Economic Stimulation

The Quisling Government has put through its plans for an economic stimulus package to try to ward off the worst of the economic/PAD-caused crisis. It claims it will help, the Opposition claims it will not help. The truth of course is that no one yet knows how much such a package will help in the medium (i.e. more than one year) term, whether it will be enough and in what timescale the borrowed money can be repaid. However, it is true that nearly every government in the world has been obliged to put forward some kind of package to try to protect their own economies. By what principles, therefore, should the Quisling Government’s package be judged?

First, it is apparent that most of the measures put forward are simply the same policies initiated by the previous democratically-elected governments, which the Quislings so endlessly criticized as ‘populist’ and ‘vote-buying’ – well, we know how much integrity these people have so there is no surprise in seeing them change their approach completely and then deny they have done so. These policies – relief for the poor, community level initiatives and infrastructure improvement – are generally sound in that they help at least some of the most vulnerable in difficult times and promote local level production to boost income (and morale) across the country and reduce the importance of labour migration and its negative social results.

What other policies have been announced? Fifteen years of free education is promised – difficult to argue with that as a principle although it does not appear to have been costed properly, suggesting it is not a serious promise.

Free milk is promised to some additional school children. Again, not in itself a bad thing, although it is hard to justify in terms of stimulating the economy and the kind of policy which is most susceptible to corruption, based on the historical record. Let us hope that expenditure in areas such as this will be transparent and accountable.

Some tax cuts appear to have been promised – this would be a mistake (don’t ask me, ask Nobel Prize for Economics winner Paul Krugman), government spending is better.

The PM himself, of course, does not help his cause much because he only ever speaks in vacuous sound bites without the ability or awareness of the need to be specific. As more specific policies emerge, if they ever do, then there can be some proper consideration of whether they are appropriate or not.

Stimulus Plan Considered

As a matter of principle, Paul Krugman apart, it is probably sensible to listen to economists and then reach the exact opposite conclusion. Economics is in some ways a wonderful intellectual pursuit in that it is capable of throwing up any number of complex, sophisticated and even elegant theoretical models which invariably suffer from the same, single, fatal flaw: they are all absolutely useless in explaining how people actually behave.

Now, ‘leading economists’ are being quoted in the Bangkok Post to pour scorn on the new Quisling government’s economic stimulus plan. There is, certainly, a great deal of concern about it: the budget is quite clearly calculated on the basis of most money being directed to Ministries controlled by the PADemocrats and hugely less to the Ministries held by coalition parties, irrespective of logic or need. Certain large ticket items are passed without a thought, irrespective of logic or need (and possibly even talking about them will lead to flags being raised and files opened or reopened). The ‘stimulus’ part is also subject to some searching questions: why, for example, is money being given to (Democrat-supporting demographic) salary-earning private sector employees and civil servants and nothing is available for (non-Democrat-supporting demographic) poor and redundant workers?

The Quisling himself has been all over the place trying to justify the policy, claiming it is or is not a one-off payment, it will or it will not be paid immediately and so forth. It is fairly clear he has little idea what the policy is or what it means – it is often the way with the extraordinarily rich, they can get high marks on their economics exams and yet be totally incapable of running a whelk stall.

Some aspects appear quite sensible, although that may mean they will never actually come to pass. Promoting the entrepreneurial spirit of redundant workers is clearly a good thing and was vital in mitigating the damage after the 1997 crisis. The support for SMEs and entrepreneurs introduced by Thai Rak Thai is crucial in promoting non-export related domestic growth and it would have been better if it had been allowed to continue properly subsequently.  

Your Tax Baht at Work

More than six million Thais – two million of them children – still live beneath the poverty line, which is calculated at 1,386 baht per month (approximately US$43) and another five million within 20% of the line. The government, elected under a pro-poor and redistributive manifesto, brought into force a six-point plan to help the poor at a time of rising oil and food prices. The measures included free bus rides, a price cap on cooking gas, excise tax reductions on fuel and water.

The plan seems to be working well. Poor people are benefiting from the subsidies and those not in need are not able to sequester the benefits for themselves – i.e. riding on one of the 800 free buses does not attract the middle classes because they are among the non air-conditioned not terribly comfortable set of vehicles.

Some have argued that the use of food coupons would be better than subsidies. Subsidies, after all, tend to become counter-productive if not managed effectively and attract the wrath of the IMF/World Bank and other such institutions. However, food coupons would not work so well in a society in which so many people exist in at best a semi-official state. People too poor to pay tax and living in an illegal or at least unregistered house (i.e. a slum) do not appear on many official records and would, therefore, not be able to obtain the coupons – people also do not know how to access such services and would be disenfranchised accordingly.

These are the policies that are labelled ‘populist’ by the anti-democracy movement and the once-proud Democrat Party, which has become a home for scoundrels under the disastrous leadership of super-privileged quisling Abhisit Vejjajiva. What, in fact, is wrong with populism like this? People in their millions appreciate what the government is doing for them, although no doubt they would like there to be more and many are affected by the relentless anti-government propaganda in most of the media. Consequently, once the courts ban and break up the People’s Power Party on some pretext, a new party will be formed and the work will begin again (of course it has already started) on putting together a new coalition of interests that will permit these pro-poor policies to continue, populist or not.