Friday, November 25, 2022

Inequality 41, WB's report on poverty and inequality in the PH

The WB discussed their recent report, "Overcoming poverty and inequality in the Philippines."

My quick reaction -- Overcome poverty, Yes. We should have less poor people, more rich people.
And No, we should not overcome inequality. We should respect more inequality.

The WB, UN, and all other multilaterals are stoking envy. The PH with about 113 M people, if there are 50 owners of Ferrari, the politics of inequality say these 50 families should be demonized. No. We should have 200, 500 families who shd own Ferrari. We shd have more wealthy people, not less.

Once you successfully stoke envy in the hearts and minds of many people, it is very easy to impose more taxes, high taxes. Being wealthy is evil so they should be over-taxed. We should encourage our people to be rich. Have big houses, more cars.

See this from the Table of Contents.

The huge public debt, huge borrowings -- from the WB, ADB, private banks, bond and security holders -- are not a problem for the WB. In 2021, the PH government paid P429 B interest payment alone, principal not included yet. This 2022 Sept, we already paid P400 B interest alone. Could reach P530 B by end-December.

And from its recommended policies:

"Promote uptake of booster vaccination...
"Support schools in assessing student learning....
"Strengthen social protection programs and provide well-targeted assistance...
"Develop a fiscally viable unemployment insurance program..."

There. More spend spend spend. 

I checked if WB bothered to say something like "Shrink or abolish old welfare programs as new ones are introduced" -- nada. zero. All new subsidies and spending are on top of existing ones.

Then another recommendation by the WB:

"Investment should also make softening the impacts of climate change a priority. To ensure that agriculture is sustainable and resilient..." 

CC literture is about decarbonization, fight or phase out fossil fuels. But modern agriculture, high productivity agriculture always involves the use of machines, huge tractors, harvesters, trucks, irrigation pumps. All of them use fossil fuels.

So-called "Sustainable, low environmental impact" farming is done via carabao and cows tilling. One hectare will take about 2 weeks of 7-days/week continued plowing by a carabao, the farmer's feet are dilapidated by sharp grasses, the wound can lead to infection.

"Non-sustainable, fossil fuel guzzling" farming via modern tractors, one hectare will take only 2 hours. Plow in the morning, start planting in the afternoon. Farmers feet safe from wound and infection, thanks to machines and fossil fuels.

But WB, UN, etc will be unhappy when you thank fossil fuels. While they jetset from Washington DC and NYC to anywhere around the world. On fossil fuels.

If you "overcome poverty", doesn't this imply "less inequality"?

No. If your main concern is overcome poverty, allow more inequality. Consider this example.

1. Average income of top 1% of households (HHs) is P1M/month, ave income of the poorest 10% of HHs is P5k/month. The former has 200x more income than the latter.

2. As economy expands, the ave income of top 1% is P50M/month, ave income of poorest 10% is P25k. The former now has 2,000x more income than the latter. Inequality has worsened. Is this bad?

No. In (1), the poorest can only ride bicycles and carabaos.  In (2), the poorest now ride motorcycles or e-bikes, even a 3rd-hand car.

The goal is to overcome poverty. If more inequality will produce this, so be it.

SG is doing good. They created enclaves for the super super rich, billionaires from Europe and US are attracted there. Give them lots of electricity, SG is running about 99% on fossil fuels, mainly natgas. When billionaires go to your country, they build huuuuge houses, have many cars. This creates huuuuge jobs, from construction workers to plumbers, electricians, mechanics, etc.

See also:
Inequality 38, Forbes' billionaires 2019, March 06, 2019 
Inequality 39, Capitalism and its detractors, October 03, 2019
Inequality 40, Real minimum wage is zero, May 15, 2021.

No comments: