Deconstructing Inflation in T&T

Every month T&T's inflation numbers are reported, however the public is never afforded the full picture with regard to its causes and its implications. Descriptions of inflation almost always surface as a nebulous scourge, an inconvenience that is inevitable and must be tolerated. Yet inflation is a consequence of economic intervention by government which hinders the markets from attaining general price stability.  

Simply consider; that if productivity or output in T&T were to remain constant nominal prices would only increase if the money supply in T&T increased. The steady expansion of the money supply unfortunately has been occurring in T&T since the mid 90s triggering constant inflation. Increasing the supply of money simply decreases the value of existing dollars in circulation. By doubling the quantity of money you double the price level. by tripling the money supply and you triple price levels. Prosperity is only improved when productivity increases not when money supply increases.

Source: T&T Central Bank

US Shale Gas Might Not Be Such A Big Threat to T&T

The sky over the T&T energy sector may not be falling after all due to the expected stiff competition from the US shale gas surge.

According to a recent article by F. William Engdahl "the US shale boom is revealing itself to have been a gigantic hyped confidence bubble that is already beginning to deflate."

Read the article here: The Fracked-up USA Shale Gas Bubble
Global Research, March 13, 2013

Reasons Why Government Corruption Persists

The very nature of government ensures corruption will remain a pervasive scourge on Trinidad and Tobago.

The political system essentially bestows inherent power upon politicians to disburse tax revenues at the discretion of the politician. They have the power to award and cancel contracts, give hand outs, approvals and special favours.

Government essentially a high priced auction.

Given this structure persons and businesses with an interest in benefiting from potential political favours from politicians essentially position themselves in the Political Auction House. The political favours therefore end up going to the highest bidders i.e. the persons with the deepest pockets. 

Consequently the wealthy or the business class are granted a significant advantage over the rest of society as they are able by virtue of their purchasing power to extract the greatest benefit from the politician. 

What makes this worse is that the auction house attendees bid for tax revenues offered by politicians that were extracted from the wider less affluent population. This phenomenon perpetuates a societal system by which the rich can get richer and the poor gets poorer. This occurs because the elite class can outbid average citizens in influencing and dictating the way  tax dollars are distributed throughout society.

What should be done therefore to mitigate this unpleasant reality? Shrink the power, scope and size of the state, thereby limiting the politician's ability to dole out favours and tax payer dollars at their discretion. A gradual move to a less centrally planned more free-market environment with smaller government, would lead to less corruption in the distribution tax dollars.

If the citizens of T&T think long and hard they'll realize in spite of what the state has led them to believe they pay more into the government coffers than the value they get out in terms of services & support rendered by the government.

Unmasking T&T Trade Union Policy

There has been a prevailing assumption that unions in Trinidad & Tobago always operate in the interest of workers and the society. This notion is hardly ever challenged in the mainstream as it is deemed too unpopular and would spark the ire of the unionized labour force.

There basically remains only one main thing that determines increased wages in the long run i.e. labour productivity. Because if an individual is productive and there is demand for his/her services their wages / salaries will be bid for by employers up to what they are worth in the market place.

If unions seek however to establish wages by the use of intimidation, force and coercion higher than their real market worth they create unemployment and inflation. The most common way coercion is levied is by means of a strike that is not a peaceful one. A peaceful strike is legitimate in that it allows workers to withhold their labour to demonstrate the the employer their perceived value especially when the employer is unable to replace its workers with equally suitable employees at the wage rate striking workers refuse.

However unions threatening intimidation to prevent any dissenting union members from returning to work or new employees from accepting abandoned positions is in effect not protesting against the employer but rather a protest against job seekers. In effect preventing new workers from exercising their best available option for employment.The unions are therefore asserting positions of privilege over other job seekers and are using force to maintain this privileged position against the wider population.

Trini Poem by Miguel Browne

A Trini Poem - Miguel Browne

Trinidadians are a special people of dat there is no doubt, Doh care what odders say of how dey run dey mouth. But of all de special talents dat we Trinis possess, Is de way we talk dat ranks us among de best.  At de street corners, in de shop or at work on any given day, Is to hear us speak and carry on in our own special way. De colourful words, de antics and de accent all combine, To create a whole language dat has stood de test of time. De way we express ourselves and de way we converse, Is truly an art of which every Trini can boast. Look at de many words dat we Trinis create, Just to make it easier for us to communicate. Words like bobbol, skylark, commess and bobolee, Are words dat yuh cah find in any English Dictionary. Coskel, boobooloops, lahay and dingolay, Mou Mou, bazodie, jagabat and tootoolbay.

Why Banking Service Levels in Trinidad & Tobago are So Poor

The general population is continuously subjected to poor service at commercial banks.

• Long lines
• Very limited hours of operation Mon - Thur (8am - 2pm) Fri (8am - 1pm / 3pm - 5pm)
• Impatient and discourteous staff
• Poor and Inadequate ATM service - No Cash, Out of Service etc
• Low interest rates on savings
• High interest rates on loans
• High Fees here & here
• Limited / poor investment products
• General operational bureaucracy
• Favoritism in the distribution of $US and other currency
• Favoritism in the distribution of loans

In spite of the above local banks find themselves in excellent financial shape and perpetually report steady profitability. Normally industries that provide such poor service eventually experience a natural decline. What exempts the T&T banking sector from this fate?

Why The Least Desirable Persons Tend To Rise To The Top in Politics

Time and time again electorates are disappointed whenever changes in anyone or group of politicians don't lead to improvements in society. In fact things often get progressively worse, moreover a perpetual cycle exists where as things worsen the electorate demands sweeping changes only to see things decline further in spite of optimistic expectations.

One reason for this is that usually the persons who rise to the upper echelons of political power tend to be formed by the worse elements distilled from society. They tend to disregard morals, ethics and discount the requirements of honesty and integrity in their daily operations. A basic observation yields evidence to this notion and can be explained as follows:

The Real Reasons Why Real Estate is So Expensive in Trinidad & Tobago

A persistent cry by many young and middle aged professionals is that real estate prices are just way to high especially on a small to medium income budget. Why have prices continued to rise so severely? 

Simple demand and supply dynamics can help explain this. Here are a few reasons that often go unexplained:

Attitudes of Trinidad Youth Towards Entrepreneurship

In October 2012, Junior Achievement of Trinidad andTobago (JATT) commissioned Digital Warehouse, an external, independent, third party statistical analysis firm to conduct a Youth and Entrepreneurship Survey. A nationwide survey was administered to one thousand and eighteen (1,018) secondary school students in Trinidad  to assess student attitudes related to entrepreneurship. 

The study revealed that the majority of students believed they could become successful entrepreneurs (93%) though only 67% wanted to start their own business. Nonetheless the vast majority of students (94%) believed that they could be successful through a good business idea, hard work and determination and that engaging in entrepreneurship is a worthwhile activity beneficial to society (92%).