Can't-miss Quotes: Home away from Home

Andrew: I’m not sure that I have additional family responsibilities. Certainly I have different responsibilities. In Australia, my wife and I played an equal part in caring for our two children and doing those domestic duties that are a normal part of life back home: cooking, cleaning, gardening, wrestling crocodiles, that kind of thing. In Manila, we do domestic work rarely, and never wrestle crocodiles. We do, however, spend a lot of quality time with the children, who despite our over-parenting and their privileged place in the world have turned out to be pleasingly caring and marvelously interesting little homo sapiens. We have a lot of fun together, or at least we did until my daughter turned 11 and decided that Dads in general and her Dad in particular are definitely not cool. Perhaps my biggest family responsibility right now is embarrassing her in front of her uber-cool friends.



Andrew: My children are 11 and 9. They're still young enough to think that I’m mostly alright and not a bad guy to hang around with. Even my daughter will admit to that when her friends have gone home. They’ll learn soon enough how wrong they are but for the time being their ignorance is my bliss because it means I get to spend a lot of time with them. It means I also have to pretend to like computer games. And listen to their music. I think there’s a reasonable case to be made for placing One Direction on a human rights watch list. In their defense, the children are forced to listen to me play Bob Dylan songs on guitar, so I guess we’re even.

I attend all of the children’s key events at school. Not through choice. Their Mum says I have to.


Source: Enjoying home away from home

Aug 28, 2013 

Correcting Historical Errors 1: The Election Results from 2004

This is the top portion of the page. I added the two paragraphs below: 

The only post-People Power Revolution presidential election where the winner of the Corridor failed to win nationally was Fernando Poe, Jr. in 2004. In the thirteen provinces/regions of the corridor (Aurora, Bataan, Batangas, Bulacan, Cavite, Laguna, Metro Manila, Nueva Ecija, Pampanga, Quezon, Rizal, Tarlac and Zambales), Poe won 40.8% of the total votes cast, or 4.65 million votes, 1.32 million more than did Gloria Macapagal-Arroyo, who won 29.2% or 3.33 million. However, GMA more than made up for this deficit in the Visayas. In the 15 provinces (Aklan, Antique, Biliran,Bohol, Capiz, Cebu, Eastern Samar, Guimaras, Iloilo, Leyte, Negros Occidental, Negros Oriental, Northern Samar, Samar and Southern Leyte) of Western, Central and Eastern Visayas, GMA won a staggering 61% or 3.6 million votes, versus only 27% or 1.6 million votes, an insurmountable wave of more than 2 million votes. (In Cebu alone, GMA won just under a million votes or 79.9% of the total, opening up an 842,531 vote lead.) Adding the Visayas results to the Corridor tally, GMA led with 697,039 votes.

Alleged cheating and vote-tampering in the Autonomous Region in Muslim Mindanao does not negate this result. Official results from the five provinces of ARMM plus Sultan Kudarat and Isabela City, Basilan, show that GMA won 685,076 votes there. Even if GMA did not win a single vote in ARMM and all of these 685,076 votes were given to Poe, it would still fall short of the 697,000-vote defeat of the Corridor by the Visayas. (From Wikipedia)

Potshots at the RH Bill

After much deliberation, I have come to the following conclusions regarding the RH bill

1. The proposition that a developing country needs population control to improve its standard of living flies in the face of economic theory, empirical evidence, and basic common sense. The only thing that population control achieves is (imperfect) population control. The only thing that China’s one-child policy has brought is death – death and its consequences.

2. However, the educational system has the obligation to inform those who pass through the schools of the truth and science of human reproduction. When I was in Grade Six, our class was taught the human reproductive system, after being taught the respiratory system, the excretory system and all other basic aspects of the human anatomy. Note that this was in a private school run by Catholic nuns of the Religious of the Virgin Mary. Of course, hissing and catcalls ensued in the classroom, but that happens every time the reproductive system is discussed. I think public-school students should also get the same access to information starting at the same age. (Naturally, in high school, more detail was given in class – and this was in another Catholic school, this time run by Jesuits.) This should be the venue for such questions as, “Is it true that you don’t get pregnant if you do it standing up?” or “If I drink Seven-Up before and after sex, I wouldn’t get pregnant, right?” and all other stupidities. 

3. It is a disgrace that three billion pesos per year are being earmarked for the purchase of condoms and birth-control pills, as a “tool” to combat poverty through improved health care. How do we know that the purchase of prophylactics and birth-control pills is not the solution to better health? Because it could be the purchase of tuberculosis medicines. Or it could be the purchase of anti-cancer medicines. Or it could be the purchase of MRI machines or CT scan equipment for government hospitals. Or it could be the purchase of food, of antibiotics, of a thousand other things that are bankrupting the working relatives of a sick family member. Looking only at poverty of health, three billion pesos go a long way towards the well-being of sick and healthy family members alike. The sick don’t have to rot in government hospitals, while the healthy are free to purchase food and shelter and clothing and other things that keep the economy afloat. 

