The limits of presidential economics – or how to get free load

With pundits already talking presidential politics, it is sobering to have a basic understanding of the role of the Executive in “fixing” the economy.  Here’s a view on the recent US presidential campaign that should also be applicable here in the Philippines.  Russel Roberts essentially says that stimulating an economy is easier said than done.  And  in a democracy the Executive is only one of three branches that moves the governmental tree.  I said “tree” because it can shade us a bit, it can nourish us some, it can even produce fruit, but a tree or government is not a silver bullet for economic or social problems.  The same applies to NGOs.  (Why are they called “non-governmental” when what they do is very political?)

My own take is this:  The temptation to cheat an election is always there, and the campaign opens up ways for various  “legal” forms of cheating.  Obviously, as in the U.S., the legal variety can take the form of intellectually dishonest promises.  For example, a candidate may proclaim that he favors a tax on text messages that should not be passed on to the public.  It looks good, but you can’t have it both ways.  A tax must be paid if it is collected, and somebody pays it, and by its legal nature a tax IS paid by the public.  The same dishonesty exists when another candidate promises tax cuts without spelling out which parts of governmental activities he will shrink.

[By the way, if the politicians were sincere about bringing down the price of a text message, one seemingly easy solution is there.  The government can create its own telecom to sell text messages at cost.  The solution will not fly two reasons: (a) the existing telecoms will  lobby hard to ensure that this does not happen; and (b), those who run government will see ITS telecom as a cash cow, so it will “bloat” expenses and end up not selling at “true” cost.  The second reason is often suggested by economists who argue that government should stay out of normal commercial business, and limit itself to “public” goods.  But isn’t communication, like roads and bridges, a public good?  Sooner or later, cell cites can be shared or “piggy-backed” so that several telecoms can use the same transmitters (they may still have their separate computers), and this naturally opens up the cell grid as a shared highway, i.e. a public good.]

The theoretical remedy to dishonest campaigning at election time is freedom of the press.  In the Philippines, that may not work in cases when the press can be “bought.”  Such buying can be subtle or not, but likely it is there. 

But all is not for naught.  An honest election is said to be just like a trial by jury (“of your peers”).  The commoner, i.e. the poor, gets to have a say.  How potent that is is always a question, but that is part of the attractions and distractions of democracy.  The poli sci folk tell us that there is still no better alternative.


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