JAMONOMICS

If anyone has ever looked into the effects of a recession they would realize that some things remain the same. The rich stay Rich, and the poor get poorer. You think that the severity of the recession and whether or not it becomes a depression would have an effect on this pattern. But it doesn’t. All that happens is the more severe the recession, the greater inequality that develops and the smaller the amount of high elites that benefit from the disaster that unfolds.

The Great Depression
This was probably the worst economic disaster ever recorded. But what happened in the interim. We would see that the big banks in the United States bought out all the smaller banks. They consolidated market shear and in the end increased their own stability and wealth.

Russia after the fall of the Soviet Union also experienced one of the worst depressions recorded. Their GDP fell by about 50 percent between 1990 and 1995. So what do we know about Russia now. They have one of the most powerful oligarchies in the world

“Known as oligarchs, these businessmen wield a great deal of influence over Russia's political and economic life.

They bought most of Russia's national resources at bargain basement prices, often in return for favours to key politicians.” BBC 2000

This group rose to power during the turbulent 90’s after massive deregulation and privatization was said to be the cure to Russia’s economy. State assets were sold at rock bottom prices and the most powerful businessmen who were usually the members of the old soviet power structure purchased everything.

Today
Well this probably won’t be the same story today since we are no longer blaming communist policies or market irregularities like too much regulation for the ills in the worlds economy. Instead we are blaming a lack of regulation and free market principles as the root cause of the problem. The solution today is not less regulation but more.

President Barrack Obama has signed into law the largest stimulus package ever by the US government and the government has continued to purchase banks in order to build trust in the financial sector and maintain some amount of stability.

This recession will have exactly the opposite effect than what every other recession has had because there is a paradigm shift. State intervention is seen as the solution to economic ills. The United States will see a middle-class benefiting while a upper-class become practically stagnant in growth after an 8 year reign.

Jamaica
Our economy has always behaved differently because the market does not operate efficiently at all in Jamaica. However I believe that those who will profit from Jamaican turbulence don’t even live in Jamaica. They live among other places in China and Spain. A state visit from his majesty in February as well as the Chinese Vice President cannot be dismissed as just courtesy visits. The queen said she always wanted to come to Jamaica, but why now? Probably it has something to do with the massive investment Her country has made in our tourism industry building all of the biggest hotels we have now. I have already explained the relationship between China’s ‘altruism’ and their national interest.

The sale of some of Air Jamaica's most lucrative routs to Virgin Atlantic for less than 5 percent of its actual worth may have been signs of faulty neoliberal policies spreading wings in Jamaican political economic thought. but if you dismissed it as policies of a previous administration, get this - The new administration wants to sell the entire air line! lets just wait and see how much it goes for.

What we may see in this time is other governments and other middle classes benefiting from Jamaica’s strategic position and resources rather than our own. If we are not careful, we may not benefit at all.