4. Nobody ever thought of telling Dolphy or Ramon Revilla Sr. or Joseph Estrada that they should have had fewer children. This is a powerful reminder that what matters is NOT the number of your children – it is the number of your panganay. Just kidding. What matters is not quantity, but quality. If you have only one child but you like to spend your time drinking alcohol, there is little doubt that your family will end up miserable. If you have 77 children and yet you work hard (etc.), you will end up having your children follow you in the movies and in the Senate. Poverty is independent of the number of children. 

5. The number of children is also independent of the number of prophylactics you distribute. I know of some guys who will never, never wear a condom, for a variety of personal reasons. More information will not sway them: they have Master’s and other post-graduate degrees already. This is another reminder that an obsession with artificial contraception all too often forgets the human element. The creation of life involves a relationship – always imperfect and sometimes a dangerous and “transactional” relationship – between two people. If you want to make them stop having more babies, make that relationship less mechanical and more human. 

6. All this population control madness emits an Orwellian stench in its logic. If you want to improve life by stopping the formation of life . . . well, first, stop to think about that. 

7. I have not yet heard of a non-ad-hominem argument in favor of the RH Bill. Do you know Lucy Torres? She’s against the Bill, and she’s very articulate. Care to match her point for point? 

8. To sum up, the RH bill is right to spread information, wrong to spend money, and just about in the middle of dividing Filipinos against each other. Unlike Noynoy, who is wrong on everything. 

Are my ideas simply bad?

For the past month or so, a single thought (other than Darwinism, that is) has kept creeping into my mind. I don't remember exactly the moment when this thought first came up. 

It might have been while I was writing my previous blog post, during which I found, to my surprise, that The Intercollegiate Review was a journal that admitted only essays that advanced conservative thought. To my naive mind, thought -- the product of honest thinking and not of self-deception -- is neither of the left nor of the right; it just is, objective and transcendent, and while reasonable people can disagree on many things, they will, all of them, reach substantially the same conclusion if their reasoning is honest. 

Or, it might have been as I was reading a Bloomberg View column by Peter Orszag, the illustrious former Director of the Office of Management and Budget in the Obama Administration, attacking as a "mirage" the reputed savings from Medicaid reform through competitive bidding. "Demoralized" is the word I would use to describe my feelings when I read that article. It turns out that introducing more competition to health-care provision will result in higher, not lower, costs to the taxpayer. Fortunately, my feelings were rehabilitated when The Wall Street Journal posted a rebuttal shortly afterwards, saying that the alternative to competition is "coercion" and that for the sake of individual liberty and historical fealty, let us please try competition because those cost estimates are just that: estimates. 

Or, it might have been while I was brushing my teeth, or shortly before actually doing so, when I usually look at myself in the mirror and practice a speech, this time in response to some provocative leftist rant. The Republicans are out to destroy the welfare state and leave poor people without the social safety net they have depended on for almost half a century, the Democrats say. Well I say: Medicare and Medicaid will be bankrupt within ten years if left as they are, and President Obama has responded only with demagoguery. 

But people -- opinion-makers and leader-writers throughout cyberspace -- have kept on defending Obama. Where are "my people" anyway, the ones who would advance my argument and defend my position? We need to do our arguing fast and quick, yet people are missing!

And then it hit me: What if the brightest people, the most articulate people, the most respectable people are just not on my side? What if the ideas that I follow command respect only among people from the "other schools"? Does it mean that once you get into an Ivy League school, you automatically advocate leftist causes and lose your conservative bearings? Are my ideas simply ... bad? 

A quick look at the most prominent conservative columnists today seems to indicate otherwise. 

We can observe that while the conservatives don't have the summa cum laudes and Nobel Prizes in their camp (unless you count Milton Friedman and Friedrich von Hayek, but let's leave that for another day, because then you'll have to count Paul Samuelson in and go on and on and on interminably), only the New York Times columnist David Brooks escapes the Ivy League filter. 

But moving along to the shaded rows, we see that the politicians (Elizabeth Warren is an aspiring politician) are different on each side. Where is Eureka College, anyway? 

Perhaps this listing, which cannot be creditably called a "sample," is distorted by the presence of the Clintons of Yale University, but it is noteworthy that although G. W. Bush had degrees from Harvard and Yale (and was the first President with an MBA degree), he was often mocked for his intellectual ability, or lack thereof -- he was "the Decider," he said, not the thinker. 

What this simplistic table tells us is that the liberals do not have a monopoly on high academic honors. True, it does not distinguish between the merely liberal from the Leftist agitators on stage during the 2012 Democratic National Convention. But it is clear that the politicians on the left have higher academic credentials than those on the right. What then? 

Perhaps this trend of conservative intellectuals remaining in academia or journalism and liberal/socialist thinkers thriving in politics reflects the conservative taste for division of labour: the politicians do their work, the writers theirs, and the judges remain judges. 

But the striking implication is that compromise is more possible with the politicians of the right than with those of the left. When politicians of the left advocate more empathy, they are not constrained by political realities. They have ideas, and then use politics to see those ideas realized and implemented. They are thinkers first, politicians second. 

By contrast, the politicians of the right are politicians first, thinkers second. Anything that can advance a political goal will have primacy over policy prescriptions. But the obverse of this coin is that even if a policy is not entirely "conservative" in character, the rightist politicians can accept it if a substantial number of their constituencies will benefit from it. 

