“The Dead Flame”: reflections for the weekend

Here is a video that encapsulates it all: the precise instant that Romanian dictator Nicolai Ceausescu lost control of his people.

The title of my entry is taken from the title of one of my favorite chapters in one of my favorite books,“Shah of Shahs” (Ryszard Kapuscinski).

And this is my favorite passage from that chapter, a useful reflection as we look back to 1986 and 2001, and ponder what we want to happen in the days, weeks, months, years to come:

Revolution must be distinguished from revolt, coup d’etat, palace takeover. A coup or a palace takeover may be planned, but a revolution -never. Its outbreak, the hour of that outbreak, takes everyone, even those who have been striving for it, unawares. They stand amazed at the spontaneity that appears suddenly and destroys everything in its path. It demolishes so ruthlessly that in the end it may annihilate the ideals that called it into being.

It is a mistaken assumption that nations wronged by history (and they are in the majority) live with the constant thought of revolution, that they see it as the simplest solution. Every revolution is a drama, and humanity instinctively avoids dramatic situations. Even if we find ourselves in such a situation we look feverishly for a way out, we seek calm and, most often, the commonplace. This is why revolutions never last long. They are a last resort, and if people turn to revolution it is only because long experience has taught them there is no other solution. All other attempts, all other means have failed.* Every revolution is preceded by a state of general exhaustion and takes place against a backdrop of unleashed aggressiveness. Authority cannot put up with a nation that gets on its nerves; the nation cannot tolerate an authority an authority it has come to hate. Authority has squandered all its credibility and has empty hands, the nation has lost the final scrap of patience and makes a fist. A climate of tension and increasing oppressiveness prevails. We start to fall into a psychosis of terror. The discharge is coming. We feel it.

As for the technique of the struggle, history knows two kinds of revolution. The first is revolution by assault, the second revolution by siege. All the future fortune, the success, of a revolution by assault is decided by the reach of the first blow. Strike and seize as much ground as possible! This is important because such a revolution, while the most violent, is also the most superficial. The adversary has been defeated, but in retreating he has preserved a part of his forces. He will counter-attack and force the victor to withdraw. Thus, the more far-reaching the first blow, the greater the area that can be saved in spite of later concessions. In a revolution by assault, the first phase is the most radical. The subsequent phases are a slow but incessant withdrawal to the point at which the two sides, the rebelling and the rebelled-against, reach the final compromise. A revolution by siege is different; here the first strike is usually weak and we can hardly surmise that it forebodes a cataclysm. But events soon gather speed and become dramatic. More and more people take part. The walls behind which authority has been sheltering crack and then burst. The success of a revolution by siege depends on the determination of the rebels, on their will power and endurance. One more day! One more push! In the end, the gates yield, the crowd breaks in and celebrates its triumph.

It is authority that provokes revolution. Certainly, it does not do so consciously. Yet its style of life and way of ruling finally become a provocation. This occurs when a feeling of impunity takes root among the elite: We are allowed anything, we can do anything. This is a delusion, but it rests on a certain rational foundation. For a while, it does indeed look as if they can do whatever they want. Scandal after scandal and illegality after illegality go unpunished. The people remain silent, patient, wary. They are afraid and do not yet feel their own strength. At the same time, they keep a detailed account of the wrongs, which at one particular moment are to be added up. The choice of that moment is the greatest riddle known to history. Why did it happen on that day, and not on another? Why did this event, and not some other, bring it about? After all, the government was indulging in even worse excesses only yesterday, and there was no reaction at all. “What have I done?” asks the ruler, at a loss. “What has possessed them all of a sudden?” This is what he has done: He has abused the patience of the people. But where is the limit of that patience? How can it be defined? If the answer can be determined at all, it will be different in each case. The only certain thing is that rulers who know that such a limit exists and know how to respect it can count on holding power for a long time. But there are few such rulers.

So was 1986 a Revolution by Siege and 2001 a Revolution by Assault? And the fate of the President lies in her hands, not in those of her critics. Something to ponder. I’ll give you a couple of concrete examples of what I mean.

In the case of Manuel Gaite, his wife has, understandably (and even justifiably) enough pleaded for fairness because of the public criticisms of her husband’s behavior. But we ought to consider how much of the outrageous arrows of fortune now sticking out of her husband, is due to those who have accepted Jun Lozada’s statesments as Gospel truth, and how much are due to Gaite’s own statetements -and that of the Palace. Gaite’s defense is a simple one: he is a good soldier, but a foot soldier may be the first to fall, as Fr. Joaquin Bernas points out in Shielding the President; and a soldier, even if good, fighting to what end? As History Unfolding points out, an official may fight well but not for worthy goals. Even the good soldier defense, as Torn & Frayed pointed out, insults the intelligence.

For this reason and many others (he surely had a hand in drafting some of the most noxious executive issuances of our time), while I sympathize with Mrs. Gaite and I think Gaite himself tries to be a good person, I am unsympathetic to where this has all led him.

In his testimony before the Senate, and indeed, on the basis of the administration officials who testified, one thing they didn’t shirk was that they tried to prevent Lozada from appearing before the Senate. Gaite admitted the Palace’s objective was to facilitate Lozada’s leaving the country until the Senate could wrap up the ZTE hearings. A recent Inquirer summed it up as a confession of conspiracy. What the administration tried to dodge was the allegation of abduction.

Another, and related, example is this: Lozada passport turned over to court. I’ve heard it said that when the passport was produced, the faces of the lawyers from the Solicitor-General’s office fell. The whole problem with the passport, apparently, was that a stamp showing Lozada had gone through immigration upon his arrival would have demolished the claim of an abduction. The problem was, no lower-level person from the Bureau of Immigration wanted to be a party to order to stamp the passport: it would have required a lower-level bureaucrat to stake his name and reputation on saying he’d stamped the passport when Lozada arrived, when no immigration official did. This implies that these bureaucrats didn’t think it was worth their while to take the heat for their bosses -and the surrendering of the passport to the court by a lower-level security person is a similar refusal to further take the heat for the bosses.

Let me refer, once more, to my Thursday column, Minimum and maximum, which tries to distinguish between two courts: of public opinion and of the law. Each has their proper place and they are not, much as the Palace insists, mutually exclusive: but each has its proper place and both are being actively resorted to (most recently: Lozada files kidnap, murder raps vs Razon, Atienza, et al ). Last Tuesday on my show my lawyer guest pointed out that Lozada’s testimony before the Senate is significant, in that it can be used to impeach him in court cases; therefore his assertions can actually fortify or weaken cases related to him or to officials in the courts.

Meanwhile let me state for the record that whatever my own preferences may be, I do not think a consensus for People Power exists, yet; or that there is even a widespread demand for the President’s resignation, yet: because there is no consensus on what should come afterwards. I find it heartening that people from all sides are making efforts to encourage arriving at a consensus.

But I do think three things have happened: first, more people are open to either option, and second, that the President faces a significant erosion in the constituency she fairly successfully claimed to represent from 2001 to the present: big business, the entrepreneurial class, include the Filipino-Chinese merchant class, professionals, and the provinces, and the majority of the hierarchy of the Catholic Church. Why this has taken place, now, is best clarified by Manuel Buencamino in his column, Everyone has a limit.

