The Tribune

EDITOR, The Tribune.

The Bahamas has just celebrated 50 years independence.

In 50 years, we claim to have advanced greatly, if we strip away the technology, we would see we have regressed in many areas or we are at a standstill and marking time.

Let’s start out today by observing the money illusion.

What is money illusion? When people look at the value of their money and think it still holds the same purchasing power because the dollar value still remains strong, but the purchasing power has decimated due to inflation.

Now let us look at what is the cost of this purchasing power being destroyed and the cost of inflation.

The people in the 1960s and 70s all could take 25 cents to school for lunch and buy breakfast and lunch in those days.

What has changed from then to now? Governments have changed, they’re responsible for this money illusion imported inflation (that we sit and do nothing about to offset it) and the home-grown inflation that has been crippling our economy.

There is multiple ways to create inflation, but the two main ways inflation is created is, too much money chasing too few goods which causes push cost inflation.

This creates an atmosphere for short supply and great demands.

This produces an auction type atmosphere for customers and in their absence, the entrepreneurs can allow the price to remain the same or increase it depending on the demand for the product, which is demand pull inflation.

The next way is built in inflation, this caused when the price of goods and wages are inflated because of government interference.

When the government says we will force more money out of the pockets of the people through taxation the entrepreneurs pass this tax onto the consumer of their products.

Wage increases are only used to try and pass the responsibility onto entrepreneurs while getting more taxes from salaries and then saying they (government) did a good job with tax collections.

Governments have little to no regard when spending others money (the public purse) but become very conservative with their own money.

They would promote nepotism (benefiting relative, associates and friends at our expense).

They promote lobbyism (private establishments and people from using money or something of leverage to assist aspiring politicians or already sitting politicians to receive special interest favors in return).

Cronyism (the appointment of special people who are close to them to do work in areas they’re not certified or qualified for).

All of this is at the expense of the public purse.

They then penalise entrepreneurs by saying the workers need a raise because the cost of living went up.

When the role of a government should be one to put infrastructure in place to allow the private sector to thrive independent of government interference and bring the cost of living down to accommodate the current wages that are being paid out.

Because after all the government past and present is the problem.

This is why inflation is the way it is today thanks to governments past and present.

This what has weakened your purchasing power and what you once got in the stores for fifty cent is now five dollars plus, the buying power has been destroyed, say thank you to the governments past and present.

The Bahamian Tycoon

December 17, 2023