This conclusion is ironic and perhaps unacceptable to those whose image of the Republican Party is molded by Sarah Palin's tea party. To counteract this image properly, one needs to write an academic thesis or a book, filled with examples and illustrated with charts. But just to avoid leaving readers hanging, allow me to generalize. 

The Democrats want to increase spending on health care, on fiscal stimulus, on the automobile industry, and on a host of other things to stimulate economic activity. The Republicans want to decrease spending in order to contain government debt. On the surface, the Republicans are guided by their textbooks: The Road to Serfdom by Hayek, and Atlas Shrugged by Ayn Rand; the Democrats just want to reduce unemployment. So far, in the practicality contest, the Democrats run away with the prize. 

But let us look at the constituencies that benefit from the competing policies. The Democrats' core voters are the minorities (but the Latinos will soon be the majority), gays and single people or childless couples in urban areas. Their lifestyle virtually demands empathy, and to them will flow, almost exclusively, the benefits of this Democratic orientation. On the other hand, the Republicans have their eye on the taxpayer and on their tax dollars ... in short, on everybody.

And from that word -- "everybody" -- stems our final conclusion. The Republicans are the managers; they govern, and when you govern you will see that you need to bear in mind the interests of as many groups of people as possible. None is broader than the category "taxpayer". Empathy is good, but who will pay for it? 

Now: which group is more practical, the left or the right? Can't bad policy come from a good idea?

Dealing With Darwin

If there is one idea or theory that has kept me thinking these past few months, it is Darwinism. Today I shall write about it. 

You see, a few years ago, I came across a book entitled Doctors of Modernity: Darwin, Marx and Freud, by R. F. Baum. I found it in the Rizal Library at the Ateneo, and read it in a corner out of sheer curiosity. What I found there has burned in my mind for the past eight years. 

In the book, the author lays out, in lucid words and elegant phrases, the thought that underlies each thinker's work, thereby defining each "ism" derived from that thinker's name: Darwinism, Marxism, Freudism. 

After this summary and delineation, the author then shows, in rigorously argued logic, that each of these theories constitute a fundamental denigration of humanity, a rejection of human dignity, and a denial of what can properly be called "mind".

I cannot relate here what is written in that book because after borrowing it for a couple of weeks I was forced to return it, and I have never mustered enough energy and determination to buy a copy online. Suffice it to say that the book exists more in my memory than in my bookshelf. 

And all the more alive for that. Every moment I spend thinking about books in general, every trip to the bookstore -- now with my little girl and my loving wife in tow -- reminds me of what I have read and reignites the joy of that experience. 

There is a unique and irreplaceable delight in spending time with my wife and daughter, but that feeling and the distance of years have not dimmed the vividness of Baum's argument: that man is more than a host of repressed feelings, a worker trying to improve the means of production, an animal struggling to survive. Man has a mind of his own, and that distinction elevates him to dignity and truth. 

There is this longing in me to read the book again, to find in his words the reassuring logic to counter the pervasive chaos of today's political and cultural conversation. This year is election year in the United States, and in the Philippines there has been no shortage of political controversy in the past seven years. But today I have a family to care for -- and that heightens my desire to strengthen my values through example and logical argument. Example I can show every day. But the logic? 

I had to find that book. My search led me to this article in The Intercollegiate Review (Fall, 1975), entitled, "Coming to Grips with Darwin." The author is R. F. Baum. 

It turns out that this article was the precursor to the book. It contained the ideas and arguments I had earlier found amplified and discussed in a more leisurely manner in Doctors of Modernity: I had found what I was looking for. 

From that time on, I have wanted to say something about the article. I have wanted to apply its ideas and arguments to current issues. So far, I have been unsuccessful: I have not found the issue. But today, I have found the energy to force the issue.

And so, lacking anyone to respond to, I have decided to engage myself in the discussion. I have decided that, since no one has provoked me to discuss Darwinism, I shall just provoke myself. 

The way I will go about it is through a question-and-answer format. I will imagine an interlocutor, say, in a panel interview on live TV, asking me about my views on Darwin. This is how the interview goes: 

INTERVIEWER: This year marks the 130th year since the death of Charles Darwin and today we reflect on the impact that his work on evolutionary biology has had on human knowledge in general. He is important enough that his likeness is found on postage stamps and currencies, but what is the legacy of Charles Darwin? 
     Here in the studio, I am joined by TheEconomizer, whose credentials to appear on this program are entirely imaginary. 
     Welcome to the program.

TheEconomizer: Thank you. 

I: So, I hear you don't believe in Darwin. 

TE: If you really know what Darwin wrote, you wouldn't be so quick to idolize him. 

I: Wait. You don't believe in evolution? 

TE: Yes, of course, I believe in evolution! But whatever else may be said about evolution, or natural selection, or the origin of species, I will always believe that man is more than just an animal struggling to survive, that life is more than just survival. Man has a mind of his own, and that distinction elevates him to the realm of dignity and truth. 

I: Hold on a minute. Darwin wrote about evolution and the origin of species -- in other words, about biology. What you've said seems far removed from science. 