At the Mass in La Salle Greenhills on Sunday, I saw a classmate and good friend of Mike Arroyo. I teased him, took his picture with my cell phone, and told him, “I’m going to ‘MMS’ this photo to your friends Mike and Gloria.” He replied, “I already waved my middle finger at them when I passed the security cameras at the gate.”
I saw a nun from the Assumption College, Gloria Arroyo’s alma mater and bastion of support. My daughter commented, “Look, dad, there’s a lonely Assumption nun. Are they breaking ranks?”
I laughed and texted Manuel Quezon III about the apparition and he texted back, “She is not alone.”
Everyone has his limits. I suppose that’s what Gloria’s bishops meant when they said there is some good in everyone, including unrepentant liars, bribers, cheaters, plunderers, kidnappers and murderers.

Third, even among those still unprepared to consider resignation or People Power, there is also a growing number of people who have reached the conclusion that the President does not intend to step down in 2010, but they are still digesting the implications of this realization.

As Amando Doronila points out in Mounting outrage, little momentum :

Although there are signs of increasing public outrage over the NBN scandal, a higher state of outrage is needed to send huge numbers of people to the streets. The military is watching the size of the crowd before it makes a move either to remain loyal to the commander in chief or withdraw support, like it did in 2001, when the general staff dumped Estrada.

And yet, as Mon Casiple suggests,

Malacañang is scrambling for the initiative. Mobilization by friendly LGU units are being planned, sprinkled by a few pro-GMA NGOs and church personalities. A media offensive has been launched — against Lozada, JDV, the opposition, and even against Vice-President Noli de Castro. The de Castro media attack seeks to prevent a possible de Castro defection that can fundamentally undermine GMA’s chances of survival.

And so, for betting men, the Asia Sentinel (in Philippines + Scandal = Life Goes On , which resembles Doronila’s views) is right in saying the advantage remains with the administration. For some, the old arguments still hold water, as shown by A Simple Life. See also …got my life back….

But if it is unable to turn the tide before Holy Week, then what? Let’s return to Mon Casiple:

If it is not able to regain the initiative in the coming days, then the momentum for people power may not be denied and a GMA resignation will be the only outcome, either to preempt people power or as a consequence of one. The key institutions to watch are the Catholic church, big business, military, the Cabinet, and the ruling coalition. All these are watching closely the rise of the people’s movement and are making their decisions on an hour-by-hour basis.

The political crisis may be resolved in a matter of days or weeks; failure to do so will create a sustained and debilitating crisis for the rest of the year.

Ricky Carandang pretty much sees the same challenge facing the administration: having created problems for itself, how does it turn the tables on its critics? In a suitably short period of time, too. See what reporter Jove Francisco has to say, too, about the way old strategies don’t work as effectively, anymore. See pine for pine for another example. But blog@AWB Holdings doesn’t think that trotting out the President’s Assumption friends really helps.

There is only so much we can do. But of the things we can do -consulting with people, fostering consensus, but also, recognizing our own limits and what we will do if those limits are going to be crossed by possible events- let’s do them.

There is another broad consensus that I think exists: that the problems are deep, and yes, systemic, and this means once we take a step in a particular direction, we have to ask ourselves if we are prepared to live with events unfolding to their logical conclusion. Which, of course, includes the risk of unintended consequences, too.


Let me close with another illuminating passage from the same chapter from the same book I quoted at the beginning of this entry:

The Shah’s reflex was typical of all despots: Strike first and suppress, then think it over: What next? First, display muscle, make a show of strength, and later perhaps demonstrate you also have a brain. Despotic authority attaches great importance to being considered strong, and much less to bering admired for its wisdom. Besides, what does wisdom mean to a despot? It means skill in the use of power. The wise despot know when and how to strike. This continual display of power is necessary because, at root, any dictatorship appeals to the lowest instincts of the governed: fear, aggressiveness towards one’s neighbors, bootlicking. Terror most effectively excites such instincts, and fear of strength is the wellspring of terror.

A despot believes that man is an abject creature. Abject people fill his court and populate his environment. A terrorized society will behave like an unthinking, submissive mob for a long time. Feeding it is enough to make it obey. Provided with amusements, it’s happy. The rather small arsenal of political tricks has not changed in millennia. Thus, we have all the amateurs in politics, all the ones convinced they would know how to govern if only they had the authority. Yet surprising things can also happen. Here is a well-fed and well-entertained crowd that stops obeying. It begins to demand something more than entertainment. It wants freedom, it demands justice. The despot is stunned. He doesn’t know how to see a man in all his fullness and glory. In the end such a man threatens dictatorship, he is its enemy. So it gathers its strength and destroys him.

Although dictatorship despises the people, it takes pains to win its recognition. In spite of being lawless -or rather, because it is lawless- it strives for the appearance of legality. On this point it is exceedingly touchy, morbidly oversensitive. Moreover, it suffers from a feeling (however deeply hidden) of inferiority. So it spares no pains to demonstrate to itself and others the popular approval it enjoys. Even if this support is a mere charade, it feels satisfying. So what if it’s only an appearance? The world of dictatorship is full of appearances…

…The most difficult thing to do while living in a palace is to imagine a different life -for instance, your own life, but outside of and minus the palace. Toward the end, the ruler finds people willing to help him out. Many lives, regrettably, can be lost at such moments. The problem of honor in politics. Take de Gaulle -a man of honor. He lost a referendum, tidied up his desk, and left the palace, never to return. He wanted to govern only under the condition that the majority accept him. The moment the majority refused him their trust, he left. But how many are like him? The others will cry, but they won’t move; they’ll torment the nation, but they won’t budge. Thrown out one door, they sneak in through another; kicked down the stairs, they begin to crawl back up. They will excuse themselves, bow and scrape, lie and simper, provided they can stay -or provided they can return. They will hold out their hands -Look, no blood on them. But the very fact of having to show those hands covers them with the deepest shame. They will turn their pockets inside out -Look, there’s not much there. But the very fact of exposing their pockets -how humiliating! The Shah, when he left the palace, was crying. At the airport he was crying again. Later he explained in interviews how much money he had, and that it was less than people thought.

This passage suggests many things; among them, the solid logic behind Atty. Raul Pangalanan’s arguments against The arguments for inaction.

And how’s this for action: First Gentleman leaves for Hong Kong–airport sources: Lawyer clueless but says not evading NBN probes.

Yesterday I texted some people I know outside Manila what they think, re: Lozada. Responses:


hati rin kmi d2, sa ofc (provl gov’t) we biliv some facts bt questns are many like dat of what he dnt tel snce it s a big questn y now lg xa went out to d open… Protectn 2 life yes, but we cnt say 100% we biliv him…

Also from Bacolod:

They all believe him. But they are also disgusted with his investigators. Nobody I know trust that the Opposition want change -they just want their turn. The big change is they all hate GMA now but no tipping point. [The politicians are] discombobulated. They don’t know how to read the situation now. Even Bacolod’s notorious GMA lapdog Monico Puentevella who has managed to be close to all Presidents since Cory has signed a resolution against GMA which means He’s also paving the way for the next power “just in case.”

A student journalist at La Salle Bacolod:

Do u believe in Jun Lozada’s statements? 1000 Lasallian students. [survey results] 73% YES. 9% NO. 18% undecided.

