25 July 2007

Our Delusion of Being Rich

Thanks to The Information Soldier, Aníbal Freytes, who sent me this link to a 2006 Reason article that We both felt had implications for Puerto Rico.

Of the entire fascinating article, two snippets caught My attention. The first:

Red tape discourages new businesses... Poor countries have the worst examples of such regulations, and that is one of the major reasons they are poor. Officials in rich countries perform these basic bureaucratic tasks relatively quickly and cheaply, whereas officials in poor countries draw out the process in hopes of pocketing some extra cash themselves.

Argue if you will, but Puerto Rico is a poor country. Not only poor in comparison to the Big Money Swamp up north, but also poor in relation to what it should be achieving. We have a hollowed-out economy, brain drain, corruption and an outhouse-level education covered up by a welfare system that sucks the productivity out of Us while simultaneously diverting attention from the crumbling chaos We stupidly keep tolerating.

Because We continue to think of Ourselves as a "rich" country, We continue to miss the mark in terms of finding solutions to Our problems. (Too many idiots trying to run the circus also makes a difference.) We sustain Our delusion that We are "rich" by comparing Ourselves with countries far less propped up than We are, the equivalent of riding a bike against runners. The problem here is that We should be driving Our car, not riding a borrowed bike.

A second snippet says:

Since technology is widely available and increasingly cheap, this is what economists should expect of every developing country. In a world of diminishing returns, the poorest countries gain the most from new technology, infrastructure, and education. South Korea, for example, acquired technology by encouraging foreign companies to invest or by paying licensing fees. In addition to the fees, the investing companies sent profits back home. But the gains to Korean workers and investors, in the form of economic growth, were 50 times greater than the fees and profits that left the country.

This is not a secret. Even The Fools here have a vague grasp of this concept as a formula for economic growth. But as usual, they don't understand technology (most of them can't even spell it...and that's no joke), see infrastructure projects as personal cash machines and let's not even get started on the criminal malfeasance that is Our "educational system." While The Fools fiddled in their hallucinations of trying to be personally rich amidst Our equally-illusory dream state, formerly-poor countries became rich, or at least made major progress in changing their fortunes from "limited" to "prosperous."

The difference is obvious: Those prosperous countries discarded delusions and centered themselves on reality. And that reality revolves around laws, investments, education and planning. Laws that streamline progress, rather than impede it. Fostering investments for long-term global growth. Education to make Us global players rather than sullen benchwarmers. And planning that knows the difference between dreams and delusions--and can make the dreams a graspable reality.

The Jenius Has Spoken.

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