ultranomics

9th November 2008

Welcome dearest readers to Ultranomics

This will be the first edition – hopefully the first of many – of your newest and shrewdest viewsletter covering the economic situation both here in the U.K. as well as back in the Homeland of Pakistan.

Why Pakistan of all the places in the world and what the heck does Ultranomics mean you might enquire?

The answer to the first question is that we, your two co-editors that is, happen to be Brit-Paks (or EuroPaks if you’re pro-European Union and into milk cartons) and thought that it was about time we stopped our idle armchair commentating and actually put our points of view out there.

As for the name Ultranomics – well we made it up, so it never existed before – a bit like this website. But you could say its a concatenation of ‘Ultra’ and ‘Economics’ and in that there may be something to ponder for minds that like to ponder on such things. We don’t mind admitting to being somewhat impressed by the renowned American economist Steven Levitt who wrote the ground-breaking book Freakonomics. Its possible that subconsciously we picked up some inspiration from his work (but we’re not admitting to it)!

So folks, we’re going to don our thinking caps, dust off our wrist-rests and pretend for a while to know how and why the world ticks for us as it does. At least we’ll do our best in any case……bearing in mind that we’re not so pompous as to believe that the true workings of the gears of humanity versus Mother Nature are fathomable. Heck even the bankers, the ’stewards’ of our wealth never saw Mother Nature coming! But you’d better believe that she can’t be scammed for too long a time. In the long term Nature, for example in the guise of the markets, rewards us not with what we think we need or desire, but ultimately with what we deserve. We can only get away with risky speculation for so long. In the end the chickens always come home to roost.

Take those central banker’s, i.e. the Alan Greenspans of the world, who must truly have believed that they could simply print as much paper money as they liked to keep their ‘borrow,borrow,borrow’ and ’spend,spend,spend’ economies (B.S.economies!) afloat.

But dear readers this was literally money made out of thin air, not backed by a country’s hard assets or economic output. It was easy money and, whenever you pump easy money into a monetary system in simple terms you tend to get inflationary bubbles, such as the dotcom bubble of 2000 and of course the house price bubble that just went pop in the western world this year (2008). When the bubbles go pop the assets lose their inflated values. In the case of US housing they’re talking about a loss of housing ‘wealth’ in the order of $6-8 trillion – or thereabouts, give a trillion or two (who’s really counting and what does a trillion actually look like anyway???). That could amount to an average of $120,000 per US householder. But of course what everyone’s losing never existed in the first place. Those phoney paper notes printed by the US Federal Reserve have gone back to where they came from, thin air!

Anyway, you get our gist don’t you? There’s a lot under the surface that we’d like to talk about and if you bear with us, we hope to tell it to you in an entertaining a way as possible. It might take a week or two to get into our groove, but check back often and see how we’re progressing. Better still, go ahead and subscribe to our RSS feed or sign up to our regular ultraletter email. We value privacy so it goes without saying that your email address will never get past our website and of course you can unsubscribe at any time. We thank you in advance for your time and brains and hope we can imprint some interesting ideas into them.

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Hey readers, your humble co-editor jq has some pet hates to rant about too….

Pakistan – Some Core Issues

9th November 2008, JQ (co-editor)

I had always promised myself to be the beacon of righteousness in the face of all of the worlds’ wrongs but “home economics” always got the upper hand and until today did not not let me sort the socio-political world of real economics as Adam Smith would like to define. Well the good news [or bad depending upon which side of the scale you are on] is that the genie is now finally let loose by the thought police to play havoc on all of you alternative readers who took time out to find us. I say alternative because like TK mentioned we are different and want to present unique out of the box and possibly witty debate about the ultra problems at hand. So welcome to the ultranomics way of thinking.

I would start with some moans and groans to set the temperament! Then in the coming days we will look at possible resolutions to the ongoing painful points of Asian Economics (particularly in Pakistan) through the “common sense” approach. They say that common sense is very uncommon and honestly speaking not many brain cells seem to have been used so far otherwise Pakistan would not be in the current mess and would not still be banded among the third world countries, even though it is an atomic power.

