A crisis of our own making
August 31, 2011
I choked on my coffee this morning when I read your article reporting Maynard Dill's take on the current poor economic environment. “The OBA and company bosses are perpetuating the recession to make the PLP look bad and employers should cut it out and start hiring because people need jobs”, pretty much sums up what he said. This latest piece of propaganda from the PLP-union axis really takes the prize for the most outrageous statement made since Ewart Brown left politics.
First, recessions can be mitigated or possibly ended by Gvoernment stimulus (spending) which creates new jobs, not by companies hiring people when they have no work and no money coming in. That’s just a fast way to go broke. Yes, people desperately need jobs, but to suggest that this mess is the employers’ fault is just so completely wrong as to be unbelievable. It’s the Opposition's fault? Man, give me a break, they aren’t running things, you are. You don’t see the OBA tying up progress in the House, this is not America and the OBA are not the Republican party. Government does whatever it wants, when it wants, how it wants with no input whatsoever from the Opposition. This mess is down to Government, nobody else.
I’ll say it again, Governments are the only ones that can affect recessions, by increasing spending and thereby creating jobs. Of course, this Government can’t spend its way out of this recession because they are already well over a billion (with a B) dollars in debt and just the interest they pay annually on this debt is most of the sise of the debt itself when they took office.
Also, Government has to deal with a rapidly shrinking tax base (less and less money coming in) as more and more companies relocate staff out of here. Why? Well, there’s the work permit term limit issue. Imagine trying to hire talent in competition with companies worldwide and having to tell the prospective employee that “sorry, but we’ll have to fire you in six years” not to mention the fact that in six years you have to start again finding somebody else. You just can’t run a business like that and the good people you want to hire won’t come to work for you under those conditions.
There was the “let’s ban expats from owning cars” fiasco. There’s the perpetual “it takes 6 months to get a work permit renewed’ problem lots of expats say “forget this uncertainty, I have a family to take care of. I’m out of here”. Again, this negatively impacts the company’s business and you can’t run a successful business under these conditions either.
There’s the increasing crime and gun violence, the routine insults and blame (like the subject of this letter) coming from our political leaders, the high cost of doing business here, the whimsical changes to tax rates, government policies and more. (Here’s a tip, Government business works on five-year plans and hates uncertainty. Just because you say today “Oh, maybe we won’t do this after all”, it does not mean everything's fine. The mass exodus of wealthy expats you see today can be directly traced to statements made by Government MPs in the House three to four years ago. You said it, they heard it and they made plans to do business elsewhere. They’re gone and they’re not coming back.
Internationally, in business circles, you’re viewed as corrupt and racist. Bermuda’s reputation, painstakingly built over 40 years prior to the PLP taking office, is badly possibly fatally damaged. Time will tell whether a new, more responsible Government can ever get new businesses to come here or whether you’ve messed it up for good. Bermudians better hope they can because we have precious little else going for us and if a new government can't turn this around, people are going to loose everything. Don’t believe me? Look at what happened in the Bahamas, Jamaica, Antigua, Grenada, and on and on and on. There’s lots of examples of what can happen if you just open your mind and look.)
So, what happens? The companies leave just enough staff here to satisfy whatever tax rules they are concerned with and move everybody else somewhere with a responsible Government, one that actually wants to create jobs instead of trying their best to destroy them. Good for them, bad for us. No US dollars coming in to pay for our food and everything else we import, no jobs, no work for tradesmen from the expat executives (or their landlords who now have an empty house they can’t rent and who won‘t be paying you to fix it up any time soon). This is a crisis of our own making, we are not just “victims of the global recession”, the business we do isn't even affected by the global recession particularly. If we'd taken care of our source of income (the international business companies face it, today this is our only meaningful source of US$), we probably would be sailing through this recession relatively unharmed, just like we did in all the previous ones. If Government hadn't spent itself into a huge hole, Government would be in a position to help those who were affected, instead of having to do things like close Sunshine League. Where exactly did all that money go anyway? Why exactly do we need $100,000 a year “consultants” more than the Sunshine League?
Bottom line: This is a problem created by Government, nobody else, although the BIU striking in support of drunken ferry drivers and bus drivers who refuse to take a drug test doesn’t help anything. Anybody in the BIU leadership, tell me this, would you want your child on a bus driven by somebody high on drugs? Drunk? On a ferry, same question? Get real.
City of Hamilton
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