Indices that matter

“Two things have painfully become apparent from our examples from the American economy and our own. One, not all economic numbers matter to the public. Two, not all optics are real.

In the previous administration the economy grew to unexpected heights largely due to fundamentals set by the administration before it and a global economy belatedly showing the effects of painful fiscal patchwork needed against ills inflicted by recklessness from 2008 to half a decade thereafter.

Part of the environment that created an illusion of competence for Benigno Aquino III was the foreign exchange rate between the dollar and the peso.

The strong peso was not because of any enhanced economy that Aquino brought about. Rather, the upsides were due largely to American domestic weaknesses. A currency with low interest rates is not a currency in demand and hence its value is lower. Still reeling from the 2008 financial crisis the Federal Reserve had to keep interest rates low due to a number of factors.

One, unemployment was high. Had interest rates risen to pay down the increased liabilities of banks that created the financial crisis, the unemployed would be the first to suffer from a rise in aggregate prices.

Two, American banks were hardly lending as they were still recovering where Barack Obama’s controversial solution was to use taxpayer’s money to bail out even those complicit in creating the crisis. That tends to raise taxes where, again, the hardest hit would be the unemployed.

These resulted in a weakened manufacturing sector which compelled them to import using their weak dollar. For economies like ours, we could then export more and charge more.

The economic upsides Aquino inherited created the illusion that with his economic governance and gross domestic product (GDP) growth largely fueled by the services sector, everything appeared hunky-dory even when it really wasn’t.

Government spending was down. Infrastructure spending was non-existent save for private sector initiatives. Both the manufacturing and agricultural sectors were down, the latter totally neglected. Unemployment, hunger and poverty indices were high.

non-inclusivity that these inflicted, Aquino remained unemphatic and his scam- and scandal-ridden Cabinet secretaries simply went their merry way, worsening matters, with one, so ambitious he attempted to institutionalize ineptitude and incompetence via an attempt at the highest office.

Two things have painfully become apparent from our examples from the American economy and our own. One, not all economic numbers matter to the public. Two, not all optics are real.

Aquino went to town on the news our GDP growth was next to China’s and that our credit ratings were upgraded. The numbers mean nothing to a greater public when unemployment, inequity, poverty and hunger remain high and practically unmoving.

The indices that measured those mattered more. Ask them. What indeed is GDP to an underpaid elementary school teacher or a rice farmer? The international credit rating is another irrelevant index for most. It’s utility is misunderstood. Ratings are directly related to borrowings, not the public welfare. Ratings reflect the economy’s capacity for repaying debt. The fact is that in the years prior to Aquino, the preceding presidency had already transformed the economy into a net creditor. We were out of the woods long before Aquino. Moreover, when we array the econometric matrices, we see that the higher our tax rates are, the higher our credit ratings. We might crow about ratings but it means little to the greater public.

It is ironic that the opposition would now develop empathy for those their bungling government victimized and are now going so far as to playing the anti-poverty card against the illegal extrajudicial killings they try to pin on the Duterte administration.

Look also at the opposition’s focus on the militarization of the West Philippine Sea. Simply ask who the idiot was who recklessly deployed an armed frigate just to threaten small-time poachers.

On the things that matter to the public, from jobs to crime rates, inflation, poverty and hunger, note Duterte’s positive indices where the opposition is hypocritically silent.