From Naga City:

Save for some ppld identified wid Dato Arroyo phoning in radio programs, public sentiment is overwhelmingly wid Jun Lozada by a mile. Metro Naga chamber of commerce broke ranks wid PCCI and issued a statement supporting Lozada. Ateneo de Naga and Univ Sta. Isabel leading regl signature campaigning asking GMA to step down./ Ders a big protest event slated tom. da prolonged rains -for more than a wk now- notwithstanding

From Cebu City:

I think most people from Cebu are indifferent when comes to politics. But people do consider him credible. As a business person, most policies of the present administration are skewed towards favored businessmen. Regulatory Capture of Government Agencies is so obvious. Get rid all the nasty people hostaging the president. She’s good but helpless.

Also from a Cebu City friend currently traveling:

Met up w/friend (f. 32, married, filchi, alabang) n BKK, she says ppl back home don’t care anymore -the’ll see see what comes.My sister (f.41.single) joked “Who’s he” but says she was in NAIA with him the other night. Before I left Cebu, my thought my thought was: is this guy for real? is he honest? we all sort of presume that BigBoy is also BadBoy but really do we want yet another popular uprising? I suppose the general sentiment is… there’s a lack of it. people are getting apathetic again -at least marcos babies like us.

From Davao City:

So far, people believe him and his testimony… Pero as far as suportng anodr edsa, dats anodr story. I belv they wud want 2 w8 4 2010. No ppl powr dis tym… Prblm s corrupt s so widespread that ppl hv bcm cncal on d mattr… Evn d senators ond way or odr s nvolvd.

South Cotabato, according to the Davao City texter,

N so cotab2, d sentiment s mor ntense re anti gma coz its a known opositn area.

In Manila, a student from UST has this to say:

Still lookng 4 a concrete thing to do besides rally. Mabe if we start pressuring congressmen to support impeachment now. Itll giv anyone intrsted somthng to do.

Many of dem talk re hs crdblty n hw d whol plan 2 covr up only incrsd prcption dat he’s saying d truth, bt many r also dsenchantd w/ d hrings. F u ask me, d real ish brot abt b d series of NBN probes is being muddld by focus n prsonalties (lozada’s crdbtly, neri’s conscience, abalos’ guilt, gma’s involvmnt). Mnwyl, no 1. evn d opp s movng fast 2 fx d dysfnctional govt procurmnt 2 prvnt such deals frm hpening agn. Dat’s y ppol get tyrd of it ol n tune out

Congres or any poltcian is always undr d comand of pblic presure. Bt pols cnt feel that presure, bec media coverge is muddld, ppol just tune out. F media focuses n d real issues, ppol wil spil on d streets nt (jst) to chnge govt bt to presure it to initiate chnges. When ths starts n media covrs frm an ishus prspctv, a virtuous cycle wil begin, more powrful thn any powr brker. That kind of media advocacy hs bn sucesful in Africa, Europ n evn in US.

D real ishus r d dysfunctions in govt, thos dat Neri hs bn lamentng in hs polecon lectures. No one wants cheatng, bt no one is pushng… for elections effciency. No wnts coruption, bt no one is pushng to chnge d govt procurnmnt systm. no one is keeping govt audts in check (unles they cn use it for poltcal blakmail). D ishus r nt poverty. Povrty s an efect of our systemic problems, w/c is y that shud be our focus, nt ppol. Bec whoevr sits in gov’t r accidntal to do problem. Corruption cn always prospr in a systm left unchckd.

And from a lawyer:

Funny u shld ask, I was discusing it wid an ofcmate ystrdy, he said at first he was riveted by d whole thing but lately wid d idiots in d legislature grandstanding (galit lang dawbec dey werent in on it) he has gotten tired and tuned it out. Sad, and maybe dats d point of dis admin, 2 make pipol so sick as 2 turn apathetic as a way 2 cope.

And I.T. person:

Most people i talk to believe him, they see no ulterior motive for what he is doing.

As for the blogosphere, yugatech on how wiretapping’s getting cheaper; missingpoints on comparing Lozada to Singson. Bayan ni Kabayan on trying to understand Joker Arroyo. The Venom Speaks suggests we all make a self-check first.

Update, 2 am Saturday: noise barrages have caught the imagination of students! Check out video in Life’s precious moments don’t have value, unless they are shared. , and photos in *dawnskee* and rheavargas and I’m becoming tired… , as well as descriptions in spread YOUR wings and catch ME as i fall 🙂 and Fly and forever dance and Me, Myself, and I… and des’ Site and the ME behind the I and “my crazy little place is just around the corner”

And more statements, first from the UP Law Faculty and Students and then:

To a fellow economist and former colleague, Gloria Macapagal-Arroyo statement from economists of the Ateneo de Manila University

We are outraged by the revelations made by Engr. Rodolfo Noel Lozada Jr. at the Philippine Senate Blue Ribbon hearings last 8 February 2008 about the overpriced Zhong Xing Telecommunication Equipment Company-National Broadband Network (ZTE-NBN) project. The project has no clear public rationale in the first place. We are dismayed by the revelations of Mr. Lozada that former Commission on Election Chairman Benjamin Abalos Sr., with the alleged involvement of First Gentleman Jose Miguel Arroyo, ordered the inclusion in the proposed project a large amount of kickbacks, amounting to as much as 130 million US dollars (or more than 5.2 billion pesos), enough money to remove the yearly public school classroom backlog, or purchase 5.8 million sacks of NFA rice, or alternatively secure the basic needs of about 29,000 poor families for a year. Simply put, a lot is being sacrificed for the greed of the few.

We are angered by the continuing attempt to cover up the anomalous circumstances surrounding the project, including the supposed kidnapping of Mr. Lozada to keep him from testifying in the Senate. We demand that government remove the cloak of Executive Order 464 and the invocation of executive privilege to allow public officials that have knowledge on the transaction to publicly testify on the circumstances of the deal. We demand the National Economic and Development Authority (NEDA) to release records of the meetings that allowed the contract to be processed. Because of the nature of the work of the NEDA in national economic planning to promote national development and public welfare (and not for private or individual interests), these minutes are public records. We want Secretary Romulo Neri, an Ateneo high school alumnus and supposed staunch advocate of reforms to eradicate transactional politics and oligarchic dominance in the country, to reveal all that he knows about the matter. Efficiency and equity demand no less.

We abhor the habit of this administration of forging secret deals and engaging in non-transparent processes in developing and contracting large infrastructure projects, especially foreign donor-funded programs, contrary to the tenets of good governance. We call on friends and colleagues in the government, especially the alumni of our university, and other sectors to help ferret out the truth about other alleged irregular deals entered into by corrupt public officials, including the fertilizer scam, the Technical Education and Skills Development Authority book scam and the North Rail project.

We urge our fellow economist, alumna, and former Ateneo colleague, Gloria Macapagal-Arroyo, to fully explain and account for all the anomalies under her administration to prevent our country from plunging into another political and economic crisis. Indeed, we are dismayed that Mrs. Arroyo has not exercised the vast powers and resources available to the Presidency to ensure that large-scale corruption in the government is not only blocked but also punished, and that these irregularities have only increased political instability and uncertainty in the country. We are also offended that the Presidency has instead utilized these vast powers and resources to turn its back from servicing the public and contribute to the advancement of private greed, including the Machiavellian buying of congressmen, governors, and everybody else that get its way. And sadly, these abuses have eroded the meaning and legitimacy of the Presidency. If she fails to fully account and explain the anomalies and corrupt practices in her administration, the most honorable thing she can do is to resign from the Presidency.

