National
“Political Economy as a branch of science is extremely modern. Still, the subject with which its inquiries are conversant has in all ages necessarily constituted one of the chief practical interests of mankind.” – John Stuart Mill.
- S. Mill was an English philosopher, political economist, and a civil servant. One of the most influential thinkers in the history of classical liberalism, he contributed widely to social theory, political theory, and political economy
“The first lesson of economics is scarcity: There is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” – Thomas Sowell, economist.
Closely Linked
As shown by the famous quotations cited above, politics and economics are closely linked.
It is not possible to properly understand political processes without exploring the economic context in which politics operates.
At least, In theory, many view economics as non-political.
An economist should not act like a politician and must not pay attention to biased information.
In this view, it is up to elected politicians to weigh the recommendations of economists and decide.
Critical Election Issue
In reality, there is a strong relationship between economics and politics.
Voters always look at the performance of the economy as one of the critical issues in an election.
Many economic issues are inherently political because they lend themselves to different opinions that the administration and the opposing parties can take up.
But there is a problem here.
Economists can vary in their interpretation of facts and the consequent proposals to address issues.
Political Instability
If economics can contribute to reducing unemployment, then it can make a significant improvement to economic welfare.
In the history of the world, the mass unemployment of the great depression of the 1930s led to political instability.
However, economists often disagree on the best solutions to economic problems.
A classic example occurred at the start of the great depression cited earlier.
Jobs And Money
Leading economists suggested that the government budget should be balanced by imposing higher taxes and lowering unemployment benefits.
This approach only added to the problem and made the recession deeper.
On the contrary, John Maynard Keynes developed his general theory of Employment, Income, and Money.
Keynes argued that the economy needed expanded fiscal policy characterized by higher borrowing and government spending.
Recovery in Q4
Here comes the application to our national setting.
We will have a Presidential election next year.
Undoubtedly the performance of the economy will be a crucial issue. Things are not looking well at the moment for the administration. But there is ample time to initiate bold moves that can speed up the economic recovery effort and results.
According to Moody’s Analytics, a company that provides economic research regarding risk, performance, financial modeling and consulting, training, and software services, the Philippines is likely to be the last country in Asia-Pacific to recover fully from the pandemic-induced recession.
This company projects that the Philippine economy will recover only in the fourth quarter of 2022.
It further said that the Philippines would struggle due to its deep recession and uncertain fiscal support of policymakers.
Among Worst Performers
The Philippine economy will begin to recover with a GDP growth of 4.5 percent this year and 6.2 percent in 2022 after contracting by about 9.9 percent in 2020.
Along the same analysis line, The World Bank retained its 8.1 percent economic decline projection for the Philippines in 2020, placing the country among the worst performers in the East Asia and Pacific region.
Coming from a low base last year, the World Bank expects the Philippine Economy to grow by 5.9 percent this year and six percent in 2022.
Why It Didn’t Happen
Even in a recession and those not-so-optimistic statistics made by foreigners, there is always room to have fun.
Enjoy the following quotes:
“Too bad that all the people who really know how to run the country are
busy driving taxi cabs and cutting hair.” – George Burns, American comedian,
actor, singer, and writer.
” Politics is the ability to foretell what is going to happen tomorrow, next week, next month and next year. And to have the ability afterwards to explain why it didn’t happen.”— Winston Churchill, 1874-1965, British Prime Minister, Nobel Prize 1953