Sustainability, ideology and platitudes

We appear to be starting on the right foot in our efforts to update our economic blueprint – ‘to sustain high economic growth and provide productive employment and effective social safety nets’. Likewise, we have the MDGs (Millennium Development Goals) that we must satisfy. The real challenge to us is: how to keep and meet the imperatives of sustainability without being blindsided by ideology and platitudes? Hence the need to focus like a laser? In the hierarchy of priorities sustainability is utmost, without it everything goes south, which explains our 40-50 years of marginal economic performance?

Focusing on sustainability without being distracted by ideology and platitudes would transform our economic blueprint . . . though imperfect . . . into a living, dynamic and expansive force; otherwise it could be undermined . . . and fizzle out? Because it is imperfect it would take negative hits – from interest groups – yet the trajectory would be upward as opposed to downward. In short, downsides can’t be eliminated – in an imperfect world – but a downward trajectory must be unacceptable, unless we would again invoke fatalism and rationalize our economic frailty?

An example of an unsustainable initiative is the US tax code. Its complexity allows the passion from both sides of the political aisle to win over reason. For instance, while housing in America has become a reality for majority of Americans, the law of diminishing returns has caught up with it – i.e., the implosion of the housing market owing to subprime loans packaged into exotic financial products and gobbled up by financial institutions across continents – and triggered the collapse of the global financial system. The UK, likewise a rich nation, does not have a similar tax provision on mortgage exemptions yet have the same level of homeownership.

The Bush tax cut – which yielded the opposite outcome – was bandied as affordable and a positive for the economy because it would encourage investment, post the Clinton presidency when the government had a surplus. But underneath it is the ideology of less government, i.e., force the cut in federal spending by taking away revenues within reach of Washington, Congress and the White House. ‘Less government’ responds to rabblerousing- or passion-politics even when ‘optimum government’ is the smarter choice, e.g., smart regulations. But it requires leadership-politics and man’s passion, unfortunately, is stronger than his reason.

There are natural laws that can’t be engineered despite the application of mathematics or Alan Greenspan’s denial – that the prolonged low-interest rate regime did the economy no harm? We, Filipinos, have had poverty for decades; we won’t engineer and overcome poverty over the short-term, thus have to focus on driving sustainability, starting with stepped up investments and the pursuit of competitiveness?

Marketers fight the law of diminishing returns by definition, its reason for being. But they don’t simply deal with mathematics but with the creation of tangible products with discernible characteristics that consumers could adjudge beneficial from a rational, emotional and/or experiential standpoint. Thus, old products that grow tired could be ‘engineered’ but via specific concrete efforts – a disciplined approach and a commitment to competitiveness.

Unfortunately, we may bow to ‘passion’ when ‘reason’ is called for and seek ‘sophistication’ when ‘simple’ is demanded? For example, ‘consumerism’ lumps all and sundry when man’s superiority is meant for creative and productive pursuits thus his wellbeing – in this day and age neither the horse-back nor the snail-mail is preferred? Similarly, our meager investment levels won’t allow us to move the economy forward – from erecting basic infrastructure to pursuing competitiveness, i.e., source and/or develop the technology and talent to drive innovation in products and services and tap a wider market, and thus dramatically raise the nation’s revenues or GDP on a sustained basis? Absent clarity and congruence of economic drivers means we’re simply riding a carousel, neither here nor there?

We owe it to ourselves not to be blindsided by ideology or platitudes, when we’re starting to push and focus on sustainability? And we can’t allow the pessimistic view – that passion wins over reason – to cast our destiny in stone, an impoverish nation? And no one can want a decent, virtuous economy more than we do ourselves?