Finally, we publicly pledge to heed the Catholic Bishops’ call to communal action by supporting the activities that would promote transparency, accountability, and good governance, and we call on our fellow social scientists and academics to support this advocacy. We pledge to make our voices heard by committing to various ways of peaceful and non-violent political mobilization.

— Signatures —

Fernando T. Aldaba
Cristina M. Bautista
Germelino M. Bautista
Edsel L. Beja, Jr.
Diana U. del Rosario
Luis F. Dumlao
Cielito F. Habito
Leonardo A. Lanzona
Joseph Anthony Y. Lim
Romelia I. Neri
Ellen H. Palanca
Malou A. Perez
Joselito T. Sescon
Tara Sia-Go
Patrick Gerard C. Simon-King
Rosalina P. Tan
Philip Arnold P. Tuaño

Manuel L. Quezon III.

357 thoughts on ““The Dead Flame”: reflections for the weekend

  1. From such a brilliant person saying that ccmpetetiveness is the wrong point of focus and instead productivity.
    And one is to business and one is to economics.

    Is it not, that microeconomics focususes on the operation of a component of the national economy?
    Isn’t business a component of national economy through individual firms.

    granting that the macroeconimic indicators are the one’s we look at;they can not indicate anything without the individual businesses.

    Please, correct me if wrong.

    Now on collective guilt.That is how we look at things , th us treated arabs terribly since 911;it is just a damn whole blame game at its highest form.We have it here the ubusan ng lahi,kahit sa mga kaaway sa politika,away sa lupa etc,although based on what I saw above in the wikioedia’s definition it sounded more complex than what I mentioned.Collective guilt advocacy is really dangerous,but it is sort of human nature na ata eh.

    Ang tagal mawala stigma, a few years ago I saw japanese tourists crying at a war museum at singapore having a different form of collective guilt,naguilty sila eh..
    also di ba me pinatay na Madrigal na napagkamalang Hapon sa China in protest of Koizumi’s presence there?

  2. Whatever action we Filipinos decide to take eventually I hope we do it soon but we also need to be rational with our decision.
    Inasmuch as I would like to go out and shout GLORIA RESIGN along with the patriots, I am limited to the usual excuses of meetings, travels, reports, and basically OFW issues.
    Although I have always clarified my stand, sometimes when you try to get more involved, the line gets blurred-especially when you have friends in both sides of the line. On the one hand, everything is clear, the enemy is defined – Gloria and her corrupt minions (short term), patronage politics and corruption (long term). But on the other end, there are also real soldiers, PNP officers that staunchly believe in defending the constitution and the chain of command. I know that most of these officers are not corrupt at all, but firmly believe that they are doing their duty and will spill their blood for it. What if Gloria sticks it out, and the outrage has reached critical mass? Devil’s scary “Bastille” scenario would mean bloodshed on both sides. Then again, have you ever seen men (or women) injured by bullets, bolos, knives, metal pipes, or blunt heavy objects? Its not a pretty sight more so if you knew the victims. I have no appetite for violence and bloodshed when it means Filipino against Filipino, brother against brother, its meaningless in the end.
    I’m not saying NO to PEOPLE POWER, but we must also measure the cost. Its not the lost of investments, or downfall of the economy, or destruction of our institutions I’m worried about but the LOSS OF HUMAN LIVES, meaningful or not.
    I as well as many like me can only do so much, to reassure friends of moral support and restraint from being judgmental.
    Moments like these force people to go down on their knees and pray – yes even those who lost their religions like me, I hope that God will still listen…

  3. karl garcia,

    Re competition, or competitiveness and where the focus should be – productivity. I really can’t say with much confidence how economics should be, as I’m not an economist. Being a foot soldier in sales and marketing, we just look at the bottomline, “did we make money or not?” But I’m still interested in how economics fits in the whole picture or whether a thorough knowledge of it will help me do a better job? Is it worth taking a post graduate course in it?

  4. Ramrod, my guess is that it won’t help much in your job in sales and marketing. In my discussions with Anthony Scalia and Silent Waters, both businessmen, they have proven that one can be a successful in business without knowing much economics.

    Where it would help though (at your age which is close to mine) is to be more conscious of your underlying economic philosophy that you follow. I also find it useful in detecting BS from the current government and in determining whether what hvrds, devilsadvc8, Brianb and the others here (and in other forums) make sense.

  5. To Karl Garcia:

    This is my position on collective guilt.

    But firstly, here is why, to me, one has to be clear with the starting premise. A correct starting position may not make the work of making progress (e.g. justice, correcting existing iniquities) any easier, but a correct starting position makes it harder to make grievous mistakes.

    It is easier to unleash the power of the State (or of a mob) onto the grandchildren of the grandchildren of a wrongful if you believe in collective guilt. Forget the oligarchy — think about this “… the Jews under whose hands Jesus Christ died!!!” and you where collective guilt can unleash religious bloody warfare. It is easier to unleash war-to-annihilation against the MILF for SuperFerry14 if you believe in collective guilt.

    Look again at cvj’s posts and you may notice that cvj flows effortlessly into seeking atonement from any and all progenies of the Roxas and Aquino bloodline. “..absolved only when they are all destitute”, cvj says. This concept called rule of law actually says one should not do that — judge guilty the grandchildren of the wrongful. “Collective guilt is true” and “innocent until proven guilty” call the other a liar.

    So are today’s Japanese “not guilty” for World War II? I don’t believe in collective guilt, so the Japanese roommate I had several years ago did not owe me then, and does not owe me now a single yen. BUT this same Japanese — in particular the Japanese government of yesterday, today, and tomorrow — owes the world for World War II. The Japanese government (and all governments, come to think of it) owes the world the preservation of the truth. This to me means that China in particular, has a right to denounce Japan should Japan modify their elementary- and high-school textbooks in a manner that belittles the damage done by Japan during World War II.

    “Collective guilt is true” and “innocent until proven guilty” consistently call the other a liar.

  6. cvj,
    Thanks. For a moment there I felt inadequate.
    I watched Jose Almonte being interviewed lat night by Eddie Villanueva, he had an interesting definition of Oligarchs, unfortunately I couldn’t remember how he phrased it exactly but it goes beyond “Old Rich” families. I’m trying to look for material in the internet.

  7. Collective guilt is condemnatory in practice. It IS NOT the year-2000 American tourist feeling sick to his stomach after viewing the Hiroshima damage, muttering “I feel appalled at what we Americans have done!” It IS the year-2000 Tagalog spitting on the face of a Muslim-beggar near Plaza Miranda for SuperFerry 14 as the Tagalog mutters “… You are worthless scum for what you have done!!!”. It is condemning Erap’s grandchildren and their children after that for being who they are.

  8. “Indeed, the Philippine political economy has long favored the interests of major families at the expense of national developmental objectives. Although the roots of their socioeconomic power can be traced to the development of landed elites in the 19th century, it was in the American colonial period that major families emerged as a national oligarchy, able to dominate the country’s political and administrative apparatus and shape it to their own ends. Even as new entrants have continually expanded the ranks of this oligarchy– and familial economic interests have diversified considerably throughout the postwar years (beyond primarily agriculture to include commerce, manufacturing, services, and finance)–the business success and failure of family conglomerates has depended to a large extent on gaining favorable access to political power. When so dominated by the elite, mainstream politics becomes a particularistic scramble for the spoils in which ideological differences and coherent interest-based political groupings rarely play a major role. In combating these patterns of privilege, the Ramos reformers declared their determination to “level the playing field” and promote a process of development beneficial to the nation as a whole.

