Is a Post the Great Recession, second collapse in consumer and business confidence, in the cards as the US economy – the main engine of the global economy – heats up, with a second round of deregulation and tax cuts to powerful corporations?
What is next?
Trump is sticking with Milton Friedman’s Supply Sided Business First Economic Model. And there may be trouble ahead. The USS Enterprise, energized by Donald Trump’s business first economy has adopted a protectionist and aggressive stance towards markets of once friendly neighbors and allies. What is next? Will the US economy drop off the cliff as happened in 2008?
Will the western taxpayer once again intervene to save the world from downturn and chaos? Is the US economy vulnerable to economic recession driven by an unholy alliance of America First, trickle down, and supply-sided protectionism?
Boom and bust has been the narrative of the free trading, austere, economic model from the early 1980s. Boom and bust, leading to stock market crashes and political crises have been the order of the day. Thankfully, consumer credit in the US in 2018 is not a concern.
Credit in the present booming US economy is rising very slowly. This signals healthy economic and sustainable growth. It may well lead to a second Trump term if the US economy remains on fire. Strong economic growth that is not driven by credit signals a very productive economy.
Love him or hate him, Donald Trump is producing for the USA working man, whose employment matrix is the best it has been since the Bill Clinton Presidency. To be continued.
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President Obama passed an improving economy to President Trump at his 20 January 2017 inauguration. The strong economic run is continuing; the economy is approaching the crest of the business cycle. If interest rate and inflation stay relative low with consumers continue to spend and businesses expand, the economy probably will maintain its present positive economic posture. On the other hand, increasing demand for credit, along with increased consumer and business purchasing, will cause interest rate and inflation to increase, causing a slow down in the economy.
James Carville, former President Clinton advisor and political commentator, is credited with the following quote: It is the economy stupid. Historically, in the US if the economy is strong, Presidents normally get re-elected. A day is a long time in politics but two and one-half years is an eternity. However, if the economy is strong in November 2020, the US presidential election will be highly competitive.
Moreover, financial services and tourism are the twin pillars of the BVI economy. The BVI economy depends heavily on external investment. As such, a booming US economy is great for the BVI economy, especially tourism. A booming economy means US consumers have more discretionary income to spend; the largest number of BVI visitors come from North America, especially the US.
Has Dr.Igwe ever rendered any political credit to President Obama for rescuing the U.S. economy?
@Joe, to answer your question. No. Igwe was a supporter of Williard Mitt Romney, Obama opponent in 2012. He pulled back his public support after he was put on blast. Of course, he isn’t entitled to his political philosophy. Wonder what is his views on Prez Trump Sh..t hole comments about African countries.
I remember his pro-Romney stance.
I am so ashamed and tired of “successful Blacks” who, in order to be accepted by their “White bourgeois friends”…, often feel compelled to minimise, denigrate and even abandon their own kind: in order to assuage their inherent inferiority complex.
Really. Obama passed an improving economy.
Keep telling yourself that. It’s only one person you fooling and that’s you.
e leonard, I didn’t know u smoked that stuff?
Don’t credit Obama. The only positive influence he had was leaving office. I’m in a high end luxury niche business and my phone rang off the hook the day after Trump was elected. In 2017 I paid more in personal and corporate taxes than I ever had in over 30 years as people finally had a positive outlook on the future. It had nothing to do with Obama.
@Sorry Leonard, hate or support President Obama facts are facts. Did President Obama have a perfect presidency? No. No presidency does. There are various things he could have done or done differently. Nonetheless, here are the facts. At President Obama’s inauguration on 20 January 2009, the economy was tanking and hemorrhaging hundred of thousand of jobs monthly, the economy was in a recession, the auto industry was on the verge of collapse, millions of people lack health insurance……….etc. For example, in 2008, the economy lost 2.6M jobs, and unemployment was at 7.2%.
However, the American Recovery and Reinvestment Act (ARRA) (stimulus package) pored $831B into the economy. As a result, the stock market soared, the economy went losing jobs to gaining jobs, unemployment and under employment drop……….etc. Additionally, the government invested $80B to rescue a faltering auto industry, especially GM and Chrysler. Others were content to let the industry fail.
Further, some 15M people acquired much needed health insurance. With more support from the House and Senate, more economic progress could have been made. The bottom line is that President Obama must have done something right, for he was re-elected in 2012. Presidents do not get re-elected in a faltering economy.
A great commentary.
Here in the BVI, we should encourage a similar model of eliminating government waste and focus on supporting businesses at every level. Support means lowering the tax burden, eliminating employment restrictions to an absolute minimum, providing financial incentives for hiring locally and incentivizing growth. Businesses need to feel encouraged to grow their bottom line and want to add fulltime employees. They should not fear permitting delays and governmental red tape. With reconstruction opportunities all over our beautiful islands, employment should be on the rise as well as wages.
Normaly I hate Igwe, but the headlines on this say it all. Obama blamed Bush until he left office, he made bad deals and the REAL people voted in a REAL man, not another politician!