TE: Let us first be clear about what Darwin wrote and argued. I will let R. F. Baum in his article for The Intercollegiate Review, "Coming to Grips with Darwin", speak about it. He wrote: "Darwin provided, not the idea of evolution, nor even the basic concept of natural selection, but instead the idea that evolution occurred by means of that last ... 'The Origin of Species By Means of Natural Selection', as Darwin phrased his idea in his book's title, was Darwin's actual contribution."

I: So if that was the only thing that Darwin brought forward in argument, why has there been so much controversy over the past hundred and fifty years? 

TE: It is because of the implications of his idea. Natural selection had earlier emerged as an empirical observation. Scientists had collected evidence that less useful traits in earlier organisms had been eliminated from later samples of the same species. Features and characteristics that hindered survival, or at least did not improve the chances of survival, of individual species were pruned or "outgrown" (quote, end quote). For instance, giraffes tended to pass on the genes for longer necks, not shorter necks, to their offspring.

Again according to Baum, "Darwin reasoned that in the consequent struggle for survival those individuals who were blessed with useful variations from their species' norms had the best chance to survive and reproduce. From this it seemed to him to follow that useful variations would accumulate, develop further over successive generations, and gradually result in new and biologically superior species."

Now let us allow Darwin himself to speak in his own words. In the conclusion to the first edition (p. 490), Darwin wrote, "Thus, from the war of nature, from famine and death, the most exalted object which we are capable of conceiving, namely, the production of the higher animals, directly follows. There is grandeur in this view of life ..."

Therefore, Darwin believed that the "higher animals", including of course, human beings, derived their existence from a "war of nature"; that is, a struggle for survival. Man owes his existence to the violent elimination of his competitors for the earth's scarce resources.  That's why his idea was -- and still is -- controversial.

I: I don't understand. We all have to struggle to survive. Why is that a problem for you? Why is that controversial?

TE: To put it in current language, that is not the "be all and end all" of our existence. That is not all there is to life. Above all, we do not owe our existence to the struggle for existence. Otherwise, this means that I will only have life if I try to kill everyone else, since everyone else is a competitor for the earth's finite resources. 

I: But surely Darwin allowed for exceptions? We fight not only for our own survival that of our families as well ... ?

TE: That would go against Darwin's theory, because defending those with unfavorable characteristics or traits would "contaminate" (quote, end quote, my words) the genes that are going to be passed on to the next generation. Remember that, if we follow Darwin's logic closely, we were not created by God or by anyone, for that matter. Rather, we are here because we are survivors of a "war of nature". We owe our existence to the struggle for survival, we devote all our efforts towards that struggle, and we do not tolerate anything that might threaten that survival. Any other consideration simply cannot be taken seriously. 

I: But, surely, that misrepresents the Darwinian theory? After all, according to Robert Bannister, "Darwin himself insisted that social policy should not simply be guided by concepts of struggle and selection in nature."

TE: It is hardly an unfair or inaccurate description of Darwinism. If humans as a species arose out of the struggle for existence, does that not include our human mind? This means that our minds, and our reasoning faculty, derive from brute force, from cunning, from the desire and struggle to survive. That in turn means that the only purpose of the mind is to improve our chances of survival. 

To a large extent, that is true, but there can hardly be a more dangerous thing on earth than a mind solely dictated by the terms of survival. I don't know about you, but from my personal experience, my mind is free! Free to think about things that have nothing to do with survival. Free, indeed, to think of things that are inimical to survival, to the competition for resources. Such as: I would rather sleep on weekends rather than work and earn extra pay. Our mind transcends economic circumstance; in plain fact, our mind is not determined by economic interests, and that is why Darwinism is wrong. 

I: But what about the fact that today the "modern evolutionary synthesis" asserts that "All evolutionary phenomena can be explained in a way consistent with known genetic mechanisms and the observational evidence of naturalists," of which Darwin was unquestionably one. Doesn't this mean that the most updated scholarship supports and affirms Darwinism?

TE: Far from it. Saying that genetic mutation or genetic shuffling aids evolution is very, very far removed from saying that brute force, cunning, and survival in a "war of nature" give rise to new species. Moreover, it proves that it is not organisms themselves, by their very nature, and through natural selection, that gives rise to new species. Rather, it is mutation, which leads to and aids evolution. 

I: Why? How is mutation different from natural selection? Indeed, how different is natural selection from evolution?

TE: First, let us explain evolution. Evolution, according to Wikipedia, is the change in the inherited biological characteristics of populations over successive generations. In one sense, it describes the relationship between species: homo sapiens evolved from homo erectus. But for this discussion, evolution is first and foremost the process through which new species arise. That is why early evolutionists, including Charles Darwin's one-time teacher, Adam Sedgwick, kept asking the question: how did evolution occur? What caused evolution? 

This was Darwin's opening. He said, simply, that evolution was caused by natural selection: the pruning of unwanted physical characteristics, if done often and long enough, resulted in new species. 

But let us remember this: before any natural selection takes place, individual traits are already varied. If we eliminated all variations and kept all individuals of the same species with exactly the same physical traits, natural selection would have nothing to select. Therefore, natural selection is a process that chooses among variations. The question is: how did the variations come about?

