Another thumbs-up for Richards
The book written by former finance minister Bob Richards, Bermuda - Back from the Brink, is an interesting read. Richards suffered politically because he was often considered as talking down to people. However, he did what some may consider as uncharacteristic. The book is easy reading: in talking about complex, economic issues, he does so in a style that most should be able to comprehend.
His grasp of Bermuda’s economic development comes over very clearly as he speaks of the unparalleled history of Bermuda and its key role in both the development and military security of the Americas and the West. His analysis of the near and present economic saga again shows his understanding of all the real factors that led the country to its former prosperity, then to experience possibly one of its worst economic downturns - I may insert, similar to the 17th-century collapse of Bermuda tobacco production.
The truth is both the private and public sector lost and Bermudians experienced the effects of a “double whammy”. He chronicles the Government’s involvement and lack of preparedness and foresight, and does so critically. In fairness, he also slammed the banks for their unwise lending, which increased our risk and generated a bubble that did burst.
It would have been intellectually honest for him to say in clear terms that the entire generation of economic leadership had a hand in steering the country to the brink; not the Progressive Labour Party alone.
They all failed. Yup, the long-established Trimingham’s is gone, Bank of Bermuda is gone, Butterfield Bank almost went but for the buttressing by the already-broke government. I have some friends who were sucking on the dividends of shares worth $14 million who lamented they lost almost everything and now own shares worth just a few million in value with no dividends. Hence the title of the book is suspect. “Bermuda - Stuck on the Edge of the Cliff” might be more appropriate.
The only sector that will bring Bermuda back from the brink is the private sector. We cannot cut our way towards success. Even a balanced budget does not mean success, in particular if it means without growth - the standard and quality of life simply goes down for everyone.
If the former finance minister was not as brilliant as he has shown, there would be an excuse as to why he does not connect the dots between the billions of dollars of cash that flowed into the country over the past 40 years and the disproportion of wealth in the community.
He throws his hands in the air and rightly says we have no control of the sources of inflowing revenue, ie, international business and tourism. However, doesn’t he know we did have control over where much of that influx of cash went?
It was no accident that all of the western portion of Hamilton, including parts outside the city limits, was built up, while North Street and that portion of the city remained derelict.
It was no accident that from the 1970s to close to the turn of the millennium, there was a category called grade A, B or C contractor and only four companies met grade A.
The former finance minister reveals his social dissonance in not recognising the role of policy, or lack thereof, and its effect on where the inbound cash goes and therefore who it affects. Naturally, one of the benefits of the One Bermuda Alliance’s 2012 election victory was the return of confidence and to his credit, with firmness and discipline, Richards curbed government tendency towards excess and prevented a seemingly assured crash.
We are not back from the brink and will not be until there is a resurgence in the economy. The much vaunted “third pillar” is needed to stimulate growth. The existing economic pillars show no indications of growth and, given the new US tax law, we would be cutting off our own toes if we tried to squeeze any more tax out of them at this particular time.
I would recommend the book to everyone; it was a good effort as a first book written by Bob Richards. He should continue to write, but next time, given he has retired, completely throw away his political hat and write critically to the facts as he sees them.