Gordon Robinson | Work and produce

Three Sundays ago ( Production is key to Growth) I dispelled the illusion of Jamaica’s GDP stats and explained why we need production transformation.

Two weeks later, PM Holness went off on a rant about low productivity which he blamed on Government Bureaucracy. In 50 years it’s the closest any politician has come to frankly discussing Jamaica’s biggest economic problem. But his Muskian solution: “…we are going to destroy that. We are going to break down that wall of unnecessary bureaucracy” is misconceived, inappropriate and risks handing another gift to Big Business by clearing a path to unregulated profit.

Yes our bureaucracy often stands in the way of increased production BUT our fundamental production issue isn’t bureaucracy. It’s that we’ve lived beyond our means for 50 years. To support that bloated lifestyle we substituted imports for manufacturing and agriculture; sold our assets; and went into debt. Foreign countries like China produced what we didn’t; bought our assets; and loaned us money to further their imperial ambitions. By these weak-minded, short-sighted tactics we enjoyed relatively lower consumer prices/interest rates, and higher stock prices.

We bought into an illusion of economic growth.

The entire fiasco reminds me of one of Haemorrhoid’s Shaggy Dog Tales. Returning readers remember lazy Articled Clerk Ernest H. Flower, the perennial domino spectator who earned his colourful nickname from his middle initial plus regular complaints of “piles and piles” of files on his desk.

Haemorrhoid finally lost patience with the Dunce’s sing-song answer to every complaint about his poor play ( “If a macca mek it jook yu!”). He launched one of his long and winding stories to teach the Dunce to produce not pretend.

“A large multi-national corporation’s American and Japanese branch offices decided to engage in a competitive boat race. Both teams practiced hard and long to reach peak performance.

On the big day the Japanese team won by a mile. Afterward, the American team was discouraged by the loss. Morale sagged. Management decided the reason for the crushing defeat had to be found so hired a consulting firm to investigate the problem and recommend corrective action.

The consultant’s finding: The Japanese team had eight people rowing and one person steering; the American team had one person rowing and eight people steering. After a year of study and millions spent analyzing the problem, the firm concluded too many people were steering and not enough were rowing on the American team.

So, as the following year’s race day neared, the American team’s management structure was completely reorganized. The new structure: four steering managers, three area steering managers and a new performance review system for the person rowing to provide work incentive.

This time the Japanese won by two miles. Humiliated, the American office laid-off the rower for poor performance and gave the managers a bonus for discovering the problem.”

Jamaica’s problem isn’t so much bureaucracy operates for itself (which it generally does) but that Big Business operates to benefit owners/senior executives. Production, especially for export, is incidental. That mindset comes from experience. Importers of Jamaican products live in competitive markets while Jamaican consumers are easy pickings. As captive contributors of passive income for Big Business, they can’t resist Big Business’s “take-it-or-leave-it” option.

This three-card trick has been habitually played on Jamaicans resulting in an economic health mirage. Jamaica became a paper economy. Now Trump’s carefully crafted fantasy that foreigners are robbing Americans blind is his excuse for three-card trick tariffs that’ll ensure consumer prices and interest rates soar everywhere. Paper economies will crumble. Jamaica will no longer be able to live beyond its means. Jamaica’s fourteen year debt reduction journey should ensure Trump’s tariffs’ adverse effect won’t be devastating. Still, Jamaica will be forced to stop overspending; start saving; roll up its sleeves; return to work. If we don’t, Trump tariffs will ensure our already untenable trade deficit balloons; sky-high inflation; stock market collapse.

As iconic Willie Nelson wrote and recorded:

Turn out the lights;

The party’s over.

They say that all

good things must end

There. Is. Only. One. Solution!

Stop trading in paper; reduce imports; increase exports. In other words work and produce.

Governments can help by reducing bureaucracy. However, fundamentally, any effective plan must include tax policy that encourages creation and growth of small manufacturing/export businesses. Governments must pivot tax policy towards milking Big Business who can afford to be milked while giving Small Business a pass as incentive to become medium to big so back-end milking can begin. Meanwhile Government can collect taxes from small business’s contribution to increased employment.

Gutting Government bureaucracy until no safeguards remain only helps Big Business exploit local consumers. Playing musical money chairs locally while trade deficits widen transfers wealth from poor Jamaicans to rich Jamaicans. It cannot result in economic growth.

Peace and Love.

Gordon Robinson is an attorney-at-law. Send feedback to columns@gleanerjm.com