    Perhaps the boldest initiative of the Ramos administration has been its attacks on the “cartels and monopolies” of major oligarchic family firms that have long had a stranglehold over key segments of the national economy. The first target, a moribund and inefficient telecommunications industry, has been transformed by new competition and now serves as the model for the reform of other sectors.” –
    Paul D. Hutchcroft
    November 1996


  9. UP n student,
    Would you be willing to forgive the descendant of the man who was responsible for raping your great grandmother in front of your great grandfather causing his suicide later on and resulted to the loss of his business, property, and dignity? Will you be able to forgive him when you are now a beggar when you see him an arrogant affluent bastard bullying you?
    Purely hypothetical of course, but would you?

  10. A very Asian trait that is counterproductive and downright moronic: Hiya or “Saving Face”

    “She (GMA) said she could not immediately call it off because it would put the Philippines and China in an embarrassing situation.”

    – What could be more embarrassing than not to have acted quickly on a dodgy deal????

  11. ramrod: There are people who can forgive and there people who can not forgive.

    Now ace did send this;

    2 Kings 14:6
    … The fathers shall not be put to death for the children, nor the children be put to death for the fathers; but every man shall be put to death for his own sin.

    But your question is easier to answer. It is understandable to be hateful against an arrogant bullying bastard.

  12. UPn, collective guilt is just a corollary of national pride. For example, if the Americans are able to take credit for liberating Europe in World War 2, then they ought to accept the blame for decimating the Native American population.

    You cannot put ‘collective guilt‘ in opposition to ‘innocent against proven guilty‘ because the judgment of guilt is something that is rendered after careful deliberation, although unlike offenses committed by individuals, such deliberation is usually done outside the court of law. Anyway, if you’re worried about judgment without thinking, then what you should focus on is racism and other forms of prejudice.

    Where we agree on is in rejecting collective punishment as well as opposing racism and other forms of prejudice.

    Ramrod, thanks for that. While the Ramos administration was right in identifying the pathological nature of the oligarchy (something the Marxists and, of course Marcos, have already identified long ago btw), it made the mistake of emphasizing a solution that involved attacking the “cartels and monopolies” and “level the playing field”. As hvrds described above, in the more successful economies, there is an element of “coddling the oligarchy“.

  13. And ramrod: If you are faced with a very rich arrogant bastard bully who seeks payback because he believes your great grandfather raped his great grandmother…. the answer is the same. Understandable for you to be hateful. And yes… be prepared to defend yourself.

  14. Ramrod, my guess is that it won’t help much in your job in sales and marketing. In my discussions with Anthony Scalia and Silent Waters, both businessmen, they have proven that one can be a successful in business without knowing much economics.

    When a businessman strategize to capture more market by lowering its price, he is actually using economics.

    Microeconomics is the study of production, (That’s manufacturing firms for you) distribution (that’s channels of distribution for you) and consumption of goods (that’s Sales for you, so what is this talk about separating economis from business and ruling out competition.Economic analysis is made possible by studying the business cycle.

    A businessman with no economic background may in fact is applying economics without him knowing it. Studying the market will make him consider the demographic factors in targeting the market. That’s economics for you. Tell me about a business executive or a businessman who would not plan based on the information about the economic acitivites of a country.

    COuntries do compete that is why they set up quotas and trade barriers.

  15. The Equalizer :
    Will the standard lines still work???

    1)”Where is the evidence?Those are just allegations.”

    2)”We should consider the case closed and focus on the issues that really matter to the people”

    3)”Tne political noise is only in Manila.Manila is not the Philippines!”

    4)”This is just the work of a few politicians!”

    5)”Pananagutin natin sila. Galit ang tao sa kurakot. Ganon din ako!

    6)”Ang aking pamilya ay hindi nagnenegosyo sa pamahalaan”

    7)”Ako ang Pangulo. Wala ng iba!”

    8)”Who would invest in the Philippines if people power would happen? ”

    9)”Let’s move on!”

    10)”I have no shame!”

    Take your pick.

    I sincerely hope so.

    Where did it lead us from the last people power revolution? Nowhere and nothing has changed. It just perpetuated a rotten political system where patronage politics, warlordism, oligarchic monopolies, unfettered corruption, cuurupted media, and nepotism rule the day. Do you think another change of leadership with even the best of intentions will be able to stump this systemic ills overnight. I dont think so. Since the downfall of FM, when did you see us as a people rally behind the flag and give any of our presidents a chance to work for real reforms.

    We always demanded of them to create us an utopian government which everybody knows is impossible. They were all busy putting out fires for their own survival wasting precious momentum on our economy. Reforms takes time and if we only channel all our energies in trying to change the system within our constitutional framework instead of undermining it every step of the way. We probably have made significant headway in our quest for good governance. The cost of replacing the president right now is immeasurable on the overall scheme of things.

  16. “brian, there isn’t a specific right and wrong. an individual has to make up HIS mind about HIS right and wrong. you don’t need an answer from babe romualdez who was respectful enough of our intelligence not to offer one”

    My God, you’re not from UP, are you. Specific right and wrong? Mita, thnk about what you’ve written and please rephrase it to convey exactly what you mean.

  17. “You really have no idea what charity means until you are on the receiving side of charity. ”

    Nothing wrong with charity, unless it gets in the way of establishing social welfare. Charity have becomes the “Indulgences” of our era. Thieves, land grabbers and labor abusers give to charity in the attempt to erase their corrupt practices. I repeat, I agree with the Church’s principle of accepting charity without prejudice to the charity giver, but this does not mean the thief who gave up 10% of his loot to charity is forgiven.

  18. Mita, I know utang na loob is a big deal to Filipinos, but then its inverse, vengeance should also be given its equal legitimacy, don’t you think?

  19. “Countries do compete that is why they set up quotas and trade barreirs.”

    Obviously the state protects its oligarchs from competition from other oligarchs who are also protected by their governments?

    Depending on their protectionist policies which lies under whether they are lite mercantilists of heavy mercantilists. (Mercantilism being the ideology.)

    So oligarchs depending on what stage of development their societies are will always leverage their mercantilist tendencies to protect their interests.

    In the case of the Philipine landlord elite they will use nationalist provisions to turn mercnatilist policies into rent and rent seeking activities.

    But what the uniformed forget is the fact that in modern societies fiscal and monetary polcies which lies at the heart of any nation state is denationalized then the state begins to disappear. it becomes simply the pimp for foreign capital. FVR,JDV, Big Mike, GMA are simply pimping Philippine resources and labor to foreign capital.

    The landlords do the same. rent and rent seeking becomes the main economic activity.

    Look at GMA’s supporters – Donald Dee a former quota landlord. Serge Luis Ortiz – a common bonded wharehouse, Noemi Saludo (Her middlename is Liwag of Liwag textile mills)also a common bonded warehouse landlord,who is also a top officer of PCCI and mother of Ricardo Saludo.

    So if countries do compete by using reactive or proactive mercantilist policies then that means that Mr. Market is a myth.

    So Joe Al and Neri are bunch of con men by trying to say that to break the hold of oligarchs we have to use Mr. Market.