The basic needs of a human being in today’s world can be summarised under the headings of food, shelter, power, health, safety, communication and transportation. Now if you live in Pakistan please look around and honestly answer as to how many of the population has access to all of these let alone a single one! Pakistan was created “60” long years ago and so far we don’t even have a proper international airport for the capital Islamabad and still are using the old Pakistan Airforce site.

It is shameful that being an agricultural country we are struggling to feed our own people, who in some cases are now forced to sell their own children in order just to get by and pay the bills. What happened to the Muslim Caliphates’ philosophy of being responsible for feeding even the single stray dog? George Orwell wrote: “All men are equal, but some are more equal than others.” I guess this stands true for the people in the driving seats of our poor country Pakistan’s throne who travel in expensive, third-world -country-budget-busting, lush bullet proof cars and eat lavish meals in comparison to a common Pakistani man who is struggling to pay his bills and only striving for daily grub so tell me how can we send a mission to the moon like India did, can anyone answer? Anyone from Suparco!

The Planning Commission of Pakistan believes that around 35 per cent of the Pakistani population are falling below the poverty line while the Pakistan Finance Ministry estimates only 22.3 per cent in accordance with the latest official survey [really have you ever seen a surveyor outside your door?]. This controversy if not resolved immediately, could potentially block the World Bank loan worth $500 million for Pakistan [I thought we had broken the so called kashkol] under the Poverty Reduction Strategy Credit (PRSC), which is desperately required to improve the depleting foreign currency reserves of Pakistan. Under the World Bank conditions Pakistan will have to prepare the PRSP setting targets to reduce the prevalence of poverty and establishing social safety nets in order to obtain a credit line of $500 million from the PRSC. The Finance Ministry is preparing the PRSP document for presenting to a visiting mission of the World Bank but is clueless about which figure is the official line. This really is mind boggling because if we cannot even get our statistics right then how are we supposed to plan our future. What happened to the professional norms and attitudes of the civil servants?

Why do all of the Pakistani roads have to be rebuilt every year? [I have to say the Pakistan motorway is an exception - credit where credit's due]. This is fuelled only by the kickback culture. Call it potato, call it potaato – the word though is “bribe” and will lead to hell fire. We will never know the real reasons why the Karachi bypass fell within days of its opening killing dozens of innocent civilians, so who will pay for their blood and the misery of near and dear ones? Can you put a price tag on anyone’s life? Can you price your own life’s worth?

We were taught in school that the essence of democracy is that it is for the people, by the people and of the people, it is the separation of powers between the executive, legislative, and the judiciary with all of them being independent of each other. In Pakistan no such arrangement exists so far. The Chief Justice of Pakistan Iftikhar Mohammad Chaudhary is a case in point who has yet to get any justice, so does a common Pakistani stand any chance of fairness in his trials?

Though it is true that states such as Pakistan with a weak economy and weaker political structure cannot hope to safeguard their sovereignty from arrogant superpowers such as the US, most Pakistanis still expect their rulers and armies to make a real effort toward this end instead of making hollow claims and raising false hopes [once is enough in 1971 war]. With such low credibility the ruling elite cannot hoodwink the people who now, thanks to the communication revolution and open access to the world media, are much more informed and enlightened and should not be taken for granted because they are able to fully grasp any given situation and arrive at intelligent decisions. We really need to take heed from the strong reaction of Syria’s President Bashar al-Assad’s government, which described the killing of eight Syrians in the attack as a “cold-blooded war crime”, demanded an apology and warned of consequences. With week knees if Pakistan cannot even stop its so called “allies” from attacking its borders then how are the Pakistanis going to get some favourable decision on the good old Kashmir issue?

Questions, questions and more questions! I will end this first journal perhaps for you to ponder and will touch all of the above and more Pakistan and Asian core issues, however my aim is to discuss a way forward and eventually suggest some solutions, yes solutions because we all know the problems by now and its time to get rid of them for good.

jq@ultranomics.com

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