That is a question no selection theory can answer. Today, at most what can be said is that natural selection eliminates unwanted traits -- it eliminates, but does not create, new species.

I: But what about mutation?

TE: This is my final point. Mutations are the source of the variations that I have mentioned. And what is the source of mutations? Nobody can say. The origin of species is the origin of variations, according to Samuel Butler. 

Darwinism, as well as Darwin, must stand or fall on the merits. The fact is its claims -- that species come into existence as a result of a "war of nature" and that organisms progress into better and higher forms -- are not supported by fact or logic. 

I: All right, thank you for your views. Let me turn to a real biologist ...

The Philippines: sulking child or mature young woman?

Below is the article by Dr. Benjamin Diokno regarding the loan to IMF made by the BSP. This blog post is The Economizer's response to this article. 

To lend or not to lend?

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Details

 

Published on Monday, 25 June 2012 00:00

Written by BENJAMIN DIOKNO

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‘Are we better off lending $1-billion to the IMF instead of using the same to help the national government finance its programs against joblessness, poverty, hunger, ignorance, and income inequality?’

That’s not the question. It’s a done deal. Malacanang --or is it Bangko Sentral ng Pilipinas? -- has already decided to extend US$1-billion loan to the International Monetary Fund (IMF) to support the debt-ridden, 17-nation euro zone. The question is whether that decision is intelligent, an act to impress the credit rating agencies, or simply incorrigible?

Those who favor the decision argue that “as a member of the global community of nations ...it is also in our interest to ensure economic and financial stability across the globe.” That’s Bangko Sentral ng Pilipinas Governor Tetangco’s argument, and I assume Aquino’s economic team concurs.

The argument is that by being a member of the 188-nation international financial organization, it carries with it the responsibility of sharing the burden of easing the pains of fellow member countries faced with financial difficulties. 

And then there’s the utang-na-loob rationalization for the loan. For near four decade and until 2006, the Philippines was a net borrower from the IMF. Now that the IMF needs help to raise a $430-billion rescue fund, it is our obligation to support the IMF by pledging a significant, not a token, amount. 

Of course, it assumes that the 40 or so years of IMF tutelage was truly helpful rather than distressing. In the past, whenever IMF lent money to the Philippines, the country had to put in place painful adjustment measures as conditions for the loans. Is the Philippines imposing the same harsh conditions on the IMF this time?

Those who are critical of the decision to lend, on the other hand, said the US$1-billion (approximately P43-billion) could be better used to expand the government’s programs to create jobs, alleviate poverty, and reduce hunger. Charity begins at home, they argue.

Some finance guys may ask: Why not use the $1 billion to retire expensive Philippine public debts? That would translate into smaller budget deficits in the future. 

Also, the critics can’t reconcile the decision to lend $1-billion to the IMF with the continuing propensity of the government to borrow money from abroad to fund its various social and economic programs and projects. The government has to borrow from the World Bank and the Asian Development Bank to fund its conditional cash transfer program. And it has to borrow money from various multilateral banks and bilateral sources to finance the much needed roads and bridges, airports and seaports projects.

Why lend and borrow at the same time? Looking at the issue from a purely financial standpoint, one might ask: Is the Philippine government getting better return on investment for its $1-billion loan to the IMF than what it is paying in interests for its loans from the World Bank, ADB, and other bilateral sources (China, Japan, and others)? 

Some big, fast-growing countries are contributing large amounts to the IMF’s $430-billion rescue fund. The BRICS --Brazil, Russia, India, China and South Africa-- countries pledged to loan $75 billion. China will contribute $43 billion, 10% of the total rescue fund. India, Russia, and Brazil will contribute $10 billion each, South Africa will make up for the rest. 

But these countries, except South Africa, ranked among the top 10 countries in the world in terms of foreign exchange reserves. China is top leader with $3.3 trillion, Russia ranked second with $510 million, Brazil ranked sixth with $374 million, and India ranked ninth with $294 million.

The Philippines, by contrast, ranked 26th, with $76.1-billion gross international reserves.

With China’s hefty reserves, its decision to lend IMF $43 billions appears reasonable. It is also consistent with China’s interest: the euro zone is China’s number one export destination. A hobbled, crawling Europe is not in China’s best interest.

On the other hand, other large countries, certainly much bigger than the Philippines in terms of gross international reserves, are not contributing to the rescue fund. How much is the US committing to the IMF rescue fund? The last time I looked it was zero. 

Won’t the weak euro zone be a drag on economic growth in the Philippines? Not so if we believe our own economic managers. But realistically, a weak Europe will sap the growth potential of the US, Asia and the rest of world. A slower global growth would no doubt affect the Philippines, but not in a big way, and especially if its fiscal policy is bolder and more expansionary. 

But assuming that the Philippines is obliged to contribute to the $430-billion IMF rescue fund, here are some other legitimate questions: Is the $1 billion contribution of the Philippine government small, big, or just right? Can we afford it? Don’t we have better use for it? Or are we just trying to impress the credit rating agencies in our quest for the elusive upgrade to investment grade?

I’m sure that the $1-billion won’t come from the national government. There is no provision for it in the 2012 budget. And putting it in the 2013 budget will most certainly face stiff opposition. The 1987 Philippine Constitution is clear: no money may be released from the Treasury without an appropriation made by law. 