    So we can stop referring to Iraq as simply Iraq but refer to it as occupied former Iraq. Pro active mercantiist policies also means protecting the very resources that are vital for a nations economic health.

    The most pro active form of mercantilism is imperialism.

    It is easier to understand economics systems and structures when we understandand and accept the global political economic reality.

    So if a country would wish to determine their own destiny then it would mean that they would have to isolate their fiscal and monetary policies and nationalize their monetary system.

    The ultimate form of mercantilism to defend against imperialism is monetary nationalism.

  20. “Perhaps the boldest initiative of the Ramos administration has been its attacks on the “cartels and monopolies” of major oligarchic family firms that have long had a stranglehold over key segments of the national economy. The first target, a moribund and inefficient telecommunications industry, has been transformed by new competition and now serves as the model for the reform of other sectors.” -”

    Paul D. Hutchcroft
    PLDT, Smart is now controlled by the Indonesian oligarch Liem Sioe Liong. (Salim)The engineering is supplied by Japan NEC. So the bulk of the surplus profits is sent to HK (Greater China) and Japan. very good for the cultists of GDP growth but very bad for Philippine economic development. In this particular divsion of labor the value added that remains for the pinoy is minor.

    The same for Globe owned by the Multinational Ayala and Singtel. The providers of capital equipment I do not know. Once again the LVA is minor.

    Did FVR invent cellular technology? Nope. Salim was Suhartos favorite crony.

    Punch in the name of James Riaddy and look at his influence with Big Mike and GMA thorugh Donald Dee and Serge Luis Ortiz and the Urban Bank.

  21. Obviously the state protects its oligarchs from competition from other oligarchs who are also protected by their governments?

    You mean the farmers protected by the govenment are oligarchs?

    You mean the Philippine garment manufacturers who can not penetrate the US markets have to comply with the US quota because the US government are protecting the oligarchs?


  22. Look at the Garment Manufacturers in the Phils. None exist. They are simply contractors doing work for huge S. Korean, Taiwanese and Hongkong conglomerates. Mostly HK. (Ever hear of Esquiel, Li and Fung)Who controls them apart from Walmart, and the rest of the giant retailers.

    Who are the farmers who are the major exporters in the U.S. Cargill, ADM, Continental Grains. Who controls the world’s food supply. Armour, Kraft, General Foods and the others and the other huge agricultural giants.. How much of subsidies go the family farmers in the U.S. They are a disapearing species.

    Whoare the big agricultral exporters in the Philippines.
    Dole, Delmonte whodo a lot of contracting to Marsman. Who sells bananas from the Philippines. Chiquita and Dole. Who is United Fruit?

    Who are the largest semi -con producers in the Philippines apart from Intel, Timex and the rest. They do not want to go to China and expose their technologies since the Chinese will simply copy it.

    We give them tax incentives and tax holidays not to do business here but to use our cheap resources. Hey it would be great to learn from them and do it our way. The chopsticks economies did it ages ago starting with Japan at the turn of the last century.

    Yup, let us move from looking at exporting balut.

  23. So if countries do compete by using reactive or proactive mercantilist policies then that means that Mr. Market is a myth.

    On the contrary, it is protecting its market and that’s where economics come in. When there is too much supply, prices will go down. business will suffer.Regardless whether the businessmen are oligarchs or not, the country
    will protext its competitiveness in the global market.

    The main issue raised by Karl is the separation of economics and business.

    With your long post, it still points to the marriage of the two, economics and business.

    Do not use too much high falluting words. They don’t mean anything to people who can not understand the technical terms. I prefer to use terminologies which could be understood by lay persons.

    Hindi pa kita pinapatulan sa mga gold exchange standards mo.

  24. Bottom line is this- why does the U.S. government not allow market forces to bring down Citigroup, JP-Morgan Chase and the other financial houses by allowing deflationary market forces to keep destorying housing valuations to be followed by credit car defaults, car loans, and more mortgage defaults that will contue to eat away at the capital positions of these financial institutions.

    Imposing market discipline could and would possibly bring the U.S. into a deep and hard landing. The big D word comes into play.

    The U.S.govt. is thinking of freezing mortgage rates. Why? Bottom line is the whole economy could go into a lurch. So what? Let the capitalists suffer. Let the system create the vast army of unemployed.

  25. To reinforce hvrds’ point above (at 2:49am), here’s what economist Ricardo Hausmann said:

    The same voices that supported tough macroeconomic policies to deal with the excesses of spending and borrowing in east Asia, Russia and Latin America are today pushing for a significant relaxation in the US to deal with the so-called subprime crisis.


    The US is exempting itself from bitter medicine that the IMF-WB asked Jobo and Virata to administer.

  26. hvrds: so why is the U.S.govt. thinking of freezing mortgage rates and taking action so that the US economy does not go into a lurch?!!!

    Is it some thing about elections-2008?

    Is it some thing like the US electorate in particular and the US population in general truly does not care to have a “… vast army of unemployed”?

  27. Bottom line is this- why does the U.S. government not allow market forces to bring down Citigroup, JP-Morgan Chase and the other financial houses by allowing deflationary market forces to keep destorying housing valuations to be followed by credit car defaults, car loans, and more mortgage defaults that will contue to eat away at the capital positions of these financial institutions.

    The names you mentioned are in banking busineses and US are doing everything to help them to avoid recession and ultimately depression.

    So you still believe that business should be separated from economics?

  28. It is very diffcult to have discussions with people who see things on one dimension.

    The dominance of financial markets create asset inflation in many asset classes and even today commodities have become an asset class. When confidence leaves asset marekts their valuations will tend to deflate and then create a spiral of deflation leading to massive failures of the banking institutions that will further contract credit to the real economy. You have 1929 all over again. The British government the land of Anglo Saxon ideology of free markets recently nationalized Northern Rock bank. The owners of the bank lost their capital and the state took over. To keep the confidence of people in paper money they saved the depositors. They should have let the bank fail and bring down the depositors with it. The depositors then would have strung up the bankers who lost their money. Off course there could have bank runs but what the heck.

    It would have been a good opportunity to educate people about free markets and the importance of governance.

    Do you know who are the major stockholders of the major banks in the U.S.? Do you know who are on the members of the Board of Directors of these banks?

    Do you know the philosophical difference on having the gold stnadrd which is vital for free markets as a opposed to monetarism (fiat currency) which is an intergal part of statism.

    The split between the Austrian brand of economic (Hayek)philosophy and Keynesian/ neo-Keynesian branch.

    It is the economic system and structure that predetermines the type of business models that will survive. But that is predetermined by historical forces. (Natural and man made)It is this this will determine political and cultural realities. Where are most of the oil reserves on the world? Why are there more pinoys who are contract workersin the M.E.?

    The mechanical device to pump out water from coal mines due to the fact that the English had almost cut down all their trees and had to depend on coal to warm their homes and fire their furnaces. The steam engine.

    That accident of history led to the seminal change in the means of production and multiplied productivity.

    Who ever said that business should be separated from economics? They are only one part of the economic agents in any society?

    The issue is does Mr. Market exist or not? Can he be used to destory the oligrachs which is a misnomer for capitalists. The Philippines mostly has local landlords and merchants. The capitalists are mostly foreign. So how will you fight the capitalists when there is no Mr.Market. The world is ruled by oligopolists who pass themselves off as free marketeers and free traders.

