Article: Sleeping with the enemy
MMJ 20230701
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SLEEPING WITH THE ENEMY
We hear the Proposal by the Minister of Economy how to cater for inflation. One he says is to find 1000 acres that belongs to the Govt namely Federal Ministries or State Govts to be farmed by B40 farmers, with infrastructure assistance by the Federal Govt, and a grant of RM20,000 max per annum for these farmers. The next phase will be dealing with farming or agriculture companies on fairly similar terms. Secondly is to deal with the wages and income of the poor people to ensure, as he says, for the first time in federal govt history, a concern for the people’s income instead of just the prices of food they consume.
We laud these as honest and sincere efforts by the govt to address cost of living issues of the people although we insist this is a just a trickle in the ocean of problems.
We wish to direct the government to the elephant in the room which they can’t see and seems well hidden by the system. If we are truly serious in our efforts to bring benefits to the rakyat we must be willing to hear from all sides, and not be prejudiced that advice can only come from certain sections; other sectors are to be comprehensively ignored.
If we are unwilling to consider opinions from other than the usual suspects, then we might be in danger of sleeping with the enemy. Honest to goodness people who believe they are doing good for the people but in reality, destroying the fabric of society.
A nation must practice the best system for itself be it monetary or education system. Why does not this nation ever question the legacy systems that it inherits from the British. Who introduced the monetary system to us, the one that we are practicing today. Is it as innocent as it appears to be?
The Minister talks about fighting inflation but the Minister does not address the existence of a group of institutions that keeps pumping money into the system that keeps the amount of money at any one time consistently higher than the level of goods and services thus ensuring the permanence of inflation. Banks create new numbers money when they give out loans or financing. These loans/money should be focused to the real sector to create jobs and economic output but the nation’s money creators prefer to give 65% of loans to personal loans, credit cards and generally the personal sector as if almost to ensure inflation must never be solved by the govt.
The Minister talks of his concern for the income of the working people, which is a welcome concern by any standards but the Minister consistently ignores the pleas of the monetary reformists in the country. Monetary Reformists consistently say the govt must not ignore the employers’ market syndrome in the country!
There are too many people looking for too few jobs! Too few jobs are being created by default of the monetary system we practiced. And please throw the full employment statistics in the bin because these are full employment of underpaid and underemployed people! How many people just accept any job at miserly wages just to put food on the table? How many graduates in the regions hide degrees just to get any job? How many school leavers can really survive on the wages they are paid? What we want is full employment of decently paid citizens! That is true full employment!
The SME sector, which is defined as companies with sales of RM50 million and below, contributes 40% -60% of GDP and creates 70% of the nation’s job. And yet our banking systems ignores them and provides only 16% of total loans to them.
This the Minister must note denies the creation of jobs in the nation. Our Graduates are hugely unemployed; our school leavers earn pittance, and their mum and dad are struggling with their wages.
Why? Because there are too many people chasing too few jobs – an employers’ market! The Minister might want to ask the Central bankers why they allow this anomaly to afflict the nation? The Minister also might want to ask why at all costs the banking industry is always protected to be wealthy at the expense of the nation? Last year they earn RM44 billion profits per annum at
a time when other players in the economy are suffering. The Minister will soon learn friends are people who wants the best for the nation
As for the usual advisors the govt turns to let's just share our previous post on the issue below.
Economists
In the world of Economists banks are neutral players in the Economy. They lend from deposits placed by bank customers. If there are no deposits banks cannot lend. Who are the true money creators in the nation is glossed over unaddressed. They believe that is irrelevant to the economy. For Investments to happen the nation must Save. Investments will only materialise when there is enough Savings. Investments are quite independent of banks. To the Economists banks can be ignored totally in government policy making because they are neutral; just a mover of funds from surplus units to deficient units. Never a money creator.
The fact that banks are havoc money creators in all economies is not computed into a nation's economic policy making by Economists. Money is paper notes and coins. How many percent is that of the nation’s total money is never discussed. If banks as money creators is never discussed by Economists, there will hardly ever be occasion to discuss to where banks point that money to and its effects. Let alone where banks point that money to leads to general inflation, housing inflation, widening poverty gap, unemployed youths and graduates, frozen starting salaries, and stunted economic growth compared to potential that could strengthen the country’s exchange rate.
Money creation and money systems are quite divorced from the ups and downs in the economy. The unending inflation in nations year on year is never discussed by Economists and hardly associated with a faulty money system. That is the responsibility of Central bankers who deals with nice people from an Institution called Bank of International Settlements in Basel Switzerland. Who is behind the people in Basel is also never questioned. Why would you want to question the origin of nice people? The fact that Basel was the birth place of the World’s Zionist Organisation is pure coincidence and the fact that the first Board of Directors of the Bank of International Settlements include two former Governors of Bank of Israel is totally irrelevant and does not point to anything.
Economists can quote names like Keynes, Adam Smith, Ricardo, and theories like Classical, Keynesian, Laissez Faire - they are therefore very clever people. They do not need to learn new things people have learnt about the Monetary System. They have a long tradition of Economics teaching and learning from Harvard and Oxbridge. The international NGO called Reform Economics and the University Students in Netherlands and other countries protesting and demanding their Economics Lecturers to stop teaching them the wrong Economics is a just an aberration that can be safely ignored. And after all Economists have interest rates as a policy tool to solve everything, bar the kitchen sink.
How do you deal with inflation? Increase the interest rate. How do you help poor people in a Covid economy? Lower interest rate. How do you improve exchange rates? Increase interest rate. How do you remove youth and graduates' unemployment? Lower interest rate. How do you deal with house inflation? Increase interest rate. How do you address widening poverty gaps? Lower interest rate.
There are Economists in the World Bank, the IMF and there is an Economics dept in every major bank. So how could they be wrong? The World Bank and the IMF are some of the nicest institutions in the world. And banks make huge profit for themselves every year, and no Economists have complained about banks. The nation’s problem of general inflation, house inflation, unemployment of youths and graduates, frozen starting salaries, widening poverty gaps thus cannot have anything to do with banks or the monetary systems otherwise the clever Economists will be at the forefront protesting about them.
Economists understand all the issues that may befall the economy of a nation and they have the interest rate to solve everything. They are therefore natural advisors to the government.
Well done Mr Minister, very honest and sincere effort we say, but sadly clearly not enough. You seriously need a change of advisors.
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Dikemaskini [Updated]: Sam Ahmad 20230701