Anecdotal evidence that the economy really is overheating
Anecdotally, it looks as if inflation is out of control in Bermuda. I rarely shop, but in the past two weeks, I have run into:
• A bag of Maltesers chocolates that retails for £1.25 ($2.50) in the UK, for sale in St. George's at $9.50;
• A medium-sized tube of Sensodyne toothpaste for sale in Hamilton at $11.40;
• In the surest sign of gouging, a box of Cheez-It party mix, a snack food, for sale in a supermarket at the East End with two price tags on it, one stuck over the other. The one underneath carried the old price, $3.99. The price I paid, on the label stuck on top, was $4.53. Marking up the price of existing stock is illegal in some economies.
Further, although I buy more or less the same groceries every week, they usually run $80-plus and have never exceeded $100. This week, the two and a half bags of groceries cost me $101.24.
Oh, and despite my turning off three of the four major electrical devices in use at my house, my electric bill for January jumped by about 10 percent. Had I not turned off the fans and cut my use of the water heater to about 20 minutes a day, I expect the bill would have doubled.
You can't run an economy on anecdotal evidence, so the Bermuda Government's Department of Statistics operates a methodical system of calculating price increases. Its most recent pronouncement on inflation said: "Consumers paid 3.6 percent more in December 2007 than they did a year ago for the basket of goods and services included in the Consumer Price Index (CPI). This rate of inflation abated from the 19-year high of 4.8 percent measured in November 2007."
I have no reason to doubt the work of the Statistics Department, which is a highly efficient and useful operation. The disconnect between their findings and my experience is that their basket of goods and services is not the same as mine. Nor could it be. This is not criticism.
But when retailers start sticking new, higher price labels over old ones, it's usually a sure sign that the economy is overheating and economic danger lies ahead.
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The Bermuda Government is not the only one trying to rid itself of pesky foreign workers, and in so doing threatening the very lifeblood of its economy. The British have decided to introduce new taxes on foreign workers. Under existing British regulation, those born abroad can claim "non-domicile" status and pay tax only on money brought to Britain or earned there. (Many other countries tax such people on their world-wide income.)
From April 6, "non-doms" will pay a £30,000 ($60,000) annual charge after seven years for living in Britain, and face a raft of new rules preventing them bringing money earned outside the UK into the country.
"Fears are growing that the planned tax crackdown will hit American workers hardest and drive other key foreign workers out of the UK's financial services industry — now the country's most important single industry, accounting for 25 percent of the Treasury's corporate tax take," said The Daily Telegraph.
Scott Simpson, a partner at Skadden, Arps, Slate Meagher & Flom, an American law firm with substantial UK operations, said: "We know that some of our lawyers are already asking about relocating outside of the UK, and it may be more difficult to recruit other lawyers. From a broader perspective, you could be seriously undermining London's key role as a world financial centre, which it has achieved with the help of the expat community."
Sound familiar?
How about this: "Jonathan Taylor, director general of the London Investment Banking Association, said: 'The more senior you go, the more prevalent foreigners are. In some large firms, 60 percent of people in senior executive functions are non-British'."
Anything I might have to say on that subject would already be obvious to you.
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You probably know that, in the Chinese calendar, the Year of the Rat recently began. It happens every year: I'm still writing the Year of the Tiger on my cheques.
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Today is a special occasion for me. It marks the completion of 25 years since my first appearance in print in Bermuda, a Festival review on February 17, 1983.
Following a few more reviews, my words began to appear as "The Kid and His Music" in the Mid-Ocean News, a gig I held on a weekly basis for most of the following two decades. (I was the child holding a candy cigarette in the photo that ran with the column.) From time to time, I wrote as Sal Paradise, also in the Mid-Ocean. (It was one of the noms de plume adopted by Jack Kerouac). I also wrote opinion as A. Freeman in the Mid-Ocean for a few years.
In 1993, I joined the Mid-Ocean full-time, for a four-year job as a news reporter. At the same time, when RG Magazine started, my last-page humour articles began to appear. Since 1997, I have written extensively in Bermuda, as well as for BusinessWeek, The Economist, Risk & Insurance and about 50 other publications, as well as writing books.
This column began in July 2005 and I have made other, irregular appearances in the Gazette for the past several years.
Since I was a cigarette-toting child, all I have ever really wanted to do is to write. I wrote novels when I was 13, 18 and 42, all of which were stunningly bad. Nothing daunted, I veered into non-fiction, and Bermuda has subsequently allowed me to earn a living as a writer for more than 20 years. Life's a curious thing. I set out to change the way one person thought about one subject by one degree. It turns out that the person whose life I changed the most was my own.
Bermuda: thank you, thank you, thank you.