    When you get up in the morning and wipe your ass with toilet paper and use the water think hard on who supplies you. Unless you live in the barrio.

  29. The U.S.govt. is thinking of freezing mortgage rates. Why? Bottom line is the whole economy could go into a lurch. So what? Let the capitalists suffer. Let the system create the vast army of unemployed.

    You’re just thinking of the US corporations involved in the mortgage “fraud”. So you’re saying that let them shut down, leaving many unemployed.

    But this is larger than that. This is not about saving the US mortgage market only. These mortgages were sold to foreign banks and investments all over the world bundled as mortgage bonds with the houses as securities.

    So if these foreign banks will demand for the foreclosure of the securities, will the government shut its door not to help?

    So, there business and economics go together.

    Am sure the government is going to help but heads will roll.

  30. It is very diffcult to have discussions with people who see things on one dimension.

    YOu talk about financial system when you can’t even mention the effect of the subprime mortgage to the global financial system.

    You talk in circles. You talk about gold exchange standard when it has been abandoned long time ago. Most of the countries are in managed currency system which are commodities by themselves in foreign currency markets.

    The issue raised is, can you separate the businessmen from the economists? Yes or no.

  31. It is the economic system and structure that predetermines the type of business models that will survive.

    There you are.

    Now I am convinced that you really do not know what you are talking about when you said leave economics to economists. Karl took note of that.

    There is no use for debate. Your rebuttal is a squid tactic.

    I got no time for that. I let you talk nonsensically and allow people to admire you with long post that led to nowhere and which are not even relevant to the topic being discussed.

  32. Brian, why is the concept of an individual determining for himself what is right and wrong so alien to you?

    It’s been a long time since I studied philosophy so whoever said it escapes me now… But I remember, individuals are capable of determining right from wrong and that ability is based on outside influences like his parents, his teachers and mentors, and society….then also internally, his experiences and blah-blah, even his own thought processing abilities but most importantly, his conscience. that’s also the reason i say guilt will not come automatically for everyone.

    petty bribery, not staying in your lane when it’s specifically said, “stay in your lane,” and making illegal left turns or u-turns in Metro Manila is okay here probably, but not in other big cities of the rest of the world. magnify those petty “wrongs” but it’s still the same thing.

    so, i stand by what i said, there is no specific right and wrong…it’s up to the individual to determine that for himself, even when society won’t agree with him.

    about charity. charity has been getting a bad rap because of the perceived hypocrisy of the benefactors. my own thinking, yes, all that happens but who is to judge those individuals or their intentions and what for? who can really say what is in a man’s heart if we’ve never been there? the beneficiaries of charity do not have much choice nor do they probably care about discrimination because they’ve had enough of it.

    think about this..if there is no one else the marginalized can turn to – where will they go? local politicians who will turn them into their goons come election time?

    unrelated now but in the same vein, this is like market vendors all over the country turning to 5/6 lenders because they are there, soliciting their business. even if banks provide micro-financing, a lot of people will not avail of it because filing papers for a loan is too complicated for them. and you know how Pinoys are about papers and more papers…nothing is ever easy.

    social welfare is essentially run by bureaucrats who have their own limitations. When I say bureaucrats I don’t mean it to trivialize the work they do. It’s the position they are in that creates those limitations. Even the system itself has limitations. we are not at a point where social welfare can serve all the needs of the people. That is the reality of things.

    legitimize vengeance like utang na loob? i’m sorry you lost me there…i don’t think i mentioned anything about utang na loob. if you refer to it because i said i still appreciate the charity I received in my youth…that’s all I meant – appreciation with no strings attached.

  33. Ramrod on grduate studies,ikaw pero it is just a tool , a tool for promotion or a tool for any other purpose…at at the end of the day nasa diskarte pa din yan.

    It is the first Time I saw HVrds discuss with someone i multiple times.

    As for cat,I may have ooposing political views ..pero mas naiintindihan ko ang mga punto nyana madali lang maintindihan at madigest, sayang naputol ang exchanges nyo ni hvrds pero buti na din bago pa may magsabi na tama na ang pataasan ng ________.pero I still read the kilometric posts of HVRDS and the rest of the posts natututo naman ako eh.

    What was the concern of UPN Starting with the corect premise or position,CVj tried to answer it by separating ideas of prejudice and the like from collective guilt; sa tingin ko lahat naman me punto na gusto ipahiwatig eh.
    If you start with the premise on viewing collective guilt as a result of prejudice or racism iba talaga ang resulta who sees collective guilt in another sense.
    Kanya kanyang “eye of the beholder” yan kay tama ka when you said start with the correct premise,position or perspective.

  34. Question for HVRDS,
    How can a stimulus package ease the debt burden of the debt crunched citizen. The stimulus is for pumpriming thru consumption;where does paying mortgages come in?
    tapos muntik pa nating gayahin.
    Now going back to separating business from economics, they cannot.I agree that evnen if the concern of the businesses is the bottmline, to do that they have to be productive and an incentive to productivity is competition.
    Since business now is more service sector oriented,having a better performance is a form of competition.

    Now as to its application in manufacturing. Doing it the Toyota way or throu practice of kaizen or continuous improvement can not be done without competition, their pracice of getting methods that works from the ranks maybea good practice but without market intelligence by finding out how others do it can they be a success?
    Their sideimpact technology was a hit because not so many people can own a volvo.
    Its not just the economy,stupid as a clinton might have said once.
    Now their problem is now financial,but they are still the largest economy in the world.
    Japan has long been the second largest economy but how without direct competion from pirating the quality experts of the us,by controlling their currency like what China is now doing,by manipulating their trade surplusses and deficits.
    In short it is a synergy of theories not just business and economic theories.
    I may sound tanga or ignorante,but please do reply mr. HVRDS.

  35. “Who are the big agricultral exporters in the Philippines.
    Dole, Delmonte whodo a lot of contracting to Marsman. Who sells bananas from the Philippines. Chiquita and Dole. Who is United Fruit?” – hrvds

    Its not United Fruit but UNI FRUITIE, its one and the same with Chiquita also a big multinational player in this industry, there’s also Lapanday.

  36. C At

    Thanks for the defense. Hirap kasi kay CVJ, titira lang siya, patalikod pa. FYI, I have an MBA which means I also know my economics.

    You’re the economics guro here, yet you can’t see what Scalia is trying to point out. That Family Income is NOT equal to GDP….it IS a component of GDP. In your world, GDP=Family Income. Reason being that you really have rose colored glasses with respect to the administration (and by the way, I am no fan of it, but I am FAIR about it).

  37. How do you make money off this?

    OT hehehe….do option trading, but its not for the faint of heart. shorting financials, homebuilders have made some people a lot of money since last year.

    commodities (oil and gold), energy (solar) and agricultural(genetic corn)equities are the hottest to own in wall street right now.

    emerging markets including our beloved country with good company fundamentals and earnings will come out winners when this downturn turn around.

    buy yuan or euro as the US fed will continue cutting rates putting pressure on the greenback

    do due dilligence but currently the price per share of blue chip stocks are low. there are a lot of opportunities out there that come only every 10 years. having said that, smart money are still shorting the market and not convinced the credit crunch has unwind. good luck

  38. How can a stimulus package ease the debt burden of the debt crunched citizen. The stimulus is for pumpriming thru onsumption;where does paying mortgages come in? – Karl

    Karl, if i may, from the link i referred to above (at 3:06 am), the stimulus package in the US comes in the form of their Central Bank (Federal Reserve) lowering interest rates. This keeps cost of lending (mortgage rates and other interest rates) low and makes it easier the consumer (and businesses) to continue borrowing or financing existing loans he/she has. It is in this sense that the citizen’s debt burden is eased.