Lending $1 billion (P43 billion) to the IMF goes against the grain for the famously austere President Aquino. He knows he faces large and increasing budgets in his remaining four years. The K+12 education program, the universal health care, the conditional cash transfer (CCT) program, the modernization of the armed forces, the rice sufficiency program, and the public infrastructure program have all huge budgetary requirements. Aquino also needs a large sum to give the agrarian reform program one final push.

Since it is not the national government that is funding the $1-billion loan to the IMF, then it must be the Bangko Sentral ng Pilipinas. But I’m sure BSP, on its own account, does not have that kind of money. BSP was a big loser in recent years -- in 2011, BSP lost P33.7 billion, and in 2010, another P59.0 billion. Even now, BSP is asking the national government for a sizable fund infusion.

As managers of public funds, present and future, our national leaders have to face the Filipino people and answer this difficult question: Are we better off lending $1-billion to the IMF instead of using the same to help the national government finance its programs against joblessness, poverty, hunger, ignorance, and income inequality?

***

Benjamin Diokno is professor of Economics at the School of Economics, University of the Philippines (Diliman). He was formerly secretary of budget and management in the Estrada Cabinet and undersecretary for budget operations in the Aquino 1 administration.

Dr. Diokno's article is pasted in full because The Economizer believes in giving the opposing side the full chance to advance his arguments, and to allow greater time to develop a response. After all, a truncated opposition will lead only to a stunted government. 


To begin, let us summarize the arguments. Dr. Diokno is saying: 

1. Because, when borrowing from the IMF in the past, the Philippines had to follow strict "structural adjustments" that reduced domestic spending and further eroded the government's ability to spend on education, health and anti-poverty programs, the Philippines should impose the same harsh conditions now;
2. Instead of lending $1 billion to the IMF, the BSP should have used to money for anti-poor programs within the Philippines ("charity begins at home"); an alternative is to use to money to retire Philippine government debt; 
3. Lending to the IMF does not sit well with the Philippines' availment of loans from the World Bank and the Asian Development Bank for infrastructure projects and for the US$400-million Conditional Cash Transfer Program; 
4. The Philippines' Gross International Reserves (GIR) are not as big as those of the other IMF contributors, and that the US is not even contributing; 
5. The weak euro-zone will not be a big drag on the Philippines anyway, "especially if [the country's] fiscal policy is bolder and more expansionary"; 
6. We are "just trying to impress the credit rating agencies in our quest for the elusive upgrade to investment grade" rating; 
7. The BSP is losing money and is "even now ... asking the national government for a sizable fund infusion" that the loan simply makes no sense. 

As we can see, Dr. Diokno puts forward seven arguments for not lending to the IMF -- and we seriously doubt if anyone else can raise another argument. If there are this many reasons not to lend, surely therefore we should NOT lend?


It turns out that this attack by sheer numbers suffers from the same defect that doomed all such attempts throughout history. Namely, you can always fight numbers with quality, and win most of the time. 


For it turns out that the GIR may not be used for any purpose other than to address imbalances in foreign payments and receipts. According to the BSP's SPEI glossary: 

Gross International Reserves (GIR) are foreign assets that are readily available to and controlled by the BSP for direct financing of payments imbalances and for managing the magnitude of such imbalances. GIR consists of holdings of gold, special drawing rights (SDR), foreign investments, and foreign exchange, including Reserve Position in the Fund (RPF). These assets are valued mark-to- market.

Nothing in this definition suggests that the Reserves may be used to fund government projects, or for any domestic purpose. Therefore, the suggestions that the $1 billion should have been used instead to retire Philippine government debt, or to pay for government anti-poverty programs, or to fund infrastructure projects, or to conduct an expansionary fiscal policy, or to pay for the operations and make whole the BSP's financial position, are -- to put it simply -- illegal. 


Therefore, in one fell swoop, Arguments 2, 3, 5, and 7 are refuted: that's four out of seven arguments.


The glossary definition stands to reason. The reserves are held in foreign assets, to be used to buttress the capital account at times of current account deficits. The Philippines, not being an exporting country, needs much of these reserves and capital account surpluses to service imports, especially of oil, rice, and many basic commodities. These reserves, already in foreign assets, will be used for foreign payments as needed, not domestic projects as creatively designed by our elected politicians. 


If we wish to use the foreign reserves for domestic purposes, the central bank will in effect transfer money from abroad, selling dollars, buying pesos, and spending those pesos in some way. This is not a simple reallocation of money supply -- this is an introduction of new money supply. Without a corresponding increase in productivity, or an increase in production of goods and services, the only way for the economy to respond is through higher prices. Therefore, if the critics want to get their hands on the reserve money, they had better prepare for inflation. 


The fact is that it is the BSP's responsibility to fight inflation, not the critics'. This explains its institutional caution. If critics like Dr. Diokno want the power to spend the money, without the responsibility for its consequences ... well, aren't we glad they are not in the Monetary Board? 


What the BSP is doing is reallocating its portfolio of reserves, from US dollar cash to an interest-bearing IMF contribution. In these times of crises, the 10-year US Treasury yield is 1.69% at last count; how much less is the return for holding US dollar cash? Given such obvious realities, the reallocation is not a stroke of genius -- it is simply a rational action. 


