Your columnist - Tea Party-accused leftist leaning adviser to Simpson Miller government

By Wilberne Persaud

Among the responses to last week's column on the failure of our indigenous financial services sector in mid-1996 and national debt as important policy backdrops, I highlight one.

Regretfully the correspondent anselm@windstream.net prefers to remain anonymous.

The email reads: "Your Gleaner article dated January 27 contains a lot of false information which makes me feel either you did not do your homework or it is a deliberate bias. I sincerely hope your [sic] not an advisor to the Simpson Miller government. You have no idea of how US politics and nor the Tea Party function and with your leftist leaning seems quick to misquote Greenspan."

Pity anselm's response is opinion backed by no fact-based argument. If as he or she claims, there is 'false information' why not specify?

Why not brief me with a smattering of how US politics and the Tea Party work. Help me defeat the ignorance you discern in the column.

As to misquoting Alan Greenspan, an October 2008 Time Magazine article refers to him thus: "The maestro admitted in - congressional hearing that he had 'made a mistake in presuming' that financial firms could regulate themselves".

The New York Times of October 23, 2008 reports: "... almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending. Greenspan admitted that 'Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief,' he told the House Committee on Oversight and Government Reform."

Meltdown

Do we see government as cause of the Wall Street meltdown here? No. The idea of government policy 'causing' a financial crisis should have found the scrapheap in the 1890s - yes. the 1890s. Last week, the Financial Gleaner thought this an error and changed it to 1990s. Actually we see from Greenspan's belated mea culpa an extreme laissez faire or ideological position, backed by big spending and lobbying to remove prudent regulation of financial firms. Firms previously enabling product innovation began innovation in questionable financial instruments that allowed huge paper profits. These 'profits' were then 'distributed' to CEOs and others who created the instruments. Monetary compensation rewarding reckless decisions and abandoned fiduciary responsibility caused system-wide bias towards ultimate failure.

As to the claim the column exhibits 'leftist leaning', if that refers to equity, prudence and the fact that the creator of the phrase 'the invisible hand' recognised that capitalism needs regulation and much sunlight for society to truly benefit, then 'anselm' is correct.

It is not widely known that Adam Smith, while coining the phrase 'the invisible hand', also decried the tendency of the capitalist, if allowed to collude in secret with competitors, to take decisions that cheat the consumer.

Greatest value

Smith described the individual producer intending by the industry [read or translate as: 'sensibly directed hard work and diligence'] of his efforts to pursue, "only his own security, and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, 'led by an invisible hand' to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it."

Extreme right wing neo-liberal orthodoxy presupposes primacy of a completely unregulated market. It attributes to Adam Smith the view that the 'market' is actually a sacrosanct invisible hand whereas all three occurrences of the term in Smith's work contain no such identity. Taken to its extreme, we get the view that Alan Greenspan finally regretted and hopefully abandoned: the 'mistake in presuming' that financial firms could regulate themselves. In Smith's Wealth of Nations, we also find his view that "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."

Global economy need

Herein lies the power of the 99 per cent 'Occupy Movement' in the USA providing societal or political backing for President Obama to seek more aggressively than he ever could, policies not only America but the entire global economy need. The 'Buffett Rule' he insists, is simple common sense, fairness. It is as important for deficit reduction as the Dodd-Frank bill on financial reform, weak though it is, is important for recovery from recession allergy.

Why 'anselm' hopes I'm 'not an adviser to the Simpson Miller government' I don't know. Is it merely the knee-jerk reaction of a die-hearted partisan? To answer, no, I am not. But why should advice to Simpson Miller be something negative, of regret? Fact is, for Jamaica's sake, Prime Minister Simpson Miller needs all the advice she can get.

Her mandate is strong. As a leader, she survived a baptism of fire from within and without, emerging unscathed but, using the diamond metaphor, tempered, polished and much the better for it. So-called ordinary Jamaicans, the 'lickle man dem' are not fools. They recognise what Adam Smith penned more than two centuries ago: "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable".

They discriminate between sincerity and deceit occasioned by the utterances and acts of their chosen leaders.

The PNP's fall from grace in 2007 was as much the result of this discerning value of ordinary people as efforts of the then Bruce Golding-led JLP. To translate genuine feeling for the people, taking Jamaica to growth and development with equity is going to be hard. Simpson Miller needs our support in return for which she must rigorously implement the open and honest governance she promised. She obviously learns quickly and this is good. Jamaica's recent political history provides not merely moments, but potent teachable episodes.

Wilberne Persaud is author of 'Jamaica Meltdown: Indigenous Financial Sector Crash 1996'. wilbe65@yahoo.com