    Moreover, with lower interest rates, investors will have more motivation to invest in business ventures rather than keeping their money in the Bank. That’s how lower interest rates stimulate the economy.

  39. Silent Waters, if you look back to the previous discussion, i did not say that ‘GDP = Family Income’. We all understood from the beginning that there are differences in what is included in these measures.

    Where Anthony and i differ is that he seem to believe that GDP is not a measure of income but rather measures the value of final goods and services. I explained to him that the value of final outputs of goods and services is expressed in terms of income so there is no distinction between ‘final output’ and ‘national income’. That’s why GDP is part of National Income Accounting.

  40. CVJ,
    The stimulus package was for tax rebates and others with the intention of providing low income earners with money to spend. the lowering of the interest rates was the FEd’s or Berananke’s move,his predececessor Greenspan is also being blamed by certain economists. As for making it easier to borrow,it has not resulted to that, as of yet.The problem is not that easy,and for sure the next president will have a battle ahead him or her.
    Mabe and maybe only, why allow people to borrow more, e di ba lubog na nga sa utang ano yan debt restructuring uutang para me pang bayad?
    Fortunately with the few months i have spent with the call center that deals with credit cards,ganun na nga ang ginagawa umuutang ng low interest para mabayaran ang balance na nasa default rate na,wala ng magagawa eh.
    As for the subprime resulting to selling at a loss,isa pa yan wala ng choice …yung tita ko nga hirap magbenta ng bahay nya kahit sobrang palugi na.

  41. “A businessman with no economic background may in fact is applying economics without him knowing it. Studying the market will make him consider the demographic factors in targeting the market. That’s economics for you. Tell me about a business executive or a businessman who would not plan based on the information about the economic acitivites of a country.” – The Cat

    I never thought I’d say this but thanks. I never saw it that way, we just do what is necessary to hit volume and profit targets – just simply find ways to sell without giving away the mill.

  42. The stimulus package was for tax rebates and others with the intention of providing low income earners with money to spend. – Karl

    Ah ok, you were referring to that stimulus package. Unfortunately, the current package excludes the most effective provisions with the most ‘bang-for-the-buck’, i.e. foodstamps and unemployment insurance as described here:


    On your original question, i think tax rebates would have minimal, if any, impact on relieving personal debt (e.g. credit card and personal loans). It would also worsen government debt.

    Maybe and maybe only, why allow people to borrow more, e di ba lubog na nga sa utang ano yan debt restructuring uutang para me pang bayad? – Karl

    The economist Ricardo Hausman (who wrote the FT Column i linked to above) would agree with you. In fact that’s his main worry with the Fed’s current approach. He has expressed his concern that the Fed’s lowering of interest rates will just feed into the American consumers’ debt habit and postpone the inevitable need for adjustment.

  43. You’re the economics guro here, yet you can’t see what Scalia is trying to point out. That Family Income is NOT equal to GDP….it IS a component of GDP. In your world, GDP=Family Income. Reason being that you really have rose colored glasses with respect to the administration (and by the way, I am no fan of it, but I am FAIR about it).

    Is this addressed to me?

    I think I must have missed the discussions re this topic.

  44. Japan was the very first country that used the politically correxct term -reverse engineering to move from being an agricultural society to an industiral one. This started during the Meiji transformation period.

    During the 19th century there was no such thing as protecton of international property rights. It was only after the Second World War that Japan moved to buy patents and convert them into cheaper products and they improved on them Morita is a perfect example. Think Sony.

    Toyota moved from textiles and copying U.S. textile machines to cars. Their model Chevy II for the Crown. Komatsu from International Harvester. It was called reverse engineering.

    While the Americans were trying to pacify the Philippines century, Japan was moving to do battle with the Russians in steel hulled ships. The armor and guns on the Japanese ships were of better quality and the tactics were learned by the Japanese from the British battle vs the French from Trafalgar.

    All these improvements came from the order from the Emperor to study the West and their technology and catch up.

    You do not have to reinvent the wheel. You improve on it.

    First on ignorance and stupidity.

    Economics is really very simple – it is the study of the resources of man and its allocation to human needs.

    Why has it become so confusing? You have literacy – functional literacy and professional functional literacy. I still cannot figure how pharmacists understand doctors prescriptions?

    The U.S. problem is one of loss of confidence in financial institutions. Unknow to many is the fact that Europe, Japan and China in that order are the biggest investors in U.S. financial markets including lending to the U.S. state. That is why you have all sorts of problems in Europe traceable to U.S. subprime.

    The attmept at a stimulus package is simply to intill confidence to the general public that the state will be there. Soemone once wriote that the economy is like large clitoris that has to be stimulated to become engorged once again. But that will pass. What the U.S. need is time to regain confidence but the bad news keeps growing. The next ciorsis is this. How could insurance companies insure bonds vs. default when they have limited capital. In a deflationary period more bonds would go into default and thus all these policies that hedge funds and banks use would be worthless.

    It is a house of cards entirely based on confidence. A giant Ponzi scheme premised on rising asset valuations.

    Banks are tightening up lending standards and are drawing back on giving credit across the board. They do this by increasing rates long term.

    Plus the excesses of the past -(massive liquidity) is sitll out there. You have defaltion in asset markets, but you have inflation in commodity markets because of weather and and increasing demand from emerging markets plus the period of tough oil with the threat of terrorism thrown in.

    A witches brew for a perfect storm breaking out. Where and when will a spark light up this perfect fire storm? No one knows. This problem in the philippines is a good sign that the wekness of the almost totally debased state is being exposed. Every passing day more details are coming out that will tend to show that Big Mike and GMA are simply crooks and are a reflection of the miserable state of affairs in the country.

    We all share the blame. How can one teach kids about ethics and morality when the perception is out there that our leaders are nothing but criminals.

    We are a fortunate bunch to have been introduced to progressive theories more so than our neighbors but are unable to do anything about it.

    The simple reason is because we failed to empower the vast majority. Our lines of common good stop at the boundaries of family and not community. That common sense of community is sorely lacking.

    My guess is we have to come and bring or wait for the country to come to a serious crisis. The three agents in any economy are the business world, the government and the working class. That working class is the necessary buffer between the other two agents. it is normamal and natural for the business class to dominate the state since they have the means to support the state. But their price in return will always be against the common good. So how does break the cycle.

    The material means will always favor big business.

    There is a huge imbalance in power and it will take enlightened leadership to unite the many.

    The one and only amazing thing about Obama is the symbolism that one sees in a black man surrounded by white folk who are cheering him on. Suddenly you see a group of white folk who have become color blind. Suddenly you realize that the idea of all men are created equal is true. But the problem remains on how to achieve equal opportunities for all. That means that it falls to governance supported by not a majority but a committed group of people who believe in the common good. The majority are mostly sheep anyway. Ignorance is not a bad thing. Stupidity is.

    Just watch the Big Mike and GMA try to wriggle out of this mess and you see how stupid they must be for thinking that most people are dumb. They are destroying themselves because of hubris. They have become their own worst enemies. For me that proves there is a God.

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