Which is more than what can be said for the critics' paroxysms. 


Argument 1 advocates revenge, but here there is no need for the critics to be concerned, as harsh conditions are already being imposed on Greece, Spain, Italy, Ireland and Portugal -- we can see the public reaction through street riots. 


Argument 4 reminds us of our elementary school days, when the values of sharing and good manners were taught to us by our teachers, parents and classmates. If those United States don't contribute -- should we follow bad example or good? Certainly, we will earn more interest if we follow the good example, which is in turn a good example of enjoying the fruits of righteousness here on earth.


Argument 6 talks about a ratings upgrade. The way The Economizer thinks about it is: if they give it to us, let us accept it. But if we think we can purchase an upgrade for $1 billion, we -- especially the critics -- not really thinking. 


Which brings us to our final point. It is worth remembering the time when Dr. Diokno was in government, as Budget Secretary of President Estrada. It was 1999, and the country was suffering from the Asian financial crisis brought about by heavy foreign borrowing and foreign-exchange mismanagement. The IMF stepped in, imposing the "harsh conditions" on borrowers like the Philippines, who learned the lesson never again to borrow dollars unhedged. 


We cannot help feeling that the slapdash way the article was written, the lack of a clear outline, and the hesitancy of conviction that it displays, point to a personal reason for opposing the IMF loan. The sense is that the IMF last time forced us to do things against our will; we should not reward it now with our hard-earned money. What emerges then, is the image of a child, forced by his mother to play with a kid he didn't like, and now seeing his mother give that kid some of his own lunch money. 


If you find yourself in that position, would you sulk in the corner? Or would you choose to grow up instead?

Judgment and government

As of today, in light of the tragedy visited upon Cagayan de Oro, it is churlish and in bad taste to make a comment or statement about politics. Also as of today, it is rather late for such a comment or statement. Millions of words have been spoken and tons of ink have been spilt over the case of former President Gloria Macapagal Arroyo and about the impeachment case against Chief Justice Renato Corona. It does service to nobody to speak or write or spill some more. 


Be that as it may, in these last few days before the Christmas holidays, I feel that I owe it to myself and to my beloved daughter, Giana, to say something about a matter that has convulsed and captured the imagination of an entire people. In the future, she might ask me, "What did you think about this, Daddy?" And what would I say? That I had forgotten? 


No, I have not forgotten. It is an issue -- for the two cases really spring from the same agitation -- that will shape the way we view and treat politics and government. Is politics a tool to advance the greater good, or is it just another way to play blood sport?


To answer that question, I will cite the Facebook comment I received from Mr. Jun Neri (Emilio Neri, Jr.), who is the chief economist at the Bank of the Philippine Islands and my former seatmate at the Treasury of the said Bank. I had written the following about the issue: 

If Prof. Monsod; Senators, Angara, Arroyo, Enrile, Santiago; commentator Amando Doronila; journalist/broadcaster Rigoberto Tiglao; and Father Bernas are all saying that this lynch-mob mentality is wrong, isn't it time for the mob to take the opposing view seriously? Could these legal and intellectual luminaries really all be wrong and biased at the same time? Could Noynoy Aquino really be smarter than all of them?

Sir Jun (we called him that) made the following comment (the only comment ever made): 

Not to take any sides... I wonder what comments these people will make if the lady in veterans hospital was allowed to leave the country immediately and managed to get away scott free

Being a great fan of Sir Jun's, believing that his analysis of economic news and data are among the most incisive you will get, and liking him personally and never forgetting his singing talent and soothing crooner's voice, I only replied that that would be an interesting development. I did not want to pursue the matter any further and in public. 


But the thought nagged me and continued to nibble at my mind, so to speak. What if GMA did not come back? What if she continued to find excuses to stay away? What if ... ? 


I'd like to think that the purpose of public discussion is to raise the level of debate and to provide deep and lasting insight into the subject. It is not merely to make fun of and cast aspersions at other people. Therefore, from this little question -- what if? -- I'd like to unroll the thread of my thoughts and thereby share it with my family and my future self. 


Because, dear self, I happen to believe that judicial decisions -- or any decision that claims to derive from the "rule of law" -- are not and should not be based on subjective appreciation. 


For that is all it is. Why won't you let her leave, when she does not have a case in court yet? Because I do not think ... I do not feel ... she will return. Not now, when she is sick and cannot walk; not now, when all of her children and grandchildren will be left in the Philippines within a month of Christmas; not now, when she is still a Member of Congress for the 2nd District of Pampanga, constitutionally and very publicly accountable to the people of that District. No, not even then. 


I know this because ... well, because that is how I know her. She does not come back. I even know she has applied for asylum in the Dominican Republic -- but please don't ask me where the place is. 


If this is how our government works -- operating under the guidance of "ah basta!" -- then perhaps the Leftist agitators, eternally noisy under any circumstances, are right to demand anarchy after all. If we can call this state of things "government", what might "chaos" look like? 


The other side will counter that this wholesale destruction of rules and legal procedure is the only way to obtain justice in our country. But if this is the only way -- if we must ravage the rule of law in order to uphold it, if we need to twist our history in order to remain faithful to it, if we should lose our dignity in order to win it -- then please, count me out. Because what becomes of us as a people, without the law, without our history, without your dignity? 


This blog has written earlier, without real thought to its possible significance, that Noynoy Aquino's sense of his place in history will overcome all other considerations -- including the long-term welfare of his countrymen. I think that that nightmare is coming true. He is the son of a martyr and an icon of democracy, and the brother of the personification of the right to free expression. More important than doing actual work, is to be seen to be working to uphold his parents' legacy -- peaceful revolution -- the rule of law be damned. 


Let me return to the question that launched this post. How should we view government -- is it a tool to advance the greater good, or simply another way to play blood sport? I think that we must ask of ourselves a bigger challenge: to make sure our government makes a difference. 


I understand that for those who have never tasted success in school, in sports, in a career, or in a vocation, the temptation is nigh irresistible to just chuck it all to an evil world that does not treat fairly those of limited ability. But faith and common sense tell us that, despite our differing circumstances, we are meant for things greater than those we find around us. 


The government, as we find it, leaves a lot to be desired. Let us work, then, not to make it worse, but to make it better.

Not-happy Holidays

In the pre-dawn darkness of Saturday, 17 December 2011, the residents of Cagayan de Oro City, including my relatives, were disturbed in their sleep by the raging torrents borne by Typhoon Sendong. They awoke to find the water rushing towards their doorsteps, forcing them to swim outside and cling to tree branches and then, when the water became high enough, stand on their rooftops. There was no time to look back, no time to think, no time to save. 


My aunt's family lost everything -- their belongings, and the memories that they used to trigger. It was doubly tragic, because they had based their livelihood in their house -- the grocery store built by my uncle's retirement proceeds, the passenger van, the multicab used to deliver the grocery, the family car. All are gone, washed away literally in the darkness. 


It is triply tragic, that this happened one week before Christmas. The time to celebrate has been eclipsed by a time to commiserate -- the time to rejoice has been pierced by a time to cry -- the time to give gifts has been sundered by a time to make donations.


I am making this short post only to remind myself, from time to time, to offer a little prayer, that all those who lost a lot of things, may not lose their life. It is normal for human beings like us to attribute more value to the things that we lose than those that we saved. In times of such calamity, it is easier to grieve for the lost car, the lost house, than to rejoice in the saved lives of our children and spouses and cousins and aunts. It is easier to take solace in the past that, having floated away in the deluge, can never be retrieved; than to joyfully await the coming of a future that, given what has happened, can only be better than this. 


That is why my prayer is not that they may not lose their mortal, passing, earthly lives. It is that they may not lose their life -- the kind of life that put hope in a better future, that ascribed faith to a tireless and loving Providence, that thought of things bigger than those we can see and hear and touch and feel -- a life that flowed from the indomitable, unquenchable spirit of human renewal. 

It is from the best in us that flows the worst in us

I spoke these words last night, during our get-together session with high school friends. I wanted to write it down just so I wouldn't forget, but always remember.


The bad things usually are the flip side of the good things. This is obvious, but until you think about it, it wouldn't occur to you. Marco was asking Clarence about his (Marco's) habit of drinking Coke. Last night, he ordered Coke zero -- not just one, not two, but four cans. He said this is his only vice: drinking two bottles of 2-litre Coke zero per day, every day. Clarence (M.D., UP School of Medicine; 3rd-year resident, general surgery, PGH) said, yea, it's okay, nothing will happen to you.


But later I asked him, is it really okay to drink that much Coke zero every day. He replied, in those quantities, there will be effects. Maybe not now, but someday, those will come, we just don't know what exactly.


I said, it's always in your "hilig", it is always where you dedicate your life, where it meets the end. For instance, if you like driving, chances are you will die of a road accident. If you like drinking Coke, chances are your future diseases can be traced to drinking Coke.


But I my teacher in moral philosophy, Dr. Ramon C. Reyes, already mentioned this in class a long time ago. I want to talk about a related concept that I was able to articulate last night in the course of the conversation.


Everybody was thinking aloud their thoughts about the reason why the Philippines is so very poor and lags the rest of its neighbors in terms of economic development. They said several things, but I have mostly forgotten about them, mostly because I was concentrating on my own reason.


I said that this is the flip side of the what is the best in Filipinos. Alone among the peoples of the world, Filipinos insist on taking care of their families, wherever they are, and however distant the relationship. They take care of grand-nephews, of 3rd cousins or 4th cousins related only by marriage or clan or barangay, and think about their family constantly. In short, if you are a Filipino and you have relatives of whatever degree of consanguinity or affinity, you will never be short of help.


I said, the flip side of this is that people do not think of anybody else when making a decision. Will it affect my family? If yes, then I will do it, if not, then I will not. But as to the rest of the community? No matter.


This is the price we have to pay for being loving to our families. There is no thought to the collective good of the larger community, only the self-interest of those related by blood or marriage.


Like the Resurrection, which was made possible only by the Passion and Death, our loving concern for our families is made possible only by our malign neglect of everyone else.


It is from the best in us